Developer Sues City of Monte Sereno for Refusing to Meet State Housing Laws

Audit Revealed Monte Sereno Ignored Obligation to Provide Affordable Housing

SAN FRANCISCO -May 23, 2012 – A new lawsuit has been filed against the City of Monte Sereno, an exclusive suburb of California’s Silicon Valley, alleging that the City has persistently refused to meet its obligations under State Housing Law, has engaged in a practice of misrepresenting its level of compliance with state officials, has failed to provide adequate or sufficient housing opportunities, and has refused to comply with its mandatory legal duties.

“The City’s refusal to provide an independent audit, restate its housing numbers, initiate programs, some of which have been required since 2003, and rezone property pursuant to its current housing element, has left no other choice but to bring a lawsuit to force compliance with State Housing Law,” said Michael Durkee, attorney at Allen Matkins Leck Gamble Mallory and Natsis LLP, representing the petitioners.

An exhaustive nine-month audit of thousands of housing records over a 12-year period uncovered substantial irregularities between actual housing units produced versus the number of units reported to the State of California by Monte Sereno City officials. Mayor Susan Garner and all councilmembers were provided the audit data and asked to initiate an independent audit. Councilmember Malloy expressed concerned when presented with the data, and asked the Mayor to review the results immediately.

The audit revealed the City had substantially over reported its housing production to both the State of California as well as the Association of Bay Area Governments (ABAG), citing units that did not exist, undocumented units claimed as affordable, lack of addresses to support claimed “Rehabilitated units” and other serious infractions.

“The City continued to refuse to provide accurate reporting and evidence which would prove such claims were invalid, ” said Durkee. It’s unfortunate litigation is required to force a city to provide adequate housing in its own community, and to force it to abide by the agreement it made with the State of California regarding housing.”

Challenges alleging a failure to comply with State Housing law have been the topic of several lawsuits in the Bay Area.  In 2009, the City of Pleasanton was sued because of its lack of compliance with State Housing Law.  The City of Pleasanton was required to pay millions of dollars in fees and penalties and required to take immediate action to achieve compliance.

The lawsuit against the City of Monte Sereno seeks a writ of mandate directing the City to fulfill its mandatory duties identified in its Housing Element Programs including: annexation of certain parcels, amendments to the City’s General Plan, and zoning to provide for multi-family housing. The suit also seeks to revise the City’s Housing Element to make it legally adequate, set aside two recent City Council actions that perpetuate the City’s noncompliance with its mandatory duties to provide housing; and pay monetary damages for violating substantive due process rights through the City’s previous actions.

The case can be viewed here:  – Hacienda Realty LLP v City of Monte Sereno et al.

Allen Matkins Leck Gamble Mallory & Natsis LLP, founded in 1977, is a California-based law firm with approximately 220 attorneys with offices in four major metropolitan areas of California: Los Angeles, Orange County, San Francisco and San Diego. The firm’s core specialties include real estate, real estate finance, construction, land use, natural resources, environmental, corporate and securities, intellectual property, joint ventures, taxation, bankruptcy and creditors’ rights, employment and labor law, and dispute resolution and litigation in all these matters. For more than 30 years, Allen Matkins has helped clients turn opportunity and challenge into success by providing practical advice, innovative solutions and valuable business opportunities.

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