A Long Beach developer is threatening to use state law to circumvent an anticipated decision by the Hawaiian Gardens City Council to deny a proposed project.

The City Council signaled in October that it will likely deny the proposed development—a modest multigenerational and workforce housing project—over density and economic concerns. But state law intended to spur new housing may allow the project to move forward regardless.

The developer, Long Beach-based Urban Pacific, proposed the 13-unit development for 12300 Tilbury St., which currently serves as a construction storage yard on the border of the city of Lakewood. The lot is currently zoned for commercial use but has been identified by the city as an opportunity site for redevelopment.

Each three-story “urban townhouse” would consist of five bedrooms, four bathrooms, in-unit washer and dryer, a small front yard, a balcony and a direct-access two-car garage.

“It’s a good project, but it’s not a good project for Hawaiian Gardens,” Mayor Luis Roa said during an Oct. 25 council meeting. In Hawaiian Gardens, the mayor and mayor pro tem are voting members of the five-person council.

After public comments and brief statements by councilmembers, the body voted 4-0 to direct city staff to draft a “resolution of denial” that the council will weigh this month. One councilmember recused themselves from the hearing because they live near the proposed project site.

Ahead of the vote, Urban Pacific gave a presentation that addressed previous concerns brought up by the council and during public comment. Several residents, however, again took issue with the project, with complaints mostly centered around density and parking.

David Marlow, who lives near the proposed project site, said the development of accessory dwelling units, or ADUs, which includes garage conversions, already is taking away too much parking from residents. Hector Flores, another nearby neighbor of the site, said “the nightmare of parking and congestion still exists.”

Several councilmembers, meanwhile, said approving the development would be a “disservice” to the community because rents would be too expensive for many residents. The council said what is needed is mixed-use and affordable housing developments—which would likely have a higher density than the Urban Pacific project.

Other than Urban Pacific’s project, however, the city has no proposed residential developments.

During his presentation, Urban Pacific founder Scott Choppin presented data that showed traffic would actually be 88% lower with his project compared to a retail- or services-focused redevelopment.

Despite acknowledging the need for more housing, the City Council agreed with the residents’ concerns and added that there are various economic issues to be considered, including the city’s need to diversify its revenue streams, which currently rely heavily on the Gardens Casino.

“For the most part, we are fully built out. We have almost zero commercial space left,” Councilmember Victor Farfan said during the meeting. “The space that is left, the city wants to do its best to diversify its revenue streams as much as possible.

“It’s hard for me to say this is the best opportunity for the community to make the most amount of money.”

While the urban townhouse units are not affordable as defined by the government (subsidized housing with covenants that require rents be attainable for those making 60% or less of the area median income), Choppin argues it is affordable for families with multiple generations living under one roof or as workforce housing.

Urban Pacific has successfully built this product type in several cities throughout Southern California, including Fullerton and Montebello, as well as numerous projects in Long Beach, according to Choppin.

Rents at the company’s completed projects range from about $3,000 to $3,750 per month, or $750 per bedroom. In the Long Beach area, many new market-rate one- and two-bedroom apartments are renting for anywhere between $2,000 and $3,000.

Because the housing type is meant for multigenerational families and workforces, the cost is expected to be shared among several working people, Choppin explained.

“This dynamic is turning out to be true,” Choppin said, noting his completed projects are leasing well and have not caused the various issues brought up in Hawaiian Gardens. “It’s unfortunate that the city did this, but we have an interesting set of tools that we never had before.”

Using the state law

At less than 1 square mile and with a population of less than 14,000, Hawaiian Gardens sits on Long Beach’s eastern border. Like every other city in California, the tiny municipality continues to fall short of its housing development goals as outlined by the state.

According to the city’s draft housing element, Hawaiian Gardens is made up mostly of single-family units, which account for 61.1% of the city’s housing stock. Out of 3,646 units, 1,748 are single- family detached, 527 are single-family attached, 364 are multifamily with two to four units, 834 are multifamily with five or more units, and 251 are mobile homes.

From 2000 to 2020, the number of single-family homes in Hawaiian Gardens increased by 314, while the number of multifamily and mobile homes decreased by 190 and 24, respectively. Less than 5% of the city’s housing stock was built after 1990.

The city’s residential vacancy rate is 2.1%.

Based on the most recent Regional Housing Needs Assessment, Hawaiian Gardens must develop 331 residential units by 2029. Cities are required by state law to submit housing elements that detail how they will meet their RHNA allocation, including identifying sites for redevelopment.

Hawaiian Gardens officials submitted a draft housing element for review in December 2021. In a February 2022 letter, the California Department of Housing and Community Development informed the city that revisions were needed to comply with state law.

The state outlined dozens of revisions, mostly centered around the need for analysis on topics such as “segregation and integration and disparities in access to opportunity,” substandard housing and homelessness within city limits, identifying contributing factors to fair housing issues, analysis of special housing needs for various groups, including large families, and more.

The city resubmitted its draft housing element on Aug. 15, according to Community Development Director Elise McCaleb. On Sept. 29, the state responded with additional revision requirements, which city staff are still working to address, she told the Business Journal on Nov. 21.

Having missed the Oct. 15 deadline for a certified housing element, the city is now out of compliance with state law, which triggers a section of Senate Bill 330, the Housing Crisis Act of 2019, that allows developers to submit an application to the state to go over the heads of local governments.

Since 1990, the state’s Housing Accountability Act (which SB330 amended to limit local authority to downzone properties, among other things) has provided a so-called “builder’s remedy” that bypasses local zoning code and general plans if a city is not in compliance with state law and the project consists of at least 20% affordable units. The Urban Pacific project includes three affordable units, which is 23% of the proposed units.

With the city out of compliance and the number of affordable units, Urban Pacific’s lawyers at Holland & Knight argue the city is “forbidden from denying the project,” according to a Nov. 14 letter. The firm states that the project, which originally required a general plan and zoning change, does not have to be entirely consistent with city zoning and land use designation.

Once the application is submitted, the city cannot have its housing element certified and then use it to deny the project, Choppin said. Additionally, all applicable fees are frozen, meaning any subsequent increases by the city will not apply to the Urban Pacific project.

None of the councilmembers responded to requests for comment for this story.

The law firm urged the council to reconsider its decision ahead of the Dec. 13 meeting. If it does not, and the state approves the SB330 application, the firm said it is ready to take legal action if the city does not comply with the HAA within 60 days. Fines up to $10,000 per unit could be levied against the city as the result of subsequent lawsuits if the city does not comply.

“None of us hope it has to go there,” Choppin said, “but that’s the ultimate legal authority under these laws.”

Brandon Richardson is a reporter and photojournalist for the Long Beach Post and Long Beach Business Journal.