Over three weeks ago, Gandolfi Investments—which has proposed a 501-unit project at 315 Las Animas Ave—sued the City of Gilroy and City Council for violating California law.
According to California’s Department of Housing and Community Development, Gilroy failed to meet its deadline to adopt a housing element that complied with state housing laws. Because Gilroy did not have a compliant plan for housing in place, under a law known as the “Builder’s Remedy,” the city forfeited its ability to disapprove projects offering affordable housing that are inconsistent with Gilroy’s zoning ordinance or General Plan.
California has a housing shortage. Sacramento legislators and local officials, including in Gilroy, have recognized this challenge for some time. The housing shortage and the corresponding high cost of housing hurt Gilroy families and those who dream of living in our community. We need solutions, and we need them fast!
The state got involved to address this problem because many local jurisdictions were not approving new housing as quickly as needed. The State Legislature passed legislation that prioritizes housing development.
One such piece of legislation, the Housing Crisis Act of 2019, prohibits local jurisdictions from enacting new laws that would have the effect of reducing the legal limit on new housing within their borders or delaying new housing using administrative or other regulatory barriers.
The 315 Las Animas project is protected by this law because at least 20% of its units will be made affordable to Gilroy’s workforce families. The State’s Department of Housing and Community Development has written to our Community Development Director to advise that this project is protected by the “Builder’s Remedy” law.
The state has identified the problems with how city staff is processing the application and warned that failure to follow the state’s guidance is a violation of the law.
Despite all this, the City Council voted 4-3 to fight the lawsuit and resist the state’s enforcement of the law. We write to explain what this lawsuit may mean for Gilroy residents and businesses—and how it could all be avoided.
First, the city’s budget situation is problematic. Recently, the city council requested, and the council approved a quarter-cent “dedicated public safety transaction and use tax” on purchases made by anyone spending money in Gilroy. This initiative will appear on the November 2024 ballot. Our FY 2024-25 budget highlights that despite our population growth, our revenues are not keeping up with our costs.
Second, whether or not Gilroy ultimately succeeds in fending off the lawsuit, we still have to spend taxpayer dollars on lawyers to fight against this project and potentially against the state.
The last city to attempt fighting this law lost in court after Attorney General Bonta joined the lawsuit to enforce California law against that city. Worse still, if we lose in court and still refuse to approve the project, the city and our taxpayers are on the hook for a potential $25 million fine from the state as well as payment of Gandolfi’s legal fees.
On the other hand, Gandolfi offered the city an extensive community benefits package that would help the entire community. It’s doubtful that these benefits would be available should Gilroy lose the lawsuit.
Third and most importantly, Gilroy urgently needs housing that is affordable, particularly for working families—teachers, police and fire personnel, healthcare workers and other essential members of our community.
The three of us voted against fighting the lawsuit because we remain deeply concerned that the legal and financial risks to the City of Gilroy and its taxpayers are significant. A negotiated solution—one that benefits the City of Gilroy and its residents—is the more responsible course of action.
Fred M. Tovar, Rebeca Armendariz and Zach Hilton
Gilroy City Councilmembers
Freddy, it’s delusional thinking driving you to wrong conclusions. Gilroy is fast becoming the mecca of bad examples for other cities not to follow. These housing edicts are just another of example of bad leadership trickling down from the state to our compassionate city.
Where can we find what the “communitu benefits package” involves and is that guaranteed?
How would the process for the “20% of units would be made available to GILROY workforce” be implemented?
Where can we find what the “community benefits package” involves and is that guaranteed?
How would the process for the “20% of units be made affordable to GILROY workforce” be implemented?