ELK GROVE, October 12, 2022 – A partnership between affordable housing and homeless service providers, Oak Rose Apts LP, filed a lawsuit today against the City of Elk Grove for unlawfully rejecting a new, 67-unit affordable housing project designed to house formerly homeless households on what is now an empty lot in Old Town Elk Grove. The proposed Oak Rose Apartments project, a three-story building designed to provide permanent housing and supportive services for low-income households who have experienced homelessness, was rejected by the Elk Grove City Council in July — with city officials falsely claiming the project did not meet local “objective standards.”

The two housing providers who partnered on the project, Excelerate Housing Group, a newly established woman-owned company founded by an experienced affordable housing developer, and Hope Cooperative, a Sacramento-based nonprofit that provides homeless supportive services, filed a lawsuit with the Sacramento County Superior Court saying the city “unlawfully ignored” state laws that should have allowed the project to move forward and improperly denied requested approvals. Following the city’s decision, complaints were filed by housing advocates, including the Sacramento Housing Alliance, to the California Department of Housing and Community Development’s Housing Accountability Unit, which subsequently opened an investigation into the city’s actions.

“Like other cities in California, Elk Grove’s homeless population is rising, and the city does not have enough affordable homes with the necessary services to support those with the highest needs. Oak Rose Apartments is a solution to this problem,” said Dana Trujillo, CEO of Excelerate Housing Group. “Our goal is to create a beautiful apartment building in a nice neighborhood that offers Elk Grove’s most vulnerable residents a safe, comfortable, and affordable place to live and receive much-needed services. We are a private company that legally bought the land from another private party. We followed all the applicable laws and regulations in designing the project, and we have exhausted every avenue with the city to get them to approve the project. At this point, we have no choice but to ask for the court’s assistance to get this project the green light that it legally deserves.” 

Elk Grove’s unhoused population is between 100-150 people, according to city estimates, and due to the city’s severe shortage of affordable housing, Elk Grove is required to build more than 4,200 units of new housing for very-low and low-income households in the next eight years. Supportive housing like the Oak Rose Apartments provides long-term housing and services to previously unhoused residents. In the Sacramento region, these projects have a 95% success rate at keeping people housed, with an average length of tenancy of nine years. They are an important part of the solution to the county and state’s growing homelessness crisis. 

The lawsuit argues that the City of Elk Grove failed to follow a number of recent state laws intended to accelerate development of exactly this type of much-needed affordable housing. This includes SB 35 (Wiener, 2017), which created a “ministerial” approval process for 100% affordable housing; AB 1763 (Chiu, 2019), which allows 100% affordable housing to be built at higher densities and requires local agencies to reduce or eliminate zoning rules that restrict projects from building to their allowed number of units; and SB 330 (Skinner 2019), which limits local governments’ ability to deny affordable housing that complies with local rules.

By providing 100% affordable housing and supportive services, the Oak Rose Apartments followed all of these laws and qualified for a “by-right” approval process, which the city lacked any valid basis to deny. 

“We are mission-driven organizations that spend every day working to provide stable living environments for vulnerable Californians who need support and services,” said Erin Johansen, CEO of Hope Cooperative. “In this case, we feel compelled to act: It is not right that a city can just say ‘no’ to a project that will house our unhoused neighbors — even when this housing checks every legal box. Sometimes, you have to do the right thing for the community. This is one of those times.”

While numerous attempts were made by city officials to try to move the project to a different location — away from downtown — the only grounds the city relied on for rejecting the project was its inclusion of ground-floor residential units. The Excelerate and Hope Cooperative petition explains that these arguments are “legally baseless,” because the project was entitled to receive a mandatory waiver for its 19 ground-floor residential units under the state Density Bonus Law. The lawsuit also notes that the City of Elk Grove waived the standard this summer for a market-rate development subject to the same zoning restrictions several blocks away, allowing that project to include ground-floor residential units in 17 different buildings — even without a formal Density Bonus Law waiver request. 

The lawsuit also accuses the city of violating the federal Fair Housing Act, the state Fair Employment and Housing Act, and for discriminatory enforcement of the law, noting Elk Grove has refused to approve at least one other homeless supportive housing project in recent years “for the same bad faith reasons.”  

“Housing providers are stuck in this ongoing tug of war between state laws promoting affordable housing and local efforts to stop it, and we hope the courts can help us find a way to get this project unstuck,” said Excelerate’s Dana Trujillo. “There is an urgent need to build housing for homeless people living in Elk Grove, and that is the market we’re trying to serve. We have developed a project close to services and transit that can close that gap. We’ve followed the law every step of the way, and we believe the city should be required to let us build this housing and provide support to the Elk Grove residents who need it.” 

More information:

●      Excelerate Housing Group: Excelerate Housing Group is a real estate development company that creates new affordable housing communities. Excelerate aims to add value in neighborhoods that are in need of housing for low-income families, seniors, moderate income households, and people experiencing homelessness. Excelerate partners with local nonprofits who currently provide high-quality services to people in their communities but are in need of real estate development expertise and capacity building. Excelerate was founded to accelerate housing production in California and across the United States.

●      Hope Cooperative: For over 40 years, Hope Cooperative has effectively and compassionately provided mental health and supportive housing services for persons struggling with a variety of health and housing challenges in and around Sacramento County. Hope Cooperative’s staff of 276 employees across Sacramento County provides housing and other services to over 8,000 individuals in need every year with a proven track record of service, which includes successfully putting formerly unhoused persons into high quality, permanent new homes.