Court Rules Against Beverly Hills in Housing Element Case

A Los Angeles County Superior Court judge ruled this week that Beverly Hills has failed in its legal responsibility to meet the state’s ambitious housing goals. The ruling comes in a lawsuit filed by Californians for Homeownership (CFH), a nonprofit organization sponsored by the California Association of Realtors. CFH has filed over 20 housing element lawsuits in the past few years against cities and counties. Ten of those cases have  been settled, typically with agreements for specific timelines to revise or comply with housing element requirements and to comply with the so-called “builder’s remedy” in the interim.

In granting the petition for writ of mandate filed by CFH in Californians for Homeownership v. City of Beverly Hills, the court found that Beverly Hills had not complied with its legal duty to plan for housing under the regional housing needs allocation (RHNA) and housing element system.

“This is a milestone decision in state housing law,” said California Association of Realtors President Jennifer Branchini in a statement. “For far too long, cities and counties have used unrealistic and under- developed housing plans to skirt around state planning rules. This case proves that the Legislature’s recent improvements to housing element law go a long way toward solving this problem, so long as these new laws are vigorously enforced.”

Beverly Hills, like all other cities in California, is required to submit a housing element plan to the California Department of Housing & Community Development (HCD) outlining how it will create capacity for a state mandated number of new housing units by 2029.

The City Council adopted Beverly Hills’ housing element in October 2021, outlining the city’s ability to create capacity for 3,109 new units, including approximately 1,700 affordable units, per the state’s demands. HCD declined to certify both the city’s initial housing element and a second version adopted by council in February 2023, ordering both times that revisions be made to the plan including more details on suitable sites for housing development.

One of the key criticisms that the CFH’s writ petition levied against the city’s current housing element is its reliance on directing new housing development into commercial corridors and overestimating how many units can be built there. The nonprofit alleged that this is an unrealistic strategy for generating enough housing units to meet the city’s RNHA numbers.

“These are exactly the sorts of maneuvers that the recent changes to housing element law were designed to address,” said CFH attorney Matthew Gelfand. “When cities include inappropriate sites and overcount the potential housing on those sites, it undermines the RHNA system and is deeply unfair to those cities that have put in the work and developed realistic housing plans.”

In a statement to the Courier in response to the writ, City Attorney Laurence Wiener said that the city intends to appeal the decision and is already working closely with the state to meet its housing requirements.

“The city has established a mixed-use zone in order to direct new development away from multi-family areas to preserve rent-stabilized units and avoid displacing tenants,” Wiener added.

CFH noted that it expects a final judgment in its lawsuit will require the city to revise its housing element on an expedited basis. Additionally, it believes that this week’s ruling will “provide needed clarity about the applicability of the builder’s remedy provisions to housing developments in the city.”

As the Courier has previously reported, builder’s remedy provisions in state law enable developers to sidestep local zoning regulations as long as the local jurisdiction is out of compliance with its housing element obligations. The provisions apply to proposed projects containing at least 20% affordable units.

This builder’s remedy issue is quickly becoming a prominent one in Beverly Hills. Developer Leo Pustilnikov has proposed several builder’s remedy projects in the city, including a proposed nineteen-story residential and hotel complex on South Linden Drive. Pustilnikov and his lawyer Dave Rand have previously expressed the view that because the city’s housing element has not received HCD certification, the city must accept builder’s remedy project applications.

“The city’s position that the builder’s remedy somehow doesn’t apply to Beverly Hills or somehow doesn’t allow us to obtain relief from zoning restrictions is not supported by the state law,” said Rand.

Rand said that his preference is to work collaboratively with the city to shape a project that is suitable to both parties, a tactic he has successfully used in other similarly situated jurisdictions.

In an interview at press time, Rand made the additional point that the city is an outlier compared to other neighboring affluent locations. Of the six member jurisdictions in the Westside Cities Council of Governments (WSCCOG), five have received certification for their housing element. Those five are Santa Monica, Culver City, West Hollywood, the city of Los Angeles (Districts 5 and 11) and the County of Los Angeles (Districts 2, 3 and 4).

The only WSCCOG member not in that category is Beverly Hills. Referring to this week’s writ as a “game changer,” Rand noted, “Going back for over a year now, housing advocates and the state have all been saying that Beverly Hills lacks a compliant city housing element. Applicants have been saying it and now a court of law has agreed. I believe the city was probably hoping that they would find a sympathetic ear in the form of a Superior Court judge, but that has not proven to be the case. The court could not have been clearer that the city’s housing element fails on multiple levels, paving the way for builder’s remedy projects to proceed.”