ENCINITAS — Just as Encinitas appeared to be reaching a settlement on a lawsuit that challenged a settlement agreement between the city and the Building Industry Association, another group has sued the city over the same agreement.
This time, a citizens group that calls themselves the Encinitas Resident Alliance filed a lawsuit challenging the 2015 settlement, which it says unconstitutionally tied the city’s hands as it pertains to six density bonus projects, including one the City Council recently approved in Leucadia.
“The BIA settlement is binding the discretionary power of the City Council, and on its face is illegal,” said Bruce Ehlers, a former planning commissioner and a board member of North County Advocates, another citizens group that supports the current lawsuit.
The city and BIA reached a settlement in 2015 stemming from a lawsuit that challenged the city’s actions in July 2014, when the council approved several policies aimed at closing several loopholes that have been popular among developers of so-called “density bonus” projects.
State law allows for developers to build extra, or “bonus” homes on land if one or more of the homes are earmarked for low-income residents.
Developers have built a proportionally large amount of density bonus projects in Encinitas, which has caused a number of residents to complain that the city was too lax with its approval of projects, which they said altered the character of the community with oversized and super-dense units.
One thing the council did not give up as part of the settlement was the requirement that a project’s base density — which is used to calculate the density bonus — should be rounded down in the number of base housing units.
But the city also agreed to not apply the settlement to six projects that were already in the planning pipeline, including Hymettus Estates, a nine-unit project in Leucadia that several residents opposed.
That arrangement, Ehlers said, was against the law.
“This illegal agreement binds the City in their decision making and gives unique, preferential treatment to six density bonus projects including Hymettus Estates,” Ehlers said. “It changes how they calculate the number of units permitted and the net result is almost double the number of housing units allowed by our local
City officials faced another lawsuit stemming from the 2015 settlement, but from the other side of the aisle. Density-bonus developer David Meyer in his lawsuit argued the city had no right to round down when state law states that base density should be determined by rounding up fractional units.
Facing a new state law that would cement “rounding up” as the state requirement, the city announced Tuesday that it settled the Meyer lawsuit.
Meyer said the settlement was the right decision.
“The settlement agreement importantly should bring the City’s density bonus ordinance into compliance with State law and allow the City to proceed unimpeded to hold an election on its updated housing element while reserving the right to seek judicial sanctions should the updated housing element not be approved by the voters in November,” he said.
As part of its settlement, the city will require appliants to provide information that will show that any incentive or concession will reduce the cost of a housing development.
Meyer, as part of the settlement, agreed to drop his pursuit of invalidating Encinitas’ Proposition A, passed in 2013, which he was prepared to argue was legally invalid.
The settlement, however, does require, as did the previous settlement arrangement, that the city place a housing element on the November ballot.
Ehlers said that this arrangement of the settlement further handcuffs the city by forcing it to keep a timeline, which he said the group believes resulted in a hastened timeline and a flawed ballot measure that they can’t support.
Ehlers said that the city dismissed suggestions that would have made the proposed element more amenable to the public because consideration of the suggestions would have taken the city off its timeline.
The suggestion, made by Planning Commission Chairman Glenn O’Grady was to require 25 percent of the housing developed under the housing element, to be earmarked toward affordable housing. The city planning staff dismissed the suggestion, which they said the state department of Housing and Community Development informed them they would not approve.
“That has become (staff’s) regular excuse,” Ehlers said of the HCD explanation. “But no discussion was ever had about what number HCD could approve, and that’s the problem.
“The BIA threat is leading to bad and rushed decisions,” Ehlers said. “Hymettus and the housing element were two separate concepts, yet they have connected them by virtue of this lawsuit and have tied their hands.”
City officials could not comment on the details of the lawsuit, but said the recent housing issues have put the city in an untenable position.
“We are definitely caught between a rock and a hard place,” Councilwoman Catherine Blakespear said.
Blakespear, however, disagreed with the idea that the city is rushing the proposed housing element to the ballot.
“There is no part of this that is rushed,” Blakespear said. “This has been the slowest moving train ever. It has been more than five years in the making and the city has spent at least $3 million.
“Someone coming forward with a plan in the 11th hour that the state will not approve isn’t a solution,” she said. “They’ve had ample time to make those suggestions.”
Blakespear said the city has not discussed the citizens group’s lawsuit but will likely discuss it at its next council meeting.