Lost in the drama of the City Council’s final meeting of the year was the announcement by Mayor John Stephens that the City of Costa Mesa had prevailed in one of its long-standing court cases, The Ohio House, LLC v. City of Costa Mesa. The Mayor’s reference to this case stirred up an issue that had been dormant in Costa Mesa for several years: the proliferation of sober living homes in the city, the attendant public policy challenges that caused, and the city’s fight with both operators and the State of California to rein them in.

Mayor Stephens summed up the local political background of the case at the December 5th meeting. He does a great job so go take a listen as I won’t recount it here:

The Ohio House case itself stemmed from the City’s enforcement of its sober living home ordinances against a sober living home operator back in 2016. After going through several rounds of appeals and reviews at the municipal level, ultimately the operator chose to sue, arguing that Costa Mesa’s ordinances discriminated against the disabled in violation of both state and federal law – specifically California Government Code Section 65008, the California Fair Employment and Housing Act (FEHA) and the federal Fair Housing Act (FHA).

Keep Section 65008 in mind, as we’ll come back to it. First, let’s look at the FEHA and FHA claims.

At the District Court, a jury found in favor of the City on the claims relating to the FEHA and the FHA. What has the Mayor so excited is that fact that, after Ohio House appealed that verdict, the Ninth Circuit Court of Appeals recently affirmed it in what will likely be a landmark decision. Costa Mesa’s sober living home ordinances, which allows operators to open group homes in residential zones provided that they meet the city’s requirements, provided a facial benefit to disabled persons, rather than discriminating against them. Take for example, the Ninth Circuit writes, the application of Costa Mesa’s sober living ordinances to its R1 zones:

In this case, the City’s zoning code benefits the disabled over the nondisabled with regard to group-living facilities. For example, group homes and sober-living homes with six or fewer residents may operate in R1 zones if they meet permitting and separation requirements. […] But boardinghouses of any size are categorically barred from operating in R1 zones. […] The City’s permitting and separation requirements applicable to group homes located in R1 zones impose a burden, but they also give facilities housing the disabled an avenue for operating in these zones that is unavailable under any circumstances to similar group-living dwellings housing the nondisabled. In this context, the burden imposed is connected to a benefit. And on net, operators and residents of group homes and sober-living homes in R1 zones are facially advantaged over other group-living facilities.

The Ohio House, LLC v. City of Costa Mesa, et. al., p. 23-24

You’ve got to be kidding me. This means that Costa Mesa was saved by… exclusionary zoning?! “Nobody can build anything in Costa Mesa’s R1 zones!” the Ninth Circuit reasons. “The fact that sober living operators can legally run a boarding house in a R1 parcel means the city is giving those operators (and their clients) a benefit the city withholds from the rest of its residents! Ergo, no discrimination!”

Behold, the majesty of the law.

Want to chop up a single family residence into six apartments and scam — I mean, lawfully exploit — our health insurance system for millions of dollars by importing out-of-state drug addicts into the middle of established neighborhoods?* Go right ahead. Want to convert your single family residence into six apartments to help Costa Mesa residents afford a decent home and to alleviate the housing crisis? Go straight to jail. What ding-dong reasoning from the Ninth Circuit.

Alas, after other legal setbacks — you might recall that, around this time last year, the Ninth Circuit issued a body blow to Costa Mesa by ruling that sober living home operators could simply be assumed to be representing disabled persons, without having to make any findings that their clients were actually disabled — this opinion is easily the City’s best hope to keep its ordinances on its books and enforceable. So long as sober living home operators are given benefits that are otherwise withheld from similarly situated residents. Sigh.

So it’s over, right? Yes! Probably. Maybe.

But wait: is HCD done with sober living home ordinances?

Remember up top when I told you not to forget about Ohio House’s claim that the city’s ordinances violated Cal. Gov’t. Code Section 65008?

Well, here’s why: yes, Ohio House affirmed that, for the purpose of that case, the Section 65008 claim was time-barred (lawyer speak for: you brought your claim too late, dude). But that also means that neither the jury nor the Ninth Circuit weighed in on the merits of that claim.

Which is kinda a bummer, since Section 65008 was the subject of a nastygram the California Department of Housing and Community Development (HCD) issued to the City of Costa Mesa last Fall. In it’s “letter of technical assistance,” which was really more a “letter of threat of litigation”, the HCD stated flatly that, in its opinion, the City’s sober living home ordinances violated Section 65008, which prohibits cities from using land use rules to discriminate on the basis of personal characteristics or income. So what should the City do about that? Rip ’em out: “immediately stop enforcing its group home ordinances, repeal them, and revise its reasonable accommodations policies.”

Now, to my knowledge, the city has not repealed or revised its sober living home ordinances since that letter was issued (whether we’ve stopped enforcement is something I’m not in a position to know). Last I heard Governor Gavin Newsom was still very eager to defend sober living homes against ordinances such as Costa Mesa’s, going so far as to instruct California Attorney General Rob Bonta to file an amicus brief in support of Ohio House in the recent case. Sacramento may still want HCD to press its case as a matter of State law enforcement, regardless of the outcome in Ohio House.

That would be a problem. The Costa Mesa Housing Element is still seeking HCD certification. While the long pole in the tent there is rezoning our Measure K sites, rather than our sober living home ordinances, both have to be addressed for us to finally wrap up that process. And until we do, we risk losing out on all kinds of state housing grants and we remain subject to the Builder’s Remedy.

But maybe a big court loss like this one will cause Newsom (and by extension, Bonta and HCD) to reconsider his stance. As we were colorfully reminded the other week, the winds of change are blowing. Common sense is suddenly very popular. So maybe, with luck, the State will back off.

*Note: Upon re-read a day later, I realize this characterization is unfair to the many sober living homes who are legitimately helping many people in Costa Mesa. The intent was not to paint all such operators with a broad brush. Rather, it should be read as a glib reference to some operators that really are exploiting a poorly designed system.