The Pleasanton City Council agreed Tuesday to pay $1.9 million in legal fees to two affordable housing coalitions in a 4-0 vote that also scuttled the city's voter-approved 1996 housing cap that was designed to prevent runaway residential growth.
With the vote, the council authorized the first payment of $995,000 from its "Self-Insurance Retention fund as the first of two installments totaling $1.9-million in taxpayer funds to cover legal fees incurred by Urban Habitat and Public Advocates, who first sued the city in 2006 over affordable housing issues, including the cap.
Last March, Judge Frank Roesch of the Alameda County Superior Court ruled in favor of the housing coalitions and order Pleasanton to strip the housing cap from its rule books.
Atty. Tom Brown, who was hired as outside counsel to represent Pleasanton in the litigation — and whose firm also was paid $500,000 for its services — told the council that the legal battle saw early successes for the city in early Superior Court rulings, but then lost on appeal to both the State Court of Appeal and the State Supreme Court, with the case ultimately being decided by Roesch.
Atty. Gen. Jerry Brown also sued the city over its new General Plan that included the housing cap and joined the affordable housing coalitions in their Superior Court suit.
The settlement agreed to Tuesday night ends all litigation against the city over these issues with Brown's office also agreeing to waive any claims against the city for reimbursement of its legal expenses.
It also removes a ruling by Roesch that had prevented Pleasanton from issuing any commercial building permits until the negotiations had been successfully completed or the city had appealed his decision. With little commercial development under way in the current economy, the ruling had no impact on Pleasanton although some investors had expressed concerns if the ban lasted much longer.
The settlement brought groans from the four council members but they also said they had little choice in settling litigation that Brown and other legal experts said would likely become much more costly if an appeal was filed with little chance of winning the case. Mayor Jennifer Hosterman was on vacation yesterday and did not join in the final council vote.
In ruling against Pleasanton, Roesch agreed with the two housing coalitions that the housing cap violated state law and prevented the city from accommodating its regional "fair share" housing needs assessment numbers (RHNA) as mandated by the state. In response, and as part of the settlement, the city agreed to rezone additional acreage of available land for high density housing—apartments and town houses up to 30 units per acre. That process is now under way in a section of Hacienda Business Park.
The housing cap of 29,000 units was adopted in 1996 by voters at the recommendation of the late Mayor Ben Tarver, former Mayor Tom Pico and others on the City Council at the time. Pico said it was an arbitrary figure that allowed the city and school district to plan ahead for serving residential needs as the city reached buildout.
The latest figures reported by the city show that 27,000 apartments and homes have been built in Pleasanton with few requests for additional housing in the current building downturn. That could change and Urban Habitat representatives convinced Roesch that the cap would prevent the city from building sufficient housing in the future to accommodate its state-imposed share of low-income, affordable and workforce housing.
Councilwoman Cindy McGovern said the housing cap was put in place with good intentions by Pleasanton voters who wanted to keep the small town appeal and not overwhelm the city with more traffic than it can handle or exceed the planned limits on water and sewer capacity.
"I attended the court hearings and sat in on the discussions with the affordable housing groups," she said. "It became clear to me that local laws are now being superseded by state laws and that we would have to find an agreement that satisfied everyone while still maintaining local control."
Councilwoman Cheryl Cook-Kallio said that the housing cap was probably consistent at the time with the view of the public to limit the number of homes that could eventually be built in Pleasanton.
"None of us wants to see unbridled growth in our city and now we have to keep our eye on the ball and focus on retaining as much local control as possible."
But City Manager Nelson Fialho said the city's Growth Management provision remain in place, which limit the number of housing permits each year to no more than 350 units. That number has not been issued in years, he said.