Affordable Housing Developer Sues City of Santa Clara Over Fate of 240-Unit Project

Republic Metropolitan, Santa Clara, Valley Transit Authority

(EDITOR’S NOTE: The project site is located at 500 South Beaton Street. The project was expected to have 240 residential units, 29 of which would have been designated as affordable.)

A major local housing developer Republic Metropolitan (“ReMet”) filed a lawsuit against the City of Santa Clara seeking damages and other relief after the City refused to respond to a claim ReMet filed in November 2021. According to the allegations in ReMet’s civil complaint, the City illegally unilaterally cancelled a planned mixed-use transit-oriented development that ReMet, the City, and the Valley Transit Authority (VTA) had worked collaboratively on for over three years.

PROJECT LOCATION

The planned project was to be located on vacant land between Santa Clara University and the Santa Clara CalTrain Station and would have provided affordable workforce and student housing to hundreds of Santa Clara residents.

The affordable housing project was planned for two connected parcels of land, one owned by the City and one by the Valley Transit Authority (VTA). For three years, Republic had worked hand-in-hand with the City and VTA to design site-specific housing with hundreds of affordable units. ReMet’s complaint alleges the City manipulated City Council rules and administrative procedures to block the affordable housing project in violation of their signed agreement and several state laws. The cancellation means that for now, the land will remain in its present form as a parking lot.

PROJECT CANCELLATION

The project’s cancellation marked a major setback in the decades-long effort to create affordable housing through sensible, environmentally sustainable, transit-oriented infill development in the heart of the City. C.J. Gabbe, Ph.D., an urban planner who teaches in the Environmental Studies and Sciences Department at Santa Clara University:

“As an associate professor at Santa Clara University who researches housing policy and as a renter in the city of Santa Clara, I am keenly aware of the housing affordability crisis in the San Francisco Bay Area. There is a shortage of housing generally, and particularly housing options for low- and moderate-income households. As a result, at least 2 in 5 Santa Clara County (SCC) renters live in housing that is ‘unaffordable’ to them and 1 in 5 renters lives in housing that is ‘severely unaffordable’ (2019 U.S. Census ACS). California cities are required by state law to plan for local and regional housing needs. Most cities, including the city of Santa Clara, are falling short. A recent Southern California News Group analysis gave each city in California a grade related to how well it meets its own housing goals. The city of Santa Clara was graded with a “D” for its housing production for very low-, low-, and moderate-income households, and a “C-” overall. Additionally, achieving local and state climate goals necessitates housing development near high-quality public transit across the Bay Area, such as near frequent bus service and Caltrain stations. The city of Santa Clara has great opportunities to enable climate-friendly housing for low- and moderate-income households within its boundaries.”

LOCAL HOUSING NEEDS

Chan L. Thai, an assistant professor at Santa Clara University, noted how much pressure the housing situation puts on young SCU faculty who want to reside nearby:

“After moving to several different cities to complete my Master’s, Doctorate, and post-doctoral training, I finally was able to return home for a faculty position at Santa Clara University. During my first year, I was distressed to find that despite having a stable professional job that required an advanced degree, I was having incredible difficulty making ends meet due to the astronomical housing prices in the area. My salary as a professor was not enough because my rent was almost 45% of my income each month. The cost of living in the area is not financially feasible for many who work at the University, and has resulted in either extremely long commutes or valuable faculty and staff leaving the University altogether.”

Michelle Bezanson, a professor of biological anthropology who teaches in the Santa Clara University Department of Anthropology, notes that students lose out as well, both from the lack of housing and from the message that the housing situation sends:

“The lack of affordable housing in Santa Clara has been one of the biggest burdens in attracting and retaining excellent faculty and staff. My personal history was one of living paycheck to paycheck while paying student loans….As a professor in my fourth year, I was still living like a graduate student and I had no idea what a future might bring in Santa Clara….Without affordable housing, we will turn into a homogenized area of technology and entrepreneurship. We will lose culture, the arts, and the things that make communities thrive. One only needs to look at ski towns or boom towns to see how people get pushed out to make way for the privileged and wealthy. I think the saddest part is seeing Santa Clara, San Jose, Palo Alto etc. role modeling for students that come to the universities in the area. Housing prices contribute to a framework where individual goals are to accumulate wealth, be insta-famous, and live in expensive hotspots. This is sad and humiliating for the rest of us who attempt to teach about ethical ways forward.”

CLOSED MEETING VIOLATIONS

The complaint alleges that the City’s unlawful decision was taken in a secret closed session of the City Council, in violation of California’s open meetings law. “ReMet alleges the City did in secret what they never could have achieved had they proceeded through proper channels,” said James Dallal, a senior associate at Cotchett, Pitre & McCarthy LLP, one of the lawyers who represents ReMet in the lawsuit. “Local residents – students and workers – are looking to the cities where they live to step up and create affordable housing. Until that happens, everyone loses out.”

NEED FOR AFFORDABLE HOUSING IN STATE

The cancellation takes place in a contentious climate involving several high-profile denials of planned affordable housing projects by other cities throughout California, and also while the state, in the words both of the Legislature and the courts, “is suffering a housing crisis of epic proportions.” As repeatedly reported in the press and confirmed in academic studies, the lack of housing not only causes high rents and homelessness but spills over to create a whole array of societal ills, including ongoing threats to the state’s economy, environmental health, quality of life, and public safety.

“The housing affordability crisis is undermining the California Dream for families across the state, and threatens our long-term growth and prosperity. Making a meaningful impact on this crisis will take bold investments, strong collaboration across sectors and political courage from our leaders and communities to do the right thing and build housing for all.”

–Governor Gavin Newsom, in a bill-signing statement on September 16, 2021

“Everywhere you look we are in a housing crisis. Our families are facing a housing shortage and affordability crisis of epic proportion. . . . This work is critical. Everyday millions of Californians worry about keeping a roof over their head while others have already lost theirs. . . . As Attorney General I’m committed to using all the tools my office has available to advance Californians’ fundamental right to housing.”

HOUSING ACTION COALITION

One has to only look at the letter attached to this Release from Todd David, Executive Director of the Housing Action Coalition, that states:

“This site is ideally-located to encourage the use of green transit options. Residents will live within walking distance of Caltrain, Altamont Commuter Express, Capitol Corridor, and six VTA bus routes.”

Many individuals have voiced their overwhelming support for the need for affordable housing in the San Jose area. Megan Fluke, Executive Director of nonprofit Green Foothills and resident of Santa Clara County said:

“It’s alarming that Republic’s affordable housing proposal was taken off the table without explanation and allegedly in violation of the open meeting rules. We need more housing close to jobs and transit.”

REQUEST FOR STATE INVESTIGATION

ReMet has filed a request with the California Department of Housing and Community Development and the Attorney General’s Office to initiate an investigation with the possible outcome involving the City’s decertification of housing element compliance and violation of any laws.

Republic Metropolitan (ReMet) is national in scope, emphasizing public/private projects with a particular interest in transit-oriented development (TOD). Re/Met is currently developing transit-oriented projects across the San Francisco Peninsula and is working on major projects in Washington, DC, Denver, Charlotte, and Los Angeles.

Cotchett, Pitre & McCarthy engages exclusively in litigation and trials and has earned a national reputation for its dedication to prosecuting or defending socially just actions.

Ann Ravel Law is led by Ann Ravel, former Santa Clara County Counsel, former Chair of the Federal Election Commission and the California Fair Political Practices Commission and Deputy Assistant Attorney General at the United States Department of Justice. She is also a former member of the Judicial Council of California, and is considered to be one of the top attorneys on Government and Civil Rights Litigation.

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