California settles affordable housing lawsuit with Elk Grove. What did they agree to?

The California Department of Justice, Department of Housing and Community Development and the city of Elk Grove reached a settlement in a lawsuit by the state that had accused the city of unlawfully denying a low-income, affordable housing project in May 2023.

“You have a duty and obligation to follow the law of the state of California,” Attorney General Rob Bonta said during a news conference Wednesday. “We will remind you what it is, we hope you will comply when we point that out. But if you don’t, we will sue you. We will take you to court and you will comply one way or the other.”

Gov. Gavin Newsom, during Wednesday’s news conference, thanked Elk Grove for “eventually doing the right thing”.

“They eventually landed in the right spot and, ultimately, despite the denial, or rather the delay, we won’t ultimately be denied more units,” Newsom said. “Nimbyism has gotten in the way of progress and it has impacted the quality of life and the cost of living in the state of California.

“There’s no issue that impacts the state in more ways and more days than the issue of housing.”

As a part of the settlement, Elk Grove agreed to pay $150,000 to the state, identify an additional site for low-income housing and provide a copy of all the city’s future housing development applications that include affordable or supportive housing to the Department of Housing and Community Development. It must do that within 30 days of receiving an application for the next five years,

The city also agreed to provide monthly reports on the status of the proposed housing sites to the Department of Housing and Community Development during that same period.

Elk Grove had planned to develop a 66-unit, three-story affordable housing project in the city’s Old Town on Elk Grove Boulevard near Kent Road. Elk Grove’s City Council voted against the development of the project at that site following community backlash and offered to relocate it and find alternate sites.

The city had resolved a separate lawsuit earlier this year with the project developer, Excelerate Housing Group LLC, and borrower, Oak Rose Apts LP. It settled on relocating the project to a new site in Elk Grove in February. The new site, Coral Blossom Apartments, is expected to provide 80 one-bedroom units of affordable housing.

In a news release, the city of Elk Grove said the settlement underscores the city’s “continued commitment to the development of all forms of affordable housing and its focus on putting its resources towards its housing goals.”

“Elk Grove has provided $78 million in funding for affordable housing projects in Elk Grove, including transitional housing and permanent supportive housing,” a city news release said. “Elk Grove is proud of the role it has played as a leader in the development of affordable housing in the region. The city is hopeful that in the future the state will work more collaboratively with cities to partner in the development of affordable housing rather than use precious resources in the pursuit of unnecessary litigation.”