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Attachment 53 - Letter from A. Don Capobres, Linda Mandolini, and Wendi Baker dated February 13, 2015GROSVENOR EDEN February 13, 2015 COMMUNITIES Or DISTINCTION Town of Los Gatos Honorable Mayor Jensen and Council Members Housing Element Advisory Board c/o Laurel Prevetti, Assistant Town Manager and Community Development Director 110 E. Main St. Los Gatos, California 95031 Honorable Mayor Jensen, Council Members, and Housing Element Advisory Board Members: At the February 3rd, 2015 Town Council Meeting, Council sought direction from Staff and the Town Attorney to determine what the legal limitations may be for requiring developers on the North 40 to provide for either an age 55 -plus or 62 -plus affordable or market rate component through the North 40 Specific Plan. This question has arisen on numerous occasions during the Specific Plan process. For our own clarity, we requested a legal analysis from Goldfarb & Lipman. We have attached their conclusions for your reference. In brief, while senior housing can be incentivized by a Specific Plan, requiring such housing types would violate state and federal fair housing laws. . Although the Town's Specific Plan is still in process, after years of observation and discussion with the Town, we respect that the Specific Plan emphasizes residential design towards the Town's unmet housing needs, including places for senior to live. We embrace the Town's vision in the Specific Plan which allows for the provision of a multi - generational and mixed income neighborhood. We are anxious to continue working with the Town to implement this vision. We appreciate your consideration of the attached letter, and are available for any questions regarding this matter. Sincerely, A. Don Capobres Senior Vice President Grosvenor Attachment: Fair Housing Issues Memo Linda Mandolini President Eden Housing �ag,e,d , Wendi Baker Vice President of Development SummerHill Homes ATTACHMENT 5 3 This Page Intentionally Left Blank gold farb 1300 Clay Street, Eleventh Floor l i p m a rf Oakland, California 94612 attorneys 510836 -6336 M David Kraal February 12, 2015 Lynn Hutchins Karen M. Tiedemann Thomas H. Webber Dianne Jackson Mclean To Michelle D. Brewer Don Capobres, Grosvenor Americas Wendi Baker, SummerHill Homes Jennifer K. Bell Robert C. Mills From Isobel L. Brown Barbara E. Kautz James T. Diamond, Jr. Fair Housing Issues Regarding Planning and Families with Children Margaret F. Jung Heather J. Gould Summary Juliet E. Cox William F. DiComillo During hearings on the North Forty Specific Plan, public comments have been Amy DeVaudreuil made opposing the Town of Los Gatos' (the "Town ") approval of housing that Barbara E. Kautz may attract families with school -age children because of school overcrowding. In particular, proposals have been made that development on the site be limited to Erica Williams Orcharton senior housing or to other housing that will not accommodate families with Luis A. Rodriguez school -age children. Xochitl Carrion Rafael Yaquion Both federal and state law prohibit the Town from using its planning and zoning powers to deny residency to, or make housing unavailable to, or discriminate Celia W. Lee against, families with children. Planning or zoning restrictions that are adopted to Vincent L. Brown discourage families with children from living in the Town, or that prevent Hana A. Hardy families with children from living in the Town, such as zoning sites to permit Caroline Nosello only senior housing or limiting the number of bedrooms in residences, would Eric S. Phillips deny residency to, make housing unavailable to, and discriminate against families with children. Elizabeth Klueck Further, a property owner or manager may not select individual tenants or buyers on the basis of age unless the housing is designed as senior housing and the property is operated consistent with federal and state requirements for senior San Francisco housing. 415 788 -6336 Los Angeles Analysis 213 627 -6336 A. Zoning for Senior Housing San Diego 619 239 -6336 Federal and state statutes forbid the Town from enacting or enforcing land -use Goldfarb & Lipman LLP laws that operate to make housing "unavailable" based on "familial status. ". 1588 \03 \1565758.4 February 12, 2015 Page 2 "Familial status" is generally defined as a household containing a person under 18 years of age residing with a parent or guardian. (Gov't Code § 12955.2.) In particular: • The federal Fair Housing Act ( "FHA ") (42 U.S.C. § 3604(a)) forbids actions by cities that operate to make housing "unavailable" based on familial status [and other listed factors]. • The California Fair Employment and Housing Act ( "FEHA ") (Gov't Code § 12955(1)) prohibits discrimination through land use practices that make housing opportunities "unavailable" because of familial status. • Planning and Zoning Law (Gov't Code § 65008(a)(1)) invalidates any planning action if it denies the enjoyment of residence to any persons because of familial status, age, [or other factors]. Section 65008(b)(1) forbids cities from prohibiting or discriminating against any residential development because of familial status or age. Town zoning and planning actions taken for the purpose of discouraging the construction of housing for families with children would violate these federal and state fair housing laws. Similarly, planning and zoning actions that on their face prevent occupancy of housing by families with children — even if done without the intent to exclude families with children — would violate federal and state fair housing laws. Examples could include allowing only senior housing to be built on designated sites or limiting the number of bedrooms in homes. The Senior Housine Exception. All of the fair housing statutes contain exceptions for senior housing constructed and designed in conformance with Civ. Code §§ 51.2 — 51.4 and similar provisions of federal law. These sections allow discrimination based on age and familial status by a "business establishment" if the housing is built and designed to serve seniors. The California Legislature made some of the requirements for senior housing in California more stringent than those imposed by the Fair Housing Act "in recognition of the acute shortage of housing for families with children in California." (Civ. Code § 51.4(a).) A developer may propose, and the Town may approve, a development proposed by a developer for senior housing but the Town cannot require senior housing to be constructed or designate a site for senior housing when there is no proposal or intent by a "business establishment" to construct such housing. There is no exception to this rule for affordable senior housing. 1588 \03 \1565758.4 February 12, 2015 Page 3 As discussed further in the next section, senior housing in compliance with these provisions must either require all residents to be 62 years of age or older; or comply with more stringent design standards and require at least one member of each household to be 55 years of age or older. Housing otherwise cannot have age limits or be limited to 'adults only,' and managers and brokers cannot consider age or familial status in selecting tenants and buyers. Zoning for Senior Housing. Local agency efforts to require housing to be built or even maintained for seniors have usually been overturned by the courts. For example: Despite an exemption in State law to allow Riverside County to maintain long- standing senior housing zones, these were found to violate the Fair Housing Act because the County did not ensure that the housing within these zones actually complied with the statutory requirements. (Gibson v. County of Riverside, 181 F. Supp. 2d 1057 (C.D. Cal. 2002).) Note also that the specific exemption in State law for Riverside County's zoning suggests that similar zoning by other cities and counties would violate state fair housing laws. • An ordinance adopted by American Canyon to require a mobilehome park approved as a senior park to maintain its senior status, rather than convert to an all -age park, was found to violate the Fair Housing Act because the park had never, in fact, actually been operated as a senior park in compliance with state and federal law. (Waterhouse v. Town of American Canyon, 2011 U.S. Dist. Lexis 60065 (N.D. Cal. 2011).) • A mobilehome park owner who alleged that the City of Fillmore adopted invalid subdivision conditions for the purpose of preventing the park from converting from a senior park to an all -age park was found to have standing to sue the City under the Fair Housing Act. (El Dorado Estates v. City ofFillmore, 765 F.3d 1118 (9th Cir. 2014). One ordinance was upheld. The Town of Yucaipa was found to be in compliance with the Fair Housing Act when it adopted zoning prohibiting existing senior mobilehome parks, which in fact were being operated as senior parks, from converting to all -age parks. (Putnam Family Partnership v. Town of Yucaipa, 673 F.3d 920 (9th Cir. 2012).) The decision was confined to the situation where the parks were already operating as senior housing. The Court specifically declined to determine if its decision would be the same if the housing was not already serving seniors. (Id. at 927 n.3) The decision was also based on federal law alone and did not consider possible violations of State Planning and Zoning law or FEHA. State law does 1588 \03 \1565758.4 February 12, 2015 Page 4 not have the same language which was relied upon by the Court to uphold Yucaipa's ordinance. The Court also noted that the federal statute included a policy of "preserving" senior housing and that Yucaipa's intent appeared to be to preserve existing senior housing "rather than animus against families with children." (Id. at 931.) By contrast, in Los Gatos, there has been extensive public comment, testimony from the School District, and statements by decision - makers indicating that the Town wishes to discourage families with children from residing in the North Forty because of school overcrowding. An early draft of the North Forty Specific Plan stated specifically that, "Residential product types (market rate and affordable) shall be limited to product types that respond to emerging demands of the seniors, empt� nesters, and young adult demographics" — all groups unlikely to have children. If the Town of Los Gatos were to require senior housing on the North Forty or to adopt other Specific Plan provisions to prevent or discourage households with children from moving to the North Forty, the record contains substantial evidence of "animus" against households with children. Incentives for Senior Housing. State and federal laws recognize that there is a need for senior housing and provide funding and incentives to encourage senior housing. For instance, State density bonus law permits all senior housing to receive a 20 percent density bonus whether or not it is affordable. (Gov't Code § 65915(b)(1)(C), (f)(3).) There does not appear to be a violation of fair housing laws if zoning incentives are provided for senior housing, in recognition of its unique characteristics: lower automobile use, less traffic, smaller household size (rarely more than two persons /household). Other incentives typically provided may be lower parking requirements and reduced traffic impact fees. A recent case recognized that there is a statewide priority to develop senior housing, and, when a developer proposed a senior project, the city's zoning of the site for higher density was not illegal spot zoning. (Foothill Communities Coalition v. County of Orange (2014) 222 Cal. App. 4th 1302.) However, if there is evidence that these incentives were adopted with the intent of excluding housing for families with children, the zoning may be found to be invalid. (Cf. Pacific Shores Properties LLC v. City of Newport Beach, 746 F.3d 936 (9th Cir. 2014; writ of certiorari denied, 135 S. Ct. 436 (2014)) (holding that facially neutral ordinance invalid where adopted with discriminatory intent). HUD's Fair Housing newsletter featured a case filed against the Village of Bronxville, N.Y. challenging a Village ordinance that requires developers to demonstrate that the design of residences is intended to appeal primarily to singles and to couples without children — a provision similar to the original provisions proposed in the Specific Plan.. (Westchester Residential Opportunities Inc. v. Village of Bronxville (S.D.N.Y. Case No. 15 CV 00280) (filed January 15, 2015). 1588 \03 \1565758.4 February 12, 2015 Page 5 Conclusion. Los Gatos cannot adopt Specific Plan provisions for the North Forty that exclude or discourage families with children, such as by requiring the development of senior housing or by zoning a portion of the site for senior housing only. While the Town can provide incentives for senior housing in view of its unique development characteristics, the incentives could be found to be invalid if they are adopted with the intent to exclude families with children. B. Selection of Buyers and Renters Based on Age The Town has asked if the Specific Plan could require developers to reserve some portion of the residences on the North Forty for seniors. Only housing that qualifies as a senior development under both state and federal law may discriminate based on age and familial status (42 USC § 3607(b)(1) -(3); Civ. Code § 51.2(a)). Developers cannot choose to reserve a portion of the units in a non - senior project for seniors, nor can local government require them to do so Both the federal Fair Housing Act and California's Unruh Act contain standards specifying whether a development qualifies as "housing for older persons" and may discriminate based on age and familial status. Reading the two Acts together, they allow the following types of senior housing: Housing provided under a state or federal program that HUD recognizes as intended for elderly persons (42 USC § 3607(b)(2)(A)); Civ. Code § 51.2(e)); • Housing with fewer than 35 units occupied solely by persons 62 years of age or older (42 USC § 3607(b)(2)(B); Civ. Code § 51.2); and • Housing with 35 units or more either occupied solely by persons 62 years of age or more; or occupied by households where at least one occupant is 55 years or older (42 USC § 3607(b)(2)(C); Civ. Code § 51.2 — 51.3). All new senior housing must include certain design features and have rules and covenants clearly restricting occupancy consistent with the federal and state occupancy requirements. Further, the policies, procedures, and marketing must demonstrate that the project as a whole is intended for seniors. (54 Fed. Reg. 3255 (Jan. 23, 1989).) Mixed - income developments are only possible if separate buildings are constructed for each income group. If a development is not designed as senior housing, the owner or manager cannot use age or familial status as a criterion in deciding whether to sell or rent a home. 1588 \03 \1565758.4 February 12, 2015 Page 6 Conclusion Requiring developers of non - senior housing to reserve a percentage of the units for seniors would violate state and federal housing laws. 1588 \03 \1565758.4