State of California to Elk Grove – Denial of Oak Rose supportive housing project broke state fair housing laws

In a scathing 11-page letter dated October 12 to Elk Grove City Manager Jason Behrmann, the California Housing and Community Development Department (HCD) has notified the city their July denial of the Oak Rose supportive housing project is violating Senate Bill 35. The bill, signed into law by former Gov. Jerry Brown in 2017, includes several mandates to address California’s affordable housing shortage.

This letter follows a lawsuit filed yesterday by Long Beach, Calif.-based Excelerate Housing Group and Sacramento-based Hope Cooperative against Elk Grove. That lawsuit, filed in Sacramento County Superior Court, claims Elk Grove “unlawfully ignored” state laws that should have allowed their Oak Rose project to move forward and improperly denied requested approvals.

Following the denial, Execelerate and Hope filed complaints with the Sacramento Housing Alliance and the HCD, which led to an investigation of the city’s actions.

According to the HCD letter, when the Elk Grove City Council on July 27 upheld a Planning Commission denial of the Old Town Elk Grove 67-unit Oak Rose apartment complex, the city claimed the project was not eligible for a streamlined approval process, which is part of the SB 35 law. The city council reasoned that the project did not comply with the Old Town Special Planning Area (SPA).

Even though many residents and the city council claim it was the wrong project in the wrong location, the HCD said the Elk Grove Boulevard Old Town location was ideal. Identified as a High Resource Opportunity Area, research, they say, shows these neighborhoods “support positive economic, educational, and health outcomes for low-income families—particularly children.”

The HCD said the “denials are inconsistent with provisions of SB 35. As cited in the letter, those provisions include:

“The City failed to provide a sufficiently detailed written determination of inconsistency within 60 days” – As stated in the letter, although the city issued a required SB 35 letter, the city did not state the project was in conflict with the SPA standards, which the HCD says is required.

“The Project is deemed consistent with all standards related to density”

The HCD said, “because the project complies with the general plan’s limits on density, the City was required to treat the project as consistent with the ground floor use restriction for SB 35 purposes.”

During Planning Commission and City Council meeting deliberations, the ground floor apartments in the Oak Rose project uses were cited in their denials.

Additionally, the letter says under provisions of the streamlined process, the city has to inform applicants of deficiencies. The HCD said the city failed to perform this duty.

Interestingly, the HCD cited the city’s approval of the Elk Grove Railroad Courtyards Project (EGRCP) market-rate project, also located in the Old Town Special Planning Area. The letter says:

“Approval of the EGRCP demonstrates a double standard in how the City applies its regulatory standards in the Commercial zone of the OTSPA. By allowing ground floor residential uses in a market-rate project while denying the same request to a project providing 100 percent of the units affordable to lower-income households, the City has violated Government Code section 65008”

The letter states the city has met 195 percent of its above-moderate-income housing needs but only 7.2 and 7.5 percent of its very low and low-income allocations. They stated, “such a double standard is notable.”

Additionally, the letter says the city violated its obligation to Affirmatively Further Fair Housing (AFFH) and the State Housing Element law. The city has 30 days to respond, and non-compliance could result in penalties, including loss of various state grants, fines up to $100,000 a month, a referral to the State Attorney General’s office, and “the loss of local land use authority to a court-appointed agent.”

“We are unable to respond to specific questions; however, the community and those in the region should know that the City of Elk Grove is committed to providing housing options for everyone,” Elk Grove City Manager Jason Behrmann said in a press release.

In their defense, the city’s statement claimed construction of 700 affordable housing units will soon start, and there are 300 in various stages of development.

The city also criticized SB 35, saying it “and other State legislation intended to address the construction of affordable housing usurps local control over land use decisions and creates an environment that discourages dialogue, collaboration and partnerships among affordable housing developers, neighborhoods and local governments and replaces it with a more costly, time-consuming and adversarial process.”

Elk Grove Mayor Bobbies Singh-Allen who is on record promising more affordable housing in the city  (see video below), said, “We know that every city must do its fair share to address the state housing crisis and we remain committed to supporting balanced solutions that engage the community and encourage a dialogue that includes all voices and perspectives.”

In a statement from Excelerate Housing Group, the Oak Rose project developers, CEO Dana Trujillo said the city’s actions forced their lawsuit.

“Our goal is to create a beautiful apartment building in a nice neighborhood that offers Elk Grove’s most vulnerable residents a safe, comfortable, and affordable place to live and receive much-needed services,”  Trujillo said. “We have exhausted every avenue with the city to get them to approve the project. At this point, we have no choice but to ask for the court’s assistance to get this project the green light it legally deserves.”

Excelerate and Hope say Elk Grove is required to build 4,200 very low and low-income housing units over the next eight years, and the Oak Rose project would be a crucial link to provide supportive services for those seeking an exit from homelessness. The groups claim a 95 percent success rate in keeping individuals housed.

“We are mission-driven organizations that spend every day working to provide stable living environments for vulnerable Californians who need support and services,” Erin Johansen, CEO of Hope Cooperative, said. “In this case, we feel compelled to act: It is not right that a city can just say ‘no’ to a project that will house our unhoused neighbors — even when this housing checks every legal box. Sometimes, you have to do the right thing for the community. This is one of those times.”

The HCD letter to Elk Grove can be viewed below.