When San Mateo County supervisors agreed in September to buy a Millbrae motel to convert to homeless housing, neighbors were furious that the county had pushed through the plan over their safety concerns.
Now Millbrae is suing to halt the project, alleging the county’s $33 million purchase of the La Quinta Inn violated a 73-year-old amendment to the state constitution that requires local governments to get voter approval before developing, buying, building or funding “low rent housing.”
The amendment, the result of a successful 1950 ballot initiative spearheaded by the state’s real estate industry, drummed up fears about public housing and neighborhood integration to rally support for the measure. Housing advocates have condemned Article 34 for its racist origins and will ask voters to repeal next year.
Although cities have found some ways around the law, experts and advocates say it’s responsible for halting thousands of affordable homes and creating costly hurdles for nonprofit developers that rely on public funding.
Millbrae officials, while acknowledging that the legal strategy could be controversial, maintain residents should have their say over the project.
“I want to be clear: the City’s concern is not housing,” Mayor Ann Schneider said in a statement. The main worry is the economic impact, Schneider said, including the potential loss of around $600,000 in annual hospitality tax revenue if the motel’s use changes, which the city bordering the San Francisco International Airport relies on to fund services.
San Mateo County officials are not convinced by that argument.
“Basically the city is on record — they are against seniors and families and are saying ‘anywhere but Millbrae,’ ” Warren Slocum, vice president of the board of supervisors, said in a statement.
It’s at least the second time a wealthy Bay Area suburb has invoked Article 34 to stop a homeless housing project. A lawsuit filed by neighbors last year failed to stop a supportive housing facility planned for Larkspur in Marin County.
Housing advocates and experts said recent updates to state law tweaking the definition of “low rent housing” should exempt many homeless housing sites from a public vote. In the Marin County case, the state justice department made the same argument in an amicus brief, which allows an outside party to show its legal interest.
Even so, advocates said Millbrae’s move underscores the need to strike the amendment from the books. Such a legal maneuver is “a dirty tactic for any jurisdiction that purports to support the right of low-income and other abled people to live locally,” Matt Schwartz, president of the California Housing Partnership, which advocates for nonprofit developers, said in an email.
Schneider in a phone interview rejected the notion raised by some advocates that Millbrae is trying to use a racist law to keep people out, noting Asians are the largest ethnic group in the city. “To use the racist card is to try and make us look like bad guys,” she said.
To get affordable housing built under the amendment, courts have allowed cities to ask voters to approve an overall number of future housing units rather than seeking permission for each individual project. Last year, Oakland voters passed a ballot measure allowing the city to help create 13,000 affordable homes, and a successful measure in Berkeley cleared the way for 3,000 subsidized units.
Another workaround: Privately owned projects with no more than 49% low-income units can go through without a public vote. Many cities require market-rate developers to include a percentage of affordable units in their projects or pay a fee.
Article 34 was approved by voters shortly after the enactment of the federal Housing Act of 1949 banning racial segregation in public housing — a provision that set many White communities on edge.
Residents in the Northern California coastal city of Eureka created the amendment campaign to stop the local housing authority from using federal money to develop public housing. They partnered with the California Real Estate Association, pitching the amendment as essential to protecting tax revenue and preserving White neighborhoods.
But today, the California Association of Realtors, the successor organization to the California Real Estate Association, is working with housing advocates to repeal the law through a November 2024 ballot measure. The goal is to convince voters that the amendment is a relic of the state’s history of discriminatory housing practices and that it continues to impede new affordable housing.
“As an organization that deeply values inclusion, we can’t change the actions of the past, but we are taking bold action now to help build a more equitable and just future,” Otto Catrina, former president of the realtors association, said in a statement last year.
There doesn’t appear to be organized opposition to the repeal campaign, but some local taxpayer groups have argued that allowing cities to use public money for housing inevitably leads to misuse and waste.
Still, winning over voters likely won’t be an easy task. Three past efforts to repeal or weaken Article 34 all failed — the last attempt was in 1993 — a fact Millbrae officials highlighted in a news release.
Millbrae says it was caught off guard by the county’s plans for the 75-unit permanent supportive housing facility at 1390 El Camino Real. The city worries that if it loses the case, it could be forced to automatically accept the project.
The main reason is that projects receiving money from California’s Homekey homeless program are guaranteed streamlined local approval. The county is still waiting to hear back from the state about the project’s grant application to Homekey, which already has helped fund around three dozen homeless housing sites and shelters across the Bay Area.
Despite its opposition to the project, Schneider said Millbrae is committed to adding housing, pointing to the more than 1,200 units built in the city in recent years, 143 of which are affordable.
“Millbrae is proud of our housing record,” she said, “but we must balance this commitment with our duty to be strong fiscal stewards of taxpayer resources and our oath to uphold the state constitution.”