SAN FRANCISCO (September 11, 2020) – Holland & Knight has won a landmark housing law victory, becoming the first to secure the approval of an affordable housing development through litigation under a landmark new housing law. The new law, Senate Bill (SB) 35, encourages housing by fast-tracking the permitting process for projects that meet qualifying requirements, such as providing affordable housing, paying prevailing wages and complying with a city's objective zoning standards.
After Holland & Knight became the first law firm in the state to use the cutting-edge new housing law to win a trial court judgment ordering the approval of a development project, the City of Los Altos appealed the trial court order, threatening to delay the housing project by two years or more. But Holland & Knight successfully moved the court to require the city to post a significant bond if they wished to pursue the appeal. In response, the city has announced it will drop the appeal and comply with the trial court order. This marks the end of the litigation battle and allows the 40 Main Street Project – the first in the state to use litigation under SB 35 to achieve project approval – to finally move forward.
Holland & Knight Attorneys Daniel Golub and Genna Yarkin represented property owners 40 Main Street Offices LLC in suing the City of Los Altos for denying a development that included affordable housing in violation of SB 35. This victory marked the first order by any California court granting a writ of mandate against a city for denying an SB 35 application. Judge Helen Williams of Santa Clara County Superior Court ruled on April 24 against the city, agreeing with the team's legal arguments and finding the city had violated SB 35, the Density Bonus Law and the Housing Accountability Act. The court also held that the City of Los Altos acted in bad faith in rejecting the project and ordered the city to immediately issue permits to build the project. The city filed an appeal on July 7 and failed to comply with the Superior Court's writ of mandate. Under normal circumstances, this would allow the city to delay the project for two years or more while the appeal was pending. However, Mr. Golub successfully moved to block the city from taking this action without posting a bond required under the Housing Accountability Act to compensate the developer for the extraordinary costs that would be imposed on the developer by failing to comply with the court's order pending appeal. On September 2, Judge Williams ordered the city to post a $7 million appeal bond, and three days later the Los Altos City Council announced they would drop the appeal instead. On the evening of September 10, the Council voted to comply with the court's order and to issue the applicant the permit.
The property owners have tried for more than five years to develop the downtown site without success. The Holland & Knight team prepared an application to seek ministerial approval for a 29,566-square-foot, 66-foot-tall mixed-use project that will include first-floor office space and a mix of affordable and market-rate housing above. The team also invoked the State Density Bonus Law to seek increased building height in exchange for providing below-market affordable units. Although the project qualified for ministerial approval, the city rejected the application, making litigation necessary. Housing advocacy groups California Renters Legal Advocacy and Education Fund and the San Francisco Bay Area Renters Federation also brought suit to challenge the city's failure, and their suit was consolidated into Holland & Knight case.
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