Key points:
- Critics claim California’s housing laws are failing, citing delays and lawsuits.
- Los Gatos case shows state laws are working to force housing forward despite local resistance.
- The outcome of the Los Gatos case will set a precedent for housing projects statewide.
Critics of California’s state housing laws want you to believe they are failing. They point to delays, lawsuits, and resistance at the local level as proof that Sacramento’s big promises of reform aren’t translating into homes on the ground. But the case now unfolding in Los Gatos tells a different story. It shows that the state’s laws are not only working as intended to force housing forward, but also that every major project is destined to become a courtroom battle.
The Town of Los Gatos failed to adopt a legally compliant housing element on time, leaving itself vulnerable to one of the most controversial and consequential tools in state law: the “builder’s remedy.” That provision of the Housing Accountability Act, strengthened in recent years, allows qualifying projects to bypass local zoning restrictions entirely if a jurisdiction falls out of compliance. In other words, once Los Gatos missed its deadline, developers had a rare chance to propose housing on terms dictated not by the town’s restrictive zoning code but by the minimum standards of state law.
Two developers—Arya Properties and Los Gatos Boulevard Properties—took that chance. They filed preliminary applications for builder’s remedy projects, locking in their rights under the Housing Accountability Act. Normally, the town would have been legally required to process those applications and, unless very narrow exceptions applied, approve them.
Instead, Los Gatos tried a different maneuver. The town declared that the applications had “expired,” refused to process them, and then went on offense by suing the applicants for declaratory relief. This tactic, rather than following the law’s straightforward process, forced months of delay and pushed what should have been an administrative step into the courtroom.
Housing advocates argue that this is not an isolated story. In an amicus brief filed in Santa Clara County Superior Court, YIMBY Law, the California Housing Defense Fund, and Californians for Homeownership described the Los Gatos litigation as “a story of state housing law working as intended to produce new housing while a resentful Town tries to gum up the process.”
The organizations warned that if Los Gatos’ interpretation of the Permit Streamlining Act is allowed to stand, anti-housing jurisdictions across California will take it as license to block projects through technicalities and questionable legal theories.
The dispute might sound arcane—about deadlines, completeness determinations, and vesting rights—but the stakes could not be higher. At its core, this case is about whether local governments can invent new procedural hurdles to slow-roll or sabotage housing projects they don’t like.
Los Gatos claims it was simply following the law. Housing advocates counter that the town concocted a novel reading of the Permit Streamlining Act to manufacture an excuse for inaction. Instead of denying the projects outright, which would have clearly violated the Housing Accountability Act and exposed the town to penalties, Los Gatos framed the applications as dead on arrival.
The court filings detail how this strategy unfolded. By declaring the applications expired, the town argued it had no obligation to process them.
By suing the developers first, it put the case in a posture where the developers had to defend their projects, rather than the town defending a denial. And by refusing to hold public hearings or allow administrative appeals, Los Gatos effectively cut housing advocates out of the process altogether.
Even if the town ultimately loses in court, it will have succeeded in wasting months of the developers’ time, burning resources, and sending a clear message to anyone who dares file a builder’s remedy project in its jurisdiction: prepare for war.
This is the paradox of California housing law in 2025. On paper, the state has some of the strongest pro-housing statutes in the country.
The Housing Accountability Act, the Housing Crisis Act (SB 330), and the builder’s remedy all impose real consequences on cities that try to block compliant projects. Local governments that lose Housing Accountability Act lawsuits can be ordered to approve projects, pay heavy fines, and cover the developer’s attorney’s fees.
The law is explicit: courts must give “the fullest possible weight” to the approval of housing. And yet, despite all of these protections, towns like Los Gatos continue to resist. They no longer have the power to say “no” directly, so they look for procedural end-runs.
The Los Gatos lawsuit illustrates this shift. The town could not lawfully deny the projects, so it tried to redefine the rules around when applications vest. This, housing advocates argue, is part of a new trend.
Across the state, they have identified at least nine similar lawsuits where local governments are attempting to revoke vested rights or reject preliminary applications based on shaky interpretations of the Permit Streamlining Act.
YIMBY Law itself has sued Cupertino over similar tactics. If Los Gatos wins, it will set a precedent that emboldens other jurisdictions to adopt the same playbook. Every builder’s remedy project could then face not just political opposition but months or years of litigation over whether an application is “complete” or “expired.”
For those who say California’s housing laws are toothless, Los Gatos offers a different picture. The town’s refusal to process applications was not an act of confidence but of desperation. Local officials know that outright denial would almost certainly trigger an easy win for developers under the Housing Accountability Act.
They know the penalties are steep, the case law is against them, and the Legislature has steadily narrowed their discretion. So they resort to procedural gambits, hoping at best to win a favorable ruling, and at worst to delay projects long enough to discourage developers or wear them down financially.
This is what it looks like for state housing law to work. Not perfectly, and certainly not smoothly, but in ways that force local governments into increasingly defensive positions.
Twenty years ago, a town like Los Gatos could have denied these projects with little fear of consequence. Developers would have been left with a costly, uphill legal battle.
Today, the town has to invent a convoluted strategy, file preemptive lawsuits, and hope a judge buys its interpretation. That is not failure—it is progress.
At the same time, it would be naïve to see this as a complete victory. As the Los Gatos case demonstrates, the fight is far from over.
The result of this lawsuit will ripple across California, affecting projects in Cupertino, Beverly Hills, and beyond. If the court sides with Los Gatos, anti-housing cities will gain a powerful new tool to delay or derail projects.
If it sides with the developers, it will shut down one more avenue of resistance and reaffirm the Legislature’s intent: that housing projects should move forward unless there are clear, lawful reasons to deny them.
The larger lesson is that state housing law has fundamentally changed the terms of battle. The old weapons of zoning denials and endless environmental review have been blunted.
The new fight is over technicalities—application timelines, completeness standards, vesting rules. These fights may seem dry, but they are where the future of California housing is being decided.
Every project, especially those filed under the builder’s remedy, will likely face a gauntlet of legal challenges. Every victory will require not just filing applications but winning lawsuits.
That is both the promise and the challenge of California’s housing reforms. They are strong enough to keep projects alive against determined local opposition. But they are not yet strong enough to prevent opposition from dragging out the process.
The Los Gatos case shows that we are past the era when cities could quietly kill housing projects in back rooms. Now they must fight in open court, where the law is increasingly stacked against them.
But it also shows that housing advocates, developers, and the state must be prepared for every project to be a battlefield.
California’s housing crisis is too severe for half measures. The Legislature has made clear that local governments cannot stand in the way of projects that meet the law. The courts have backed that interpretation time and again. Los Gatos’ lawsuit is, at best, a stalling tactic.
At worst, it is an attempt to rewrite the law in a way that could set the state back years. The outcome will matter far beyond one town in Silicon Valley. It will signal whether California is serious about turning its housing laws from words on paper into homes on the ground.
The critics who claim the state’s housing laws are failing are missing the point. The Los Gatos case proves that those laws are powerful enough to put local governments on the defensive. The very fact that towns must resort to legal gymnastics is evidence of their effectiveness.
But it also proves something else: that the fight for housing is not over, and may never be. In California, every home is now hard-won—not just at the planning commission, but in the courtroom.
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In reading the article, it doesn’t sound like California’s housing laws are “working”.
Also, Los Gatos (like almost every other city) is not on track to meet its housing “mandates”.
https://cities.fairhousingelements.org/
But truth be told – the only permanent way to eliminate state interference is for some group like “Our Neighborhood Voices” to gather enough signatures to place a measure on statewide ballots, as occurred with Proposition 13 (which is exactly what Our Neighborhood Voices” is attempting). But cities and their residents have apparently not “suffered enough” yet for that to take off just yet. But the more that the state and its YIMBY allies push this, the greater chance of such an effort succeeding. (At which point, “none” of the state’s mandates would exist.)
Cities (and their residents) also have to band together via that type of initiative. Individual cities are not powerful-enough to fight the state on their own (though they can come up with tactics such as the ones described in the article above). Of course, Davis itself is essentially run by YIMBY types in the first place, so they’re certainly not even looking into such tactics. Were it not for Measure J, you can be sure that Davis would be a very, very different and larger city.
Hopefully, Bonta’s threats and actions will help doom his pursuit of the governorship.
“Hopefully, Bonta’s threats and actions will help doom his pursuit of the governorship.”
I think the heavy handed approach of CA state democrat politicians is eventually going to lead the state to vote GOP. We can hope anyway…
I can see a path toward a moderate Republican – the state has elected those types, before.
The Democratic party has changed – just ask Bill Maher. They are on the losing side of several issues, these days.
Ron O
Somehow you start by stating that the new housing laws aren’t working, but then express a desire to curtail state interference in local housing decisions, which indicates that you acknowledge state laws are working. Why bother opposing state laws if they aren’t effective?
Overly restrictive local control is why we have the housing cost crisis. And clearly the new state housing laws are pushing localities to change their policies. Most laws are not perfectly written and require eventual clarifications from the courts. That’s what is happening in Los Gatos.
Overall, the laws aren’t working – YIMBY’s own website (already provided a link in my comment) shows that they’re not working.
David recently ran an article which shows that statewide housing construction is at its lowest level in years.
So yes, there are isolated examples, but the larger push is not working. And the reason it’s not working is because it’s not viable, nor is it supported by the cities that the politicians are supposed to be representing.
I was too young to pay attention back in the day, but this sounds like a situation that’s very similar to the factors leading to Proposition 13. (In other words, politicians working against what the public wants.)
So ultimately, the more “success” that the state forces upon unwilling cities, the greater the chance that it will awaken a sleeping tiger, so to speak. (It’s already occurring, but hasn’t reached a peak due to the overall failure of the mandates so far.)
Interestingly-enough, there was a time when cities themselves (local officials) were the “problem” regarding sprawl. (Many of them still are. Davis would likely still be one of them, without Measure J.)
Separate issue between approvals and actual construction (construction is an economic issue, approval is a regulatory issue). One of the points made by YIMBY here is that they have a lot more tools than they used. It used to be that the project in Los Gatos could have been killed, now it likely won’t.
I was reading some comments from Los Gatos residents who live close to these proposed projects. They aren’t very happy, citing the height and density of the projects with some residents saying it was too close and would be overlooking their backyards.
There’s a word for that…
Well, they are almost literally getting something built in their backyards.
I don’t think any homeowner would want that. Would you?
How about if the homeowner’s were black David? Would that affect your opinion?
This is why we have a housing crisis and the people who get harmed the most from this are those most vulnerable.
Concerns from Los Gatos homeowners regarding new construction being too high and close to their backyards center on specific projects and the use of the state’s “builder’s remedy” provision. This provision can override local zoning rules, including those for height and setback, for housing projects in cities that fail to meet state-mandated housing goals.
Benedict Lane project
Residents on Benedict Lane have voiced specific objections to a proposed housing development by Green Valley Corporation.
Concerns: The development, filed under the builder’s remedy provision (Senate Bill 330), raises worries about building height and proximity to existing properties.
Impact: Homeowners fear the new building would loom over backyards, cause noise, and eliminate privacy.
At the end of the day, what the state has done is change the laws in such a way that the neighbors will not win this legal fight.
Right because the neighbors get ______!
There’s a word for that…
They won’t. But this is why we have the housing crisis – it’s because of unreasonable fear.
Let’s take an example – Sterling Apartments in Davis. There was a lot of fear by the neighbors. They worked it out, they built the project, I asked some folks there if it was a problem or if they even notice it at all and most of the people acknowledged, that there is no problem and most of the people who complained during the approval process can’t see it, and don’t notice it.
But fear dominates the landscape, it’s why there is no housing now at University Mall. So now they are going to have to put housing somewhere else instead – so it impacts someone else. There are a lot of problems here and in the end it’s why we are where we are.
David says: “This is why we have a housing crisis and the people who get harmed the most from this are those most vulnerable.”
I know you think that, but it isn’t true.
I wouldn’t even attempt to live in Los Gatos, nor would it be a good idea for someone in my position to try it.
Again, many of the people in this area “saw the writing on the wall” in regard to the Bay Area cities that they were essentially pushed out of.
Regarding Sterling, the services that the former facility provided are a loss (of the type that you normally would be concerned about). Not to mention the sheer waste of destroying perfectly-good, relatively new buildings. (Which one way or another, were probably paid for via tax dollars.)
It’s student housing, miles from campus. If I’m not mistaken, it also includes parking (that you’d normally prefer to eliminate).