In an ongoing legal dispute about the use and interpretation of a state housing law, the developer of a 501-unit project proposed on Las Animas Avenue now says the City of Gilroy must allow the residential complex to proceed.
The developer of the project, TenSouth, cited a July 2 letter from California Department of Housing and Community Development Assistant Deputy Director David Zisser to City of Gilroy staff to support the claim that the project at 315 Las Animas Ave. should be approved under a state housing law known as “builder’s remedy.”
“(Based) on HCD’s understanding of the timeline of events described in this letter, the proposed
project is eligible for the protections of the Builder’s Remedy,” says the July 2 letter to Gilroy Community Development Director Sharon Goei.
The dispute and uncertainty over the complicated law is related to the certification of Gilroy’s Housing Element and the timing of applications submitted last year for the TenSouth project.
Gandolfi Investments, a subsidiary of TenSouth, submitted a preliminary application for the project in July 2023. In December, the developer filed more detailed plans for the 501-unit housing development.
TenSouth and its subsidiary applied for the project under the California builder’s remedy law, which allows developers to bypass local zoning laws and build certain types of housing projects, even if those plans do not comply with a city or county’s zoning ordinance or general plan. A provision of the Housing Accountability Act, the builder’s remedy is triggered when a local jurisdiction fails to update its state-mandated housing element, or if the element is not found to be in compliance with California law.
In January, the city’s building and planning department informed the developer that the application was incomplete, and asserted that the builder’s remedy does not apply because the city had adopted a draft housing element in May. The city’s housing element, an eight-year housing plan required by state officials, was not certified by the state until August—after TenSouth filed a preliminary application in July.
Zisser’s July 2, 2024 letter from HCD states that a city cannot “self-certify” its own housing element before the state signs off on it. The letter also tells Gilroy officials that the city cannot reject a project that is filed under the builder’s remedy due to inconsistency with the city’s general plan or zoning.
William McGuinn, General Counsel for TenSouth, said Zisser’s letter “definitively states” that the Las Animas project should be allowed to proceed under the builder’s remedy.
“To date, the City of Gilroy has refused to accept that 315 Las Animas Ave. is a Builder’s Remedy project and has wrongfully delayed the processing of this much-needed development that will help working families find housing,” McGuinn said. “This letter clears up any doubt there may have been about the Builder’s Remedy question, and we hope the City will stop delaying processing the project.”
McGuinn added that the city could face fines and litigation costs topping $25 million if it continues to delay or try to stop the project. He added that TenSouth tried to negotiate a settlement with City Hall before July 2, but that effort was rejected.
Gilroy Mayor Marie Blankley said she is aware of the July 2 letter from Zisser to Goei, but Blankley declined to comment because of the ongoing litigation. She said the city council will likely discuss the dispute in closed session at the July 29 meeting.
Plans for the Las Animas project call for multi-family units consisting of 50 two-story townhomes, three four-story apartment buildings, a clubhouse building and green space.
The 27-acre site, currently a vacant lot zoned for industrial uses, is located at the intersection of Las Animas and Murray avenues.
I grew up in a development similar to this. The fact that cars are separate from the homes makes it much safer and family friendly. This provides much needed housing, should be an obvious yes.