ENCINITAS — A lawsuit between Encinitas and a developer that was previously settled has reignited, as the developer has claimed the city violated the settlement terms when voters failed to pass Measure T.
David C. Meyer of DCM properties issued the notice of breach on Dec. 14, a day after the city certified the results of the November election, in which voters defeated the city’s proposed housing element update by a 56-44 margin.
Meyer’s notice states that the city’s failure to adopt the housing element update violated a section of the settlement — which stems from Meyer’s legal challenge of a different settlement between the city and Building Industry Association — that required the city to adopt a housing element no later than the date the city declared the election results official.
The notice gives the city 15 days to resolve the alleged breach or Meyer will seek relief in court, including filing a notice to enforce the judgment, which would impose Measure T on the city.
City officials declined to comment on the lawsuit threat, citing confidentiality laws.
This is likely just the beginning of what might be a protracted legal battle over the city’s failed housing element attempt, as several other entities have threatened to sue the city for its failure to pass a housing element, and opponents of the housing element have threatened to file their own lawsuits if the city forced the passage of Measure T after voters rejected it.
State law requires cities to adopt housing elements, which map out where and how cities will accommodate housing for low-income residents by zoning for higher-density housing products. Encinitas hasn’t passed a housing element update since the early 1990s.
The city’s current legal problems involving Measure T stem from a series of lawsuits dealing with the council’s decisions involving so-called density bonus developments. 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.
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 density bonus project developers.
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.
Meyer challenged that settlement, arguing that it was illegal because the state law required cities to round up to determine base density. But he also sued the city for its lack of an updated housing element, which they city hasn’t completed in over 20 years.
Ultimately, the city settled Meyer’s lawsuit when it reversed course on rounding down, and also agreed to place Measure T on the Nov. 8 ballot.
Opponents of the city’s housing element have implored the city to accept the results of the electorate and design a housing plan that is less dense and requires shorter buildings. The City Council last week voted to host a public workshop in January on the topic.
The opponents have also argued that the settlement agreement is unenforceable for a couple of reasons. First, it would violate the 2013 voter-approved Prop. A, which requires that voters decide complex land-use decisions such as the housing element. Secondly, opponents said, the settlement cedes the city’s land-use authority to a private entity — DCM Properties — which is illegal.
Bruce Ehlers, chairman of the “No on T” committee, is also a member of the Encinitas Residents Alliance, which also is suing the city over the BIA settlement, which allowed for six projects already in the planning pipeline to be completed under the pre-2014 standards.
In that lawsuit, the Alliance argues that the city illegally turned over its discretionary authority to the BIA by agreeing to a settlement that predetermined the outcome of the six projects.
Similarly, Ehlers said, the city’s settlement with Meyers predetermined that the housing element would be on the 2016 ballot and that it had to pass in order to avoid further litigation. Ehlers said that this type of agreement is illegal.
“By defining the outcome, by declaring that it had to be on the ballot, the discretionary decision of the council was predetermined by what they said in the settlement,” Ehlers said, paraphrasing what he was told by the Alliance’s legal counsel. “By agreeing to the settlement, the city was also saying that the outcome of the election was also predetermined, and our lawyers don’t see how this stands up in court.”
But housing advocates have argued that it is the city’s enforcement of Prop. A that is illegal, because it puts housing element decisions in the hands of an electorate that is predisposed to reject them. In short, they argue, residents are using Prop. A to illegally preempt state housing law.
Environmental attorney Marco Gonzalez, who also threatened to sue the city if they certified the results, made this argument to the City Council the day after the election. Gonzalez told The Coast News that he believed that a court would ultimately determine the outcome of the housing element and by extension Prop. A.