The harmful development Los Gatos is currently experiencing stems from a failure of leadership. Former Mayor Ristow and council members Moore and Rennie controlled the legislative agenda throughout 2023, failing to adopt a state-compliant Housing Element by the statutory deadline of January 31, 2023. This failure triggered the Builder’s Remedy (California Government Code Section 65589.5), which remained in effect until June 4, 2024, when a compliant Housing Element was finally adopted—16 months late.
Senate Bill 330 (SB 330), the Housing Crisis Act of 2019, aims to address California’s housing shortage by stabilizing zoning rules and streamlining housing approvals. It prohibits local governments from adopting policies that reduce housing capacity and limits public hearings and decision timelines. However, SB 330 does not change zoning or allow municipalities to build at higher densities. The Builder’s Remedy, tied to the Housing Accountability Act, allows developers to bypass local zoning laws if at least 20% of the units are affordable to lower-income households or 100% are affordable to moderate-income households. This provision applies when a municipality fails to adopt a compliant Housing Element, as happened in Los Gatos.
During the 5th RHNA cycle (2015–2023), Los Gatos achieved 110% of its allocation, adding 683 new units to its housing stock. However, the town fell short on affordable housing, delivering only 17% (52 units) of the 313 affordable units required, while exceeding market-rate housing targets by 206%. This imbalance was driven by developers’ choices, not by a “slow growth approach.” For the 6th RHNA cycle (2023–2031), the town must add 1,993 new units, 43% of which must be affordable. However, the Builder’s Remedy incentivizes developers to meet only the 20% affordability threshold, undermining the town’s RHNA targets.
A prime example is the Arya Properties project on the Ace Hardware site. This 1.9-acre parcel is slated for an eight-story, 116-foot-tall building with 175 units—92 units per acre, far exceeding the town’s 40-unit-per-acre limit. Of these, 20% (35 units) will be affordable, primarily small studio and one-bedroom units, while the remaining 140 market-rate units will include larger, more profitable layouts. The Housing Element had originally programmed the site for 48 units, with 58% affordable. The project replaces the planned 28 affordable units with just seven additional affordable units, while adding 120 market-rate units, yielding approximately $200 million in incremental revenue for the developer. This highlights the financial incentives driving the misuse of the Builder’s Remedy.
The town’s failure to meet the statutory Housing Element deadline opened the door for developers to exploit the Builder’s Remedy, prioritizing profits over affordability and eroding the town’s charm. Arya Properties, through its attorneys, stated that it would not seek consistency with the General Plan or zoning ordinances, underscoring its disregard for community character. The council’s failure to adopt a compliant Housing Element in time directly enabled this harmful development.
Ristow, Moore, and Rennie squandered time on non-essential updates to the Land Use Element instead of focusing on the Housing Element, which led to six drafts and a prolonged 16-month delay. During this period, the town received multiple Builder’s Remedy applications, including the Arya project. Their poor judgment and arrogance, including a baseless resolution claiming substantial compliance with state law, placed Los Gatos in a precarious position.
The Builder’s Remedy undermines the town’s ability to meet its 43% affordability target for RHNA and paves the way for high-density, out-of-character developments like the Arya project. This crisis is a direct consequence of failed leadership, and those responsible must be held accountable for the long-term harm inflicted on Los Gatos.
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