Imagine yourself in a year or two walking down one of your neighborhood streets with a friend and looking up to see a new 25 story building looming over you. You ask your friend: “What on earth is that?” How was that built in Beverly Hills?”

Your friend gives you a two word answer: “Builder’s Remedy.”

The friend continued: “This all happened because we weren’t paying attention when something might have been done!”

This scenario is more realistic than you might think. And if you want to see what it could look like you need to do no more than drive on Lindbrook Drive in Westwood from Hilgard to Beverly Glen. Wall to wall high rises loom over beautiful elegant single family residences.

I confess that this is a bit of a wonky policy column. Some say that I should concentrate more on less serious subjects such as the one about my journey from Malibu to Beverly Hills and not so much on “policy issues.” My view is that a bit of both is good and that the Builder’s Remedy subject is one that you should know about. Let me know what you think. You can reach me at petero@ostroff.la.

So let’s look at three Builder’s Remedy questions:

What is happening?

Why?

and

What can we do about it?

What is happening?

Applications have been filed for more than twenty so-called “Builder’s Remedy” projects (explained below) that exceed by a large margin our City’s height and other restrictions.

Here they are:

Current Builder’s Remedy Project Applications (As of 6/6/24)

Address Height # of Units

201 S. Arnaz 8 Story 35 Units

353 S. Beverly 8 Story 140 Units (north side of Pavilions)

8844 Burton Way 20 Story 200 Units (former Temple Emanuel school)

140 S. Camden 15 Story 26 Units (Currently 2-story duplex)

211-17 S. Hamilton 14 Story 210 Units (Currently single family homes)

214-16 S. Hamilton 8 Story 90 Units (Currently single family homes)

125-9 S. Linden 19 Story 165 Units; 73 hotel rooms

346 N. Maple 12 Story 65 Units (N. Side of BH Tennis Club)

401 N. Oakhurst 11 Story 25 Units

8222-6 Olympic 9 Story 30 Units (South of Frank Fenton Park)

9430 Olympic 10 Story 45 Units

9441 Olympic 10 Story 63 Units

9467 Olympic 8 Story 110 Units (Pavilions market site)

145 S. Rodeo 15 Story 30 Units (replaces 2-story building)

232 S. Tower Dr. 8 Story 55 Units

***

Why is this Happening?

This is where the term “Builder’s Remedy” comes in. This is a colloquial term that is not found in California law but derives, in very shorthand fashion, from the extensive California Housing Accountability Act (HAA) specified. California Government Code Section 65589.5.

In essence, developers and housing advocates contend that this means that a housing project that includes 20% of its units affordable to very low or low income residents or 100% affordable to moderate income residents can be built in a city ignoring height, density or zoning restrictions so long as the developer has filed a preliminary application describing the project at a time when the city did not have General Plan Housing Element that had been certified as compliant with state law.

Affordability is based on a percentage of the median household income for all residents of Los Angeles County and assumes that no one should pay more than 30% of income for housing. As a practical matter, these limitations mean that “affordable” rent can be no more than one third to one half of “market” rent in Beverly Hills. And few, if any, City employees, police or firefighters would qualify because their incomes are too high to be considered “low income” or even “moderate income.”

So, developers contend that from 2021 until May 1, 2024 when the state certified the City’s Revised Housing Element, the City did not have a compliant Housing Element. Therefore, applications for projects submitted before May must be approved/ cannot be denied even if they ignored City’s restrictions on height, zoning, etc.

In theory, taken to an extreme, this would mean that a Housing Developer could acquire a few contiguous lots in the “700 Block” in the flats and propose a 100 story builder’s remedy project (so long as 20% of the units were “affordable” to low income persons). Hello, Sierra Towers!

Preliminary applications for all of the projects listed above were submitted during the window from 2021 until May 1, 2024. Assuming that formal entitlement applications are submitted within 180 days of the Preliminary Application, developers contend that their rights are vested in that their projects are subject only to the “ordinances, policies and standards adopted in effect” and that includes the fact that there is no legally compliant Housing Element and the Builder’s Remedy is available even if the Housing Element subsequently becomes certified.

There are numerous sections of the HAA that would appear to support this contention.

For example, the HAA provides:

“The Legislature’s intent in enacting this section is … to significantly increase the approval and construction of new housing for all economic segments of California’s communities by meaningfully and effectively curbing the capability of local governments to deny, reduce the density for, or render infeasible housing development projects and emergency shelters. That intent has not been fulfilled.” (My emphasis)

In short, the legislature’s expressed intent was to get local governments out of the way of housing development.

Further, while the HAA allows cities to deny projects if they identify specific adverse impacts on public health and safety, this latitude is ostensibly curtailed by the following:

“It is the policy of the state that this section be interpreted and implemented in a manner to afford the fullest possible weight to the interest of, and the approval and provision of, housing.” (Again, my emphasis)

It is reasonable to ask why it took the City over two years to adopt a certified Housing Element which left open a window of many months for developers to apply for approvals of projects that did not meet our zoning requirements. In short, there are several reasons and no heroes (except for the excellent planning staff members including Masa Alkire, Chloe Chen, Cindy Gordon and others who were tasked with obtaining and spent thousands of hours in unchartered territory to obtain certification).

But there is no virtue in crying over “spilt milk.”

Further, there are people who believe that the State of California wants to punish and make an example of Beverly Hills as an enclave for the wealthy or for other reasons. I have no reason to believe that this is true. The City of Palo Alto is also an affluent community and has yet to have its Revised Housing Element certified by the state despite several tries. Thus, Builder’s Remedy is ostensibly available in Palo Alto. Accordingly, there are numerous large Builder’s Remedy projects that have been submitted to the Palo Alto planning department including two seven-story projects proposing 380 apartments and 335 apartments respectively and another which proposes 189 residences and 137 hotel rooms. All involve substantially more units than any proposed for the City.

The rules are not “rigged” against us as far as I can tell.

***

What Can the City Do Now to Avoid the Scenario Described Above?

There are both political and legal strategies that may be productively employed.

Politically, it is important for our residents to study carefully projects in their neighborhoods (all plans are public record and available for inspection by anyone on request) and communicate early and often, in writing and orally, to the Planning Department, the Planning Commission and the City Council the specific impacts that are presented by proposed projects. No one is in a better position to assess a project than those whose residences are closest to it.

Importantly, the state legislature has been considering a number of potential amendments and clarifications which reflects a level of discomfort with a number of provisions of the HAA that are much too generous or vague or ambiguous or both. We cannot predict whether any will become law or, if they do, whether they will have any retroactive effect on previously proposed projects.

A good example of resident action is the reaction to the 8840 Burton Way project. This was the site of the two story Temple Emanuel education building. The developer who purchased the site now proposes a 20 story/200 residential unit structure that will dwarf the two, three and four story multifamily buildings that surround it. Residents of the IV Seasons project immediately south of the proposed building under the leadership of Renee Strauss have commenced communicating their views now to the planning staff well in advance of any formal entitlement hearings before the Planning Commission or the City Council.

Legally, it is important to understand that the bases for the developers’ contentions described above or any interpretations by state or local entities have NOT been tested in any California appellate court. There are at least three trial court decisions. For the most part these have resolved the issues presented in favor of the applicants. These decisions, however, are not binding on anyone other than the parties to those cases.

Open legal questions that have not been resolved at the appellate level are numerous. To what extent will a court determine that a city’s housing element is in substantial compliance that the state has refused to certify?

Are there any limitations on the size of a “builder’s remedy” project? More specifically, must the City approve a residential project that is fifty stories tall on the corner of Wilshire and Beverly Drive that includes 20% of its units that are “affordable”

Are there provisions of the HAA that are in conflict with the provisions of the federal or state constitution?

We should assume that our City Council will ensure that these questions and more will be analyzed, evaluated and employed by the most sophisticated counsel available to protect our special city.