Those of us who've been supportive of City Attorney Mike Aguirre's efforts to shine light on what went down between the City Council and the city's retirement system administrators from 1996 to 2002-when city officials were busily digging the massive financial hole they're currently struggling to find a way out of-got a bit of a wake-up call last week.
Aguirre was dealt a setback when Superior Court Judge John Meyer ruled against the city and for the Building Industry Association, which had sued San Diego, claiming its 3-year-old affordable-housing ordinance, which requires builders to price 10 percent of their new homes below market rate or pay into an affordable-housing trust fund, was unconstitutional.
The two sides had been talking settlement since shortly after the BIA sued in 2003, but progress stalled as Aguirre replaced former City Attorney Casey Gwinn, Jerry Sanders replaced former Mayor Dick Murphy and all eyes were trained on the financial crisis. The settlement finally reached the City Council (for a second time) last month. It called for the BIA to drop the suit in exchange for the city allowing builders of numerous housing projects in the pipeline to, basically, pay a lower fee into the trust fund, and changing the time in the approval process at which the fee would be assessed, which would most likely have led to lowers fees for future projects.
The City Council voted to approve the settlement in concept, but the BIA a few days later asked the city to also agree not to alter the fee-raise it, eliminate it as an option or change the way it's assessed-for two years. In a closed meeting, the City Council reportedly said no, sending the matter to the courtroom and paving the way for Judge Meyer's decision.
Now that the dust has settled, some things have become clear:
Gwinn wrote a lousy law. He was the city attorney in 2003 when the ordinance was crafted. Judge Meyer declared the law unconstitutional simply because it didn't allow a builder to claim that there's no link between his project and the lack of affordable housing. In other words, there was no due process for a builder who might otherwise be able to argue that the law unfairly makes him remedy a problem he didn't help cause. Gwinn should have known better. The precedent Meyer cited, a similar law in Napa, withstood a challenge because it allowed builders a fair hearing. Napa fought back the BIA's challenge in 2001, before San Diego's law was written.
Knowing the grounds upon which the BIA was basing its suit, and mindful of how Napa beat back a similar suit, Aguirre should have asked the City Council to amend the ordinance a long time ago. All it required was a lower hurdle for builders to clear when requesting a waiver. That doesn't mean it'd be easier to get a waiver, just that it'd be easier to ask for one.
It's plain to see that this case suffered amid Aguirre's zealous focus on pension-related cases. It didn't benefit from having one attorney see it through. Sure, sometimes cases have to be handed from one attorney to another, but this one was passed around like a hot potato, and Aguirre himself ended up litigating it in court. He says the City Council can amend the law now, but the city may still have to forfeit the money developers paid into the trust fund.
The mayor's top political advisors were too eager to play ball with the BIA. The city was prepared to give away too much to the BIA. The housing trust fund was inadequate already; the proposed settlement would have drained even more money from it. Worse, the mayor's office apparently pressured city housing planners to can their objections to the settlement and instead recommend that the City Council support it. That's not how the process is supposed to work.
The BIA's reaction to Judge Meyer's ruling was a load of horseshit. In a written statement, the group claimed it had sued on behalf of 20,000 people who'd bought homes under the ordinance for prices inflated because the builders had to pass the increased cost on to them. The BIA indicated it would be seeking return of millions of dollars builders paid to the city so it could return the money to the homeowners. Yeah, right. The BIA also claims it has better ways to create affordable housing. Funny how none of the solutions involve developers. The BIA wants a faster, more profitable development process. Period. It doesn't give a damn about lower-cost housing.
Bottom line here is that Aguirre needs to make sure his focus on the pension cases isn't imperiling the other important work his office has to accomplish. At this rate, he had better produce a big win for the citizens of San Diego in the pension case, or he's going to end up with a legacy he's not going to be proud of.