Marinwood lawsuit alleges ‘segregation’ in affordable housing plan

A community group has filed a lawsuit against Marin County to challenge a 100% affordable housing project at Marinwood Plaza.

The Marin County Community Development Agency ministerially approved the project on Dec. 6. It calls for four, three-story residential apartment buildings with 125 residences.

The residences will range in affordability from 30% to 70% of Marin’s area median income. The county’s housing element included the property among its preferred sites for development, specifying that it wanted to see 125 low-income residences built there.

The suit, filed by a group called the Marinwood Coalition Against Segregation, asserts that Marin County development code prohibits housing developers from making their projects 100% affordable.

The lawsuit states that the coalition “recognizes the urgency of California’s and Marin’s ongoing housing crisis and the public need to encourage construction of new housing, including inexpensive accessible housing.” But it says the project “violates the anti-segregation and anti-stigmatization provisions long enacted in the county development code.”

The suit focuses on two sections of the development code. One states that 20% of the “dwelling units or lots within a subdivision shall be developed as, or dedicated to, affordable housing.”

The other says that affordable dwellings must be “dispersed throughout projects and contain, on average, the same number of bedrooms as the market rate units in a residential development, and shall be compatible with the exterior design and use of the remaining units in appearance, materials, amenities, and finished quality.”

The suit also notes that the county’s housing element promises “ministerial review of projects that meet the requirement of the form-based code and include 20% lower income.”

The suit asserts that these “unambiguous affordable-housing requirements in the municipal code and in the countywide plan promote integration and avoid segregation and stigmatization of low-income residents through deployment of public resources into mixed-income housing that includes both market-rate and affordable-housing units.”

Marin County Counsel Brian Washington said his office “strongly” disagrees with the plaintiffs’ arguments.

“The county code provisions that they cite apply only to new market-rate housing developments, and provide minimum required levels of affordable housing for certain projects, not maximums,” he said.

Impact Residential Development and Pacific Housing Inc. are partnering to build the project.

“The suggestion that the county’s minimum 20% affordability requirement is somehow actually a maximum is meritless and strains the credulity of the plaintiffs,” said Riley Hurd, an attorney representing Impact Residential.

Hurd has notified James Nielsen, the attorney representing the plaintiffs, that under state law his client might be required to post a large bond as security for the county’s costs and damages.

State law requires a bond if an action is brought in bad faith for the purpose of delaying or thwarting a low- or moderate-income housing development, provided that posting the bond will not cause the plaintiff undue economic hardship.

“This lawsuit appears to meet the criteria for requiring a $500,000 bond because the purpose of the litigation is clearly to stop or delay the creation of affordable housing,” Hurd said. “Implying that this lawsuit has anything to do with stopping segregation is a total red herring.”

Senate Bill 393, which was signed into law by Gov. Gavin Newsom in September, shifted the burden of demonstrating economic hardship to the plaintiff.

That law was passed after Eden Housing was forced to return $68 million in low-income housing tax credits for an affordable housing project in Livermore because of delays caused by a lawsuit filed by Save Livermore Downtown, which alleged the city’s environmental study for the project was flawed.

The funding sources for the Marinwood project include nearly $30 million in federal low-income housing tax credits, a $31.3 million permanent mortgage and a $6.25 million allocation from Marin County’s housing trust fund.

“We are analyzing the SB 393 issue,” Washington said.

Nielsen said, “If a judge were to order a $500,000 bond, obviously the matter wouldn’t be able to proceed, because people can’t afford to pay that. So it’s a death knell if it’s granted, but I don’t necessarily think it applies here, because no one is attempting to delay or prevent a project.”

The suit asks the court to compel the county to comply with county code, which, based on the plaintiffs’ interpretation of the law, would require an 80% reduction in the number of affordable residences.

Alternatively, the suits asks the court to mandate that the project be “developed as mixed-income housing, with both affordable-housing dwelling units and market-rate dwelling units.”

Stephen Nestel, a Marinwood resident and longtime opponent of housing at Marinwood Plaza, said he “was unaware of the lawsuit but I agree with the general complaint that segregation of the community based on income is a bad idea.”

“I believe affordable housing should be integrated seamlessly into the community,” Nestel said. “This means distributing housing throughout the community instead of warehousing low-income housing in one big complex.”

Jenny Silva, who heads the board of the Marin Environmental Housing Collaborative, said, “Marinwood is a high-resource area. It is segregated. Putting affordable housing into high-resource areas is the intent and purpose of fair housing laws. A lawsuit to try and reduce the percentage of affordable units really runs contrary to those laws.”