A new lawsuit seeks to prevent San Diego from using developer money generated in affluent neighborhoods to build libraries, fire stations and other infrastructure in low-income areas.
In the lawsuit, the Livable San Diego residents group, which opposes high-density housing, says a new city policy that would shift developer money to low-income and historically underserved areas is unconstitutional and violates state law.
The policy ends the city’s decades-long practice of keeping developer fees in 44 separate pots of money and requiring the money to be spent in the specific neighborhood where it was collected. Instead, the city will pool the money and spend it in the neighborhoods that need it most.
The criticisms in the lawsuit echo complaints from many residents before the city council passed the new policy, called Build Better SD, in September.
Critics say the policy change is unfair to neighborhoods where many new high- and mid-rise buildings are being built or will be built in the coming years because those areas are no longer guaranteed money to support infrastructure.
Under the old policy, these communities were guaranteed developer funds for libraries and fire stations to support new growth. Under the new policy, these communities must hope that city officials decide their neighborhoods are a priority.
“There is no connection between the payment of developer fees and the public impact of the proposed development,” the lawsuit states. “A development may need to pay developer fees associated with a project that may be 40 miles away from where the improvements paid by the developer fees are located.”
The suit takes 40 miles because some of San Diego’s boroughs are so far apart, like Rancho Bernardo and San Ysidro or Carmel Valley and Otay Mesa.
Plaintiffs want the court to prevent city officials from enforcing the new policy.
The legal battle comes just before the City Council is scheduled to approve a new formula next month to prioritize which areas will receive developer money under the new policy.
“We want to reverse this plan because it is harmful in a number of ways,” said Tom Mullaney, chief executive officer of Livable San Diego. “It violates California law and the US Constitution.”
The lawsuit does not specify which articles of the Constitution the plan allegedly violates.
San Diego officials say critics oversimplify how the new policy will work, stressing that it prioritizes historically underserved neighborhoods.
City planning director Heidi Vonblum told the council last month that the new policy also prioritizes areas with the largest populations and recent growth.
She also prioritizes projects with environmental benefits and those that sit where other infrastructure is crumbling, she said.
Mayor Todd Gloria, who spearheaded the new policy, commended the council for approving it.
“For the past 40 years, we’ve used developer fees to only pay for specifically listed infrastructure in the communities where the fees were generated,” he said. “It used to make sense – but not anymore. Now this system only perpetuates historic injustices and leaves millions of much-needed infrastructure dollars lying around unused.”
Mullaney said the new policy would create injustice in trying to resolve it.
“The city tried to sidestep the injustice by saying, ‘We’re one big happy family and everyone uses everything around the city,'” he said. “The city is trying something to see if it will hold up and it won’t hold up.”
Already, Los Angeles, San Francisco, and San Jose collect most of their infrastructure developer fees on a city-wide basis, not by specific neighborhoods.
The lawsuit argues that such policies violate the state’s Mitigation Fees Act, which states that fees charged to support development must be consistent with the impact the development will have.
Plaintiffs argue that the city “cannot show a reasonable relationship between the use of developer impact fees, the nature of the development, and the need for the public because money can be spent so far removed from the project that that causes the effects facility.”
The lawsuit says the new policy also violates state environmental law because the policy changes how the city will mitigate the environmental impacts of projects.
A spokeswoman for City Attorney Mara Elliott declined to comment Wednesday except to say her office will investigate the complaint.
See sandiego.gov/buildbettersd for details on city guidelines