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Posted

This story about California's somewhat recent approach to stem NIMBYs ability to stop, delay, or minimize new housing caught my eye. I'm uber-YIMBY and love seeing pirates like this guy force the issue. 

https://www.nytimes.com/2025/11/20/business/economy/california-housing-nimby.html?unlocked_article_code=1.2k8.UKcn.gZz-NTY2rYzq&smid=url-share

Spoiler

One way or the other, the answer was going to be yes.

When Leo Pustilnikov filed an application in 2023 with the City of Beverly Hills to build a 19-story apartment tower with a hotel, the developer didn’t care that it flouted the zoning code or that the City Council was unanimously opposed to the project or that neighbors had described it as a “monstrosity.” He had the city backed into a corner and wasn’t going to pretend otherwise.

“My philosophy is always this: If I can work with a city, I’m more than happy to,” Mr. Pustilnikov said. “When a city doesn’t want to help, I have no problem ignoring them and doing it my way.”

This was not the way business was normally done in Beverly Hills, a famously wealthy enclave where development is tightly controlled. It’s a tough place to build. Land is expensive, labor is expensive and NIMBYism — the not-in-my-backyard sentiment that exists everywhere — is particularly strong. The city’s zoning rules discourage projects that are tall and bulky and that might anger the owners of single-family houses nearby. Five stories is the tallest allowable height for a multifamily residential building — and those are permitted on only a few blocks of the city.

Mr. Pustilnikov was determined to change that. After two decades of investing in low-income apartments in downtown Los Angeles, he had stumbled upon a little-known state law that allowed him to ram high-density projects like the 19-story tower on South Linden Drive into cities that didn’t want them.

The law is called the “builder’s remedy,” and it was designed to break the political logjams that have made California one of the most difficult places in the country to build. The law works by nullifying local zoning rules when cities fail to plan for enough housing as required by the state.

While the builder’s remedy has been on the books since 1990, it was effectively dormant until 2022. Since then, however, developers across the state have filed dozens of plans to build 10- and 20-story buildings in neighborhoods where they had never been allowed. Mr. Pustilnikov, who helped pioneer the tactic, has proposed 10 such projects across Los Angeles County.

Brian Hanlon, chief executive of California YIMBY, a group that pushes for more housing, referred to the builder’s remedy as “the NIMBY sword of Damocles.” Just the threat of it has prompted cities to accept more housing than they had in decades.

California’s housing crisis is well documented and severe. But it’s not unique. From New York to Los Angeles, and countless smaller places in between, a festering housing shortage has forced Americans to spend more of their budgets on shelter, making them feel poorer and stuck in place.

There is wide agreement that America hasn’t been able to build enough housing; the need to do something about the shortage is one of the few things Democrats and Republicans seem to agree on. Despite this, the gap between the abstract agreement that we need more housing and the construction of a specific project on a specific block makes it difficult to build what the country requires.

Interest groups are reluctant to curb regulations, such as environmental rules, that can add years even to small projects. And the desire to keep a neighborhood from changing is deeply ingrained in local politics and the human psyche. There are just too many things to object to: Traffic. Not enough parking. Complaints that the building is poorly designed or blots out sunlight, or should be a park instead.

To address this, Sacramento legislators have spent the past decade writing a slew of laws that aim to create more housing. The laws vary from tiny coding changes that ease the way for backyard “granny flats” to a tectonic rewrite of the state’s landmark environmental law. The net effect is to nudge neighborhoods to become taller and denser by eroding local control over land use. Other states, including Oregon, Massachusetts, Montana, Texas and Arizona, have used similar tactics to increase the housing supply.

Buffy Wicks, a Democrat in the State Assembly from Oakland who has written several laws to speed housing production, argues that the state has to slice through both local rules and the bureaucracy that the state itself produced.

“We have gotten in our own way and created a quagmire that makes it impossible to build the housing we need,” she said.

The builder’s remedy has the potential to supercharge this, though it’s still too early to say how effective it will ultimately be. So far, developers seem to have the upper hand: When cities have challenged the cases, builders have often won. In response, cities have started reluctantly approving taller buildings that used to be unthinkable. In August, Mr. Pustilnikov prevailed in a case against Beverly Hills over the Linden Drive project.

“It is unfortunate that the state has seen fit to take a good deal of local zoning out of the hands of cities,” said Larry Wiener, the city attorney for Beverly Hills, in a statement.

The irony is that the builder’s remedy was rediscovered almost by accident. Even Ms. Wicks, one of California’s most staunchly pro-housing lawmakers, said the Legislature would never be able to pass the law now because of opposition from local governments. Thus, one of California’s most effective laws for building housing was not a product of its housing emergency or political will, but a legislative relic.

“The politics to pass anything resembling builder’s remedy would be way too difficult today,” Ms. Wicks said. “So one of the most powerful tools in combating our housing crisis is a law that passed” three decades ago.

Mr. Pustilnikov wasted no time trying to teach the city a lesson. After the judge ruled in his favor, he threatened to amend the Linden Drive building to make it even taller.

Building Where People Live
A truism of development is that it is harder to build things where people live than where they don’t. In the decades after World War II, California grew to become the most populous state not by constructing tall buildings but by spreading subdivisions over farms and orchards and connecting them with thousands of miles of freeways. Sun Belt cities like Dallas and Phoenix copied that playbook.

The backlash to sprawl came in the 1960s and ’70s, with local growth moratoriums and fights against freeways. As an alternative, environmentalists suggested building more densely in existing cities, what became known as smart growth.

But as much as people might lament paving over a cow pasture, nothing seems to rile them up as much as new construction in their own neighborhood. Over the past 30 years, California’s Legislature has been trying to counteract this hyperlocal opposition. The process has been a zigzagging slog. But the overall trend shows the state trying to wrest power from local governments. The laws the state created play out mostly out of public view through a web of arcane planning processes, the end result of which is a document called a “housing element.”

A housing element is basically a planning report that cities have to file with the state every eight years. In it, they detail, over hundreds of pages of maps and dense bureaucratese, how they plan to permit a certain amount of housing at various levels of affordability, a number that is decided by state and regional governments.

The problem is that the process has historically been a charade. Cities often produced housing elements that positioned future housing in inaccessible areas, and while developers and the state could challenge the plans, usually neither did. Since local officials were beholden to voters who rarely wanted new development, little was built.

Excavating the Builder’s Remedy
About a decade ago, the California Legislature started revving up its housing efforts again by sharpening the existing laws’ teeth. Among those changes were two tweaks that would prove pivotal: Urban areas would now have to plan for much more housing than they had in the past, and it became easier for developers to sue cities that deny their projects.

Those efforts got an unexpected boost on New Year’s Day 2019. That afternoon, Christopher Elmendorf, a law professor at the University of California, Davis, whose social media account is followed closely by developers and their lawyers, published a thread on Twitter. In it, he detailed a little-noticed clause that, in certain instances, could nullify a city’s zoning completely.

“CA housing folks: Why haven’t builders exploited the state law exempting 20%-affordable projects from zoning / plan in cities that don’t accommodate enough?” it began.

What he had suggested was the land use equivalent of plutonium.

Over more than a dozen tweets, Mr. Elmendorf argued that since 1990, California had had a loophole that allowed developers to bypass the local zoning codes in cities whose housing element was deemed noncompliant by the state. In a follow-up paper, he called it the “builder’s remedy,” a nod to a similar mechanism that arose from New Jersey court rulings that have shaped housing policy in that state.

The clause had rarely been used. But, as it happened, the conditions for exploiting it were historically perfect. Cities across the state were about to be hit with increases in housing target numbers so steep that regulators were all but guaranteed to deem their plans noncompliant.

Few cities saw a bigger impact than Beverly Hills: The city’s previous housing element required it to plan for three (yes, three) new housing units. Under the new allocation that would take effect in 2023, it had to plan for more than 3,000.

Beverly Hills did file a plan for more than 3,000 units, but placed most of them in high-traffic areas occupied by retail and office buildings, including the headquarters of the Academy of Motion Picture Arts and Sciences. Was a developer really going to turn the academy’s building into apartments and condos?

An advocacy group called Californians for Homeownership sued the city, arguing that much of the new housing that Beverly Hills had planned for would never be built. A judge agreed, and the city’s housing element was ruled out of compliance with state regulations.

Even so, many builders were reluctant to bring builder’s remedy cases, worried that those projects would alienate cities that they would likely have to work with in the future.

“Just like any other industry, sometimes you need a few pirates to change the dynamic,” said Dave Rand, a partner at Rand Paster & Nelson in Los Angeles, a land-use firm that represents Leo Pustilnikov.

Mr. Pustilnikov was willing to be that pirate.

Remaking Cities (and Suburbs)
On a recent afternoon I met Mr. Pustilnikov at a white-tablecloth Italian restaurant in Beverly Hills about a mile from his Linden Drive lot. Mr. Rand, his lawyer, had told me to look for the worst-dressed guy in the room. Sure enough, there I found Mr. Pustilnikov waiting for me in shorts, flip-flops and a T-shirt whose collar appeared to have just come out of a tug of war.

Munching bread while waiters wearing ties moved from table to table, Mr. Pustilnikov explained that his specialty were deals with “hair,” by which he means complicated transactions with a lot of risk. Until recently, his public profile came mostly from being the owner of several aging buildings in downtown Los Angeles that are set aside for low-income tenants, many of them exiting homelessness.

As for the builder’s remedy projects he had proposed in Beverly Hills, Santa Monica, West Hollywood and Redondo Beach, he told me that in most cases he didn’t plan to build them himself. Rather, his hope is to get the buildings entitled and sell the land to another builder for a premium. This would allow him to profit from engaging in the sort of pitched battle — in other words, hair — that a more conflict-averse developer might be reluctant to tackle.

Beverly Hills was a particularly enticing target. On paper it is an independent municipality of 32,000 people with its own school district and police department where boundaries are marked by the city’s iconic, shield-shaped signs. But it is surrounded by Los Angeles.

When Mr. Pustilnikov began pursuing the Linden tower, builder’s remedy projects had to set aside 20 percent of their units for below-market-rate tenants. (The percentage has since been lowered by new state legislation.) Paradoxically, building affordable units is more feasible in affluent areas like Beverly Hills because developers can charge much higher rents on the market-rate units.

Beverly Hills has since seen 16 applications for builder’s remedy developments. Residents are appalled. In letters opposing Linden Drive, neighbors said the project would destroy the neighborhood by encouraging other developers to “build huge” and made it feel as if “the walls are caving in, and we have no word.”

“None of us are opposed to affordable housing,” said Kenneth Goldman, president of the Southwest Beverly Hills Homeowners Association. But a building that was almost four times the city’s height limit?

“You don’t have to be a NIMBY to say that’s just so far out of line,” he said.

After Mr. Pustilnikov submitted the Linden Drive project, the City Council unanimously rejected his proposal.

The city was sued — twice, first by Californians for Homeownership and then by Mr. Pustilnikov. The suits were joined, and in August, Judge Curtis A. Kin — who, because this is Southern California, was once a contestant on the reality-TV show “Big Brother” — ruled for Mr. Pustilnikov. Beverly Hills still has a month to appeal the decision, but it would be expensive. To discourage cities from dragging out development fights in court, state law mandates that cities appealing their losses for this type of case post a bond that can easily eclipse $10 million.

The Linden Drive litigation is likely to be a bellwether, Mr. Rand said, prompting other cities to approve builder’s remedy projects outright or at least quickly cut deals with developers.

In the months since Mr. Pustilnikov’s court victory, the Beverly Hills Planning Commission has voted to approve nine builder’s remedy projects, totaling 659 units. That would be more housing than Beverly Hills had built in recent memory.

How to Create a Credible Threat
If California is ever going to dent its housing problem, it will have to figure out how to make it easier to add more housing in urban cores. Sprawl remains the cheapest and most effective way to add a lot of housing in a hurry, and there’s almost no way the nation can solve its housing shortage without building a lot more of it.

But in California and around the country, the highest rents and worst cost burdens are almost always in the job-rich areas that are already developed. Figuring out how to build housing in neighborhoods where building is expensive and difficult, and large blocs of voters reject it, is a puzzle that no U.S. city has fully solved.

Edward Glaeser, a Harvard economist, and Joseph Gyourko, a finance professor at the Wharton School, noted in a recent paper that many of the fast-growing Sun Belt cities — the ones to which people priced out of California tend to relocate — had seen a sharp run-up in housing costs. The reason, the authors concluded, is that their residents are no more enthusiastic about adding density in single-family neighborhoods than are the people of Berkeley or Beverly Hills.

To once again become the nation’s housing pioneer, California will have to develop the political will to reform its urban areas and old suburbs into something denser and easier to navigate without a car. The lesson of the builder’s remedy is that, so far, the most effective way of doing this is to create a credible threat that housing-averse cities can’t ignore.

Last year, the Legislature passed a bill, introduced by Ms. Wicks, that explicitly codified the builder’s remedy in a modified form: Developers could more easily avail themselves of the tactic in exchange for set limits on density. They cannot build anything they want, but the allowable densities are still several times as large as what local zoning rules allow.

The ultimate impact of the builder’s remedy is likely to be measured not just in units that are built by using it, but in the ones built in fear of it. A few years ago, when Santa Monica was working on its housing element, Jesse Zwick, who was running to be a member of the City Council, sat in frustration while his future colleagues voted for a plan that the state ultimately rejected for failing to provide enough units, he said.

Then developers, including Mr. Pustilnikov, came along, and the wealthy beachfront city was blanketed with housing proposals. The city ended up settling with builders, and the effect is likely to be felt long after.

“The fear of builder’s remedy brought along a lot of people whose inclination was to fight everything,” Mr. Zwick said. “They realized it was in our interest to grow and at least be able to have a say in how we do that.”

 

 

Posted

I read that this morning, thanks for sharing with the board.  

My favorite part:

14 minutes ago, Orale said:

None of us are opposed to affordable housing,” said Kenneth Goldman, president of the Southwest Beverly Hills Homeowners Association. But a building that was almost four times the city’s height limit?

“You don’t have to be a NIMBY to say that’s just so far out of line,” he said.

I can't tell you the number of times I've heard variations of that from neighborhood groups in testimony before the city and it deserves to be on Watson's staff's constituent bingo game.  

 

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