City of Malibu Loses Low Income Housing Lawsuit

Malibu City Hall

Does bunking the nanny in the pool house constitute low income housing?

A decision in L.A. County Court last week throws into question the City of Malibu’s 2014 decision to count “secondary units” like guesthouses as low or very low income housing in order to meet quotas demanded by the County of Los Angeles Department of Regional Planning.

For the 2008-2014 City Housing Element, Malibu City Council decided that 30 so-called “secondary units” — guesthouses and second homes on a single parcel — fall into the regional housing needs assessment (RHNA) criteria for low or very low income housing provided by the county, of which Malibu is supposed to include 188.

According to City Attorney Christi Hogin, these are units where homeowners can house nannies and household staff who “won’t be able to afford market-rate units.”

This was challenged by Trancas PCH LLC, a group which, according to Hogin, hoped to be “upzoned,” or receive special benefits from the City of Malibu in return for constructing a development, that would include some low or very low income housing units. Legal counsel for Trancas PCH was Fred Gaines of Gaines & Stacey LLP, who specified that six low income housing units were included in the original plan.

County Judge Richard L. Fruin, Jr., decided in favor of Trancas PCH on March 11 that “there is no evidence … that second units in Malibu are available to be rented for low and very low income occupancy.”

Gaines said in a celebratory statement that the victory for Trancas PCH against the City means that they will get another shot at being the developer to bring more low-income units to Malibu.

“This will require the City to reopen the Housing Element process, hold additional public hearings and make amendments to the City’s law before readopting. The City of Malibu currently has no dedicated low income housing units,” reads the statement written by Gaines.

Hogin isn’t as confident that the judge’s decision will take the City back to the drawing board.

“I don’t know what exactly we’re going to do in terms of responding,” Hogin said. “The court order was not as clear as Fred [Gaines] is with what has to be done.”

Hogin also added that the City is now in a new Housing Element, since the one Trancas PCH challenged ended in 2014, which means the outcome is unclear.

“The Housing Element is a planning document, not a rental agreement,” Hogin said, “It was only intended to plan for housing, it does not require the city to provide it.

“If we do reopen it and change it, we would be changing the prior element and changing that. They never sued over the current one.”

Another facet of the case that has Hogin scratching her head is the fact that the Housing Element passed RHNA requirements and was approved by the State of California before being overturned by Fruin in L.A. County Superior Court.

“The court says it isn’t going to give deference to the state’s decision, but it doesn’t say why,” Hogin said, mentioning the ability to appeal the decision should Council decide to go that route.

Fruin decided against other issues raised in the suit by Gaines on behalf of Trancas PCH including an accusation that the City violated CEQA, the California Environmental Quality Act, when it made an Environmental Impact Report (EIR) for Trancas PCH’s proposed project. 

“The EIR was adequate for the Council’s informed decisionmaking,” reads Fruin’s decision.

Despite this, Gaines felt this was a clear victory for Trancas PCH.

“The City of Malibu has gone to great lengths to avoid its legal duty to provide for low income housing opportunities. Some movie star’s mother living in the beachfront guesthouse of a $20 million mansion is not low income housing available to needy persons and families,” Gaines said in the statement.