Oak Rose Apartments — Old Town Elk Grove

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Excelerate Housing Group files an application under SB 35 for a 67-unit supportive housing project at 9252 Elk Grove Boulevard in Old Town Elk Grove. SB 35 requires streamlined nondiscretionary approval for qualifying affordable housing that meets objective zoning and design standards. A subsidiary of Excelerate submitted a preliminary application on Nov. 21, 2021 and the formal SB 35 application on March 4, 2022. City staff recommended that the Planning Commission deny SB 35 streamlining. The project is the first in Elk Grove to provide permanent housing and support services for formerly homeless residents.

The Planning Commission approves Railroad Courtyards, a market-rate project at 9676 Railroad Street in the same Old Town planning area. The state later cites it as an example of the city allowing ground-floor residential uses that it denied to Oak Rose.

On staff's recommendation, the commission denies the application in Resolution No. 2022-19. The developer appeals to the City Council.

The Elk Grove City Council votes to deny the Oak Rose Apartments application. Stated reasons: density is too high, and the project's ground-floor residential units do not comply with Old Town zoning requiring ground-floor commercial uses. The state will later document that Elk Grove had recently approved a market-rate project in the SAME historic district that ALSO included ground-floor residential — without citing the same standard. The selective application constitutes the core fair housing violation finding. The council acted on July 27, 2022, upholding the Planning Commission's June 2, 2022 denial.

The California Department of Housing and Community Development issues a Notice of Violation to Elk Grove, warning that its denial of the Oak Rose Apartments violated state housing law — specifically SB 35 and the Housing Accountability Act. HCD notes the city applied standards to the affordable project that were not applied to comparable market-rate development.

California Attorney General Rob Bonta sends a letter to Elk Grove urging the city to reconsider its unlawful denial of the Oak Rose Apartments or face legal consequences. The city does not act.

California Attorney General Rob Bonta, Governor Newsom, and HCD file suit against Elk Grove for violating: (1) SB 35; (2) the Housing Accountability Act; (3) the Nondiscrimination in Land Use Law; (4) the Affirmatively Furthering Fair Housing statute. The petition is filed in Sacramento County Superior Court. Excelerate Housing Group files its own suit. Elk Grove votes in May 2023 to fight the AG's legal action.

The Elk Grove City Council holds a reconsideration hearing for the Oak Rose project. City staff recommends approval, citing the risks of continued litigation. The developer does not attend the meeting. After hours of public comment, the council postpones the vote and directs staff to find an alternate site. State continues its lawsuit: "California is full speed ahead with lawsuit against Elk Grove after postponed housing vote."

The Elk Grove City Council holds a second reconsideration hearing for the Oak Rose project. Excelerate Housing Group again does not attend, citing ongoing good-faith negotiations. The council postpones again. Negotiations between the city and developer continue in the background.

Elk Grove and Excelerate Housing Group announce a settlement. The Oak Rose project is relocated from 9252 Elk Grove Boulevard (Old Town Historic District, high-resource area) to 8484 Elk Grove-Florin Road (commercial arterial, lower-resource area). The city: transfers the Elk Grove-Florin Road property to Excelerate; provides a $5 million grant to the project; purchases the Elk Grove Boulevard site. In the event the city later denies the new location, it must pay Excelerate $2.2 million. The state lawsuit remains pending.

California Governor Newsom, AG Bonta, HCD, and BCSH announce a settlement with Elk Grove resolving the state lawsuit. Terms: (1) Elk Grove pays $150,000 in state attorneys' fees; (2) undergoes reporting requirements for future compliance monitoring; (3) must identify and rezone a site for lower-income housing in a highest resource area by July 1, 2025. Governor Newsom calls the city's decision "especially shameful."

"After months of negotiations with the City of Elk Grove, we are grateful to have reached a compromise that allows us to move forward with developing affordable housing for those experiencing homelessness in the City. The 8484 Elk Grove-Florin Road site allows us to increase the size and number of units in the project and provide additional amenities to future residents." (Dana Trujillo, February 2024 settlement)

Issued Notice of Violation October 12, 2022. Joined the state lawsuit. HCD Director Gustavo Velasquez at settlement: "We are resolute to see that every community in our state affirmatively furthers fair housing and expands integrative communities of opportunities." Under the settlement, HCD monitors Elk Grove's future compliance.

At the September 2024 settlement: "This is a victory in the state's efforts to expand the availability of much needed supportive housing."

Called the city's decision to block the project "especially shameful" and said "Elk Grove is not immune to this challenge" (Sept. 4, 2024).

"This settlement reflects what I've said all along: California's housing laws are not optional." (Settlement announcement, Sept. 4, 2024.) The denial violated SB 35, HAA, the Nondiscrimination in Land Use Law, and AFFH by applying an objective standard to affordable housing that was not applied to market-rate housing.

Denied July 2022: density too high; ground-floor residential units violated Old Town zoning. Had previously approved market-rate project in same district with same ground-floor residential configuration without invoking the same standard. Voted May 2023 to fight the AG lawsuit. Postponed reconsideration twice in fall 2023 despite staff recommending approval. After settlement: "This settlement underscores our dedication to fostering a partnership." (Mayor Singh-Allen, February 2024)

Welcoming formerly homeless neighbors could "cause an unsafe environment." Concerns about density, neighborhood character, and the specific resident population. These statements were made publicly at council hearings and documented in press coverage. The state's AFFH argument was strengthened by the nature of these objections — focused on WHO would live in the building rather than its objective physical characteristics.

The Elk Grove City Council denied the developer's appeal on July 27, 2022, relying on the Old Town rule reserving ground floors for commercial uses. This constituted violations of: (1) SB 35 — the project qualified for streamlined approval; (2) the Housing Accountability Act — the denial was not based on a legitimate objective standard because the same standard had not been applied to a market-rate project in the same district; (3) the Nondiscrimination in Land Use Law and AFFH — applying different standards to supportive housing for homeless residents than to market-rate housing is discriminatory. This is the only case in the database where the primary mechanism is discriminatory application of objective zoning standards based on the characteristics of future residents rather than the merits of the building. Some residents explicitly stated concerns about the type of future residents during public comment, which strengthened the AFFH violation finding.

Best local source. Explains the dual-lawsuit structure (developer + state), the ground-floor zoning argument, and how a comparable market-rate project was approved without the same standard.

HCD settlement announcement. Contains HCD Director Velasquez's quote about AFFH compliance.

Governor Newsom's press release. Contains his "especially shameful" quote. Confirms the political significance of the case.

Best single source for the settlement. Contains all three of the state's legal theories (SB 35, HAA, AFFH), the $150K payment, monitoring requirements, and the highest-resource-area rezone requirement.

Coverage of the February 2024 developer settlement. Contains Dana Trujillo quote, Bobbie Singh-Allen statement, and description of terms (land transfer, $5M grant, $2.2M penalty clause).

Confirms the new location (8484 Elk Grove-Florin Road), original project specs (3-story, 67 units, Old Town historic district). Confirms city provides $5M grant.

Best source for the September 2023 staff recommendation and council postponement. Contains description of the project as the first in Elk Grove for formerly homeless families, the dual-lawsuit timeline, and the state lawsuit allegations.