PENRYN, Calif. — Placer Citizens for Neighborhood Rights Inc. and USA Properties Fund Inc. have reached a settlement ending a contentious legal battle over the proposed Hope Way Apartments affordable housing development in Penryn, allowing a scaled-back version of the project to proceed while placing limits on future expansion.
Under the settlement agreement, USA Properties Fund can move forward with construction of 132 apartments at the 11.5-acre site located at 3130 Penryn Road near Interstate 80, but the company cannot pursue additional units for at least four years.
During that four-year period, USA Properties and Placer Citizens for Neighborhood Rights will engage in “good-faith discussions” regarding alternative uses for the remaining property, as well as possible roundabout modifications and other public safety improvements tied to the development.
If the parties fail to reach an agreement after that period, the settlement establishes conditions for any additional construction. USA Properties must either limit future development to 23 additional apartments, bringing the total to 155 units, abandon future development entirely, or complete a traffic study after the initial 132 apartments are constructed and leased before pursuing additional units.
According to the settlement terms, the traffic study would measure vehicle trips to and from the apartment complex and determine whether actual impacts align with estimates provided to Placer County during the project approval process. If traffic levels exceed projections by more than 15%, USA Properties would be required to implement mitigation measures outlined in the project application.
As part of the agreement, Placer Citizens for Neighborhood Rights agreed to support a future funding request by USA Properties to Placer County for the project’s first phase and to dismiss the lawsuit filed in Placer County Superior Court.
The dispute became one of the region’s most closely watched housing fights after opponents argued the original 240-unit project would dramatically alter the rural character of Penryn, increase traffic, strain schools and complicate wildfire evacuation efforts along Penryn Road, the area’s primary evacuation route.
The development also became a flashpoint in California’s broader political battle between local control and the state’s increasingly aggressive housing mandates under Gov. Gavin Newsom.
In October 2025, the Placer County Planning Commission rejected the proposed 240-unit project despite warnings from county attorneys that denial could violate state housing law and expose the county to litigation from state officials.
The California Department of Housing and Community Development later warned Placer County that rejecting the project without sufficient legal justification could violate state law.
The Placer County Board of Supervisors ultimately approved the project in a 3-2 vote, though supervisors rejected a proposed $10.8 million county loan for the development.
During the approval process, Supervisor Bonnie Gore said the county’s “arms were being twisted by the state” because of potential legal consequences tied to California housing mandates.
Following the county’s approval, Placer Citizens for Neighborhood Rights sued Placer County, alleging officials violated the California Environmental Quality Act by failing to adequately study wildfire evacuation safety and other environmental impacts.
Brian Myers, chairman of Placer Citizens for Neighborhood Rights, said the settlement created additional safeguards for the project.
“PCNR’s Board of Directors wishes to express appreciation to the USA Properties Fund negotiating team, who worked hard to reach this settlement,” Myers said in a statement. “Neither side walked away with all they sought, but PCNR believes we have established checks and balances on this development that would not have occurred without the vigorous community support of this lawsuit.”
Milo Terzich, vice president of development and entitlements for USA Properties Fund, said the agreement allows the project to move forward while addressing concerns raised by residents.
“The agreement provides benefits and protections for everyone involved, while allowing construction to start on much-needed housing for low-income residents,” Terzich said. “We will continue to work with PCNR regarding future development on the property.”
The Hope Way Apartments dispute drew statewide attention because it highlighted the growing tension between local resistance to development and California’s effort to force jurisdictions to approve more housing, particularly affordable housing projects.
The controversy also reflected broader changes in how California enforces housing law. Under Newsom, the California Department of Housing and Community Development has shifted from a largely administrative agency into a more aggressive enforcement body through initiatives such as the Housing Accountability Unit and collaboration with the Attorney General’s Housing Strike Force.
Despite the settlement, the Penryn debate illustrated the continuing political and cultural resistance surrounding housing growth in California, particularly in smaller suburban and rural communities facing state pressure to accommodate additional development.
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