May 26, 2023

Update on “Builder’s Remedy” projects

Thank you to all who wrote the City Council to express concern over the pending "settlement" with the developer of the notorious Builder's Remedy projects. Precipitously, the Council approved the “settlement” at its May 9th meeting.

We put the term “settlement” in quotes because, by our reading, it's not a settlement, in that we don't know with certainty what both sides are getting. We only truly know what the developer won: relief from several unrelated City lawsuits.

As to what the City receives, the "settlement" reads like an ongoing negotiation with the developer in which, if all goes as the City hopes, the Builder’s Remedy projects eventually will be withdrawn. But only IF the developer agrees down the road to the standards it must abide by for each development.

One glaring issue left unresolved: how dense and how high these projects will be. The City claims it can't do those calculations under its revised density bonus zoning code until the developer files applications for each of its projects. That means our planning staff believes it can't determine what is allowed under our current code until the developer and its architect calculate it. Once they receive the developer's calculations, the planning staff will then review those numbers to see whether it thinks the standards have been applied correctly.

We're also disappointed that the City didn't require more affordable housing units before agreeing to a deal. Instead, it REDUCED the affordable units for all these projects from 20% to 15%. This is a windfall for the developer. It also hurts the City because, if built, these projects alone likely will exceed the ENTIRE state requirement for market-rate housing in our current housing cycle without taking into account all the other mainly market-rate housing already in the pipeline (such as the mega "Gelson's" project at Lincoln and Ocean Park). So we're actually moving further away from our targeted affordable housing goals by letting the most prolific developer in the City's history do less than its fair share.

Here's the Agreement so you can read it for yourselves.

The reality is that despite a strong record and relevant state law in the City's favor, our City Attorney simply did not have the appetite to stand up to a developer's potential lawsuit. Even with outside legal counsel identifying powerful grounds to challenge Builder’s Remedy projects, and despite other cities taking on this fight, our City Attorney did not want to.

That decision took away any leverage the City Council may have had to get a better deal. By eliminating its legal recourse, Council had no choice but to accept a vague, undefined deal and hope for the best.

We will continue to monitor this agreement, project by project, because it’s not over. The only winner here is the developer.