Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_02-cv-00065/USCOURTS-caed-2_02-cv-00065-3/pdf.json

Nature of Suit Code: 443
Nature of Suit: Civil Rights Accommodations
Cause of Action: 42:405 Fair Housing Act

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1

UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

RICHARD PRICE, et al.,

NO. CIV. S-02-65 LKK/KJM

Plaintiffs,

v.

O R D E R

CITY OF STOCKTON, CALIFORNIA,

et al.,

Defendants.

 /

This action arises out of the City of Stockton’s aggressive

enforcement of the City’s housing codes which seeks to acquire

downtown single-room occupancy hotels (SROs), which house low

income and very low income persons. Plaintiffs are, inter alia,

low income individuals who were evicted from the SROs in downtown

Stockton. They brought this action seeking an injunction, alleging

that defendants are violating duties arising under the Housing and

Community Development Act, 42 U.S.C. §§ 5301 et seq., the Uniform

Relocation Act, 42 U.S.C. § 4601, the California Community

Redevelopment Law, Cal. Health & Safety Code §§ 33000 et seq., and

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1 The properties on defendants’ acquisition list include various

single-room occupancy hotels located within the West End Project

2

the California Relocation Assistance Act, Cal Gov’t Code §§ 7260

et seq.

On May 2, 2002, the court granted a preliminary injunction in

plaintiffs' favor. This matter now comes before the court on 

plaintiffs' motion to amend that preliminary injunction. I decide

the motion based on the papers and pleadings filed herein and after

oral argument. 

I.

FACTUAL BACKGROUND

In 1961, the City of Stockton and its Redevelopment Agency

adopted the West End Urban Renewal Project Development Plan

("West End Redevelopment Plan”) to redevelop downtown Stockton.

Preliminary Injunction Order (“PI Order”) at 2. The

Redevelopment Plan’s most recent amendment in 1991 authorized

the Redevelopment Agency to acquire all real property in the

project areas for development purposes, and to remove the

blighting influence of surrounding properties. Id. To further

redevelopment of downtown Stockton, the City established “a

capital program” to demolish buildings and purchase properties

to expand available parking in the area. Id.

In June 2001, the City Council met in a closed session to

discuss the possibility of acquiring property in downtown

Stockton. The City’s acquisition list included twenty nine

downtown properties, including many SROs.1 Id. at 2-3. 

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area, including the Commercial, Cosmos, Delta, Earle, El Tecolote,

Fair, James, La Verta, Mariposa, Merill, Oxford, Phoenix, Steve’s,

Terry and Toni hotels, as well as the Hunter Apartments. Id. 

3

Two days after the City Council meeting, the City and its

Redevelopment Agency began a policy of zero tolerance for code

enforcement violations in downtown hotels. Id. at 3. The City

Manager used the newly-created Community Health Action Team

(“CHAT”), a group composed of five City employees, two in the

Stockton Police Department and three in the Department of

Housing and Redevelopment, to implement its policy. Id. Under

the policy, hotels that were cited with code enforcement

violations could not re-rent rooms that became vacant until all

code violations were corrected, without regard to the actual

health and safety threat of violations in particular rooms. Id.

If the hotels failed to correct these violations, the hotels had

to be vacated and closed. Id. 

As part of their code enforcement scheme, defendants cited

sixteen of the twenty nine properties on defendants’ 2001

acquisition list, which are all downtown SROs and lower income

apartments. Id. at 3-4. Between July 2001 and December 2002,

defendants vacated and closed nine of the properties on their

acquisition list (the Commercial, Cosmos, Earle, El Tecolote,

James, La Verta, Mariposa, Steve’s and Terry Hotels) plus the

Land Hotel (not on its acquisition list), resulting in the

removal of 351 lower income residential units from the West end

redevelopment Plan area. Id. at 4 and fn. 3; see also Decl. of

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2 In January 2003, staff reported to the City Council that it was

still in the process of acquiring the Commercial Hotel “for the

purpose of parking expansion.” Id.

4

Deborah Collins in Support of Pl’s Mot. to Amend PI (Collins

Dec.) ¶ 11, Ex. 10 at 637. 

Plaintiffs allege that defendants continue to pursue their

downtown redevelopment plan by acquiring, demolishing, and

threatening to demolish many of the SROs that were closed. 

 Consistent with their redevelopment scheme, defendants

acquired the Terry Hotel and commenced an eminent domain action

against the Commercial Hotel in 2002. See PI Order at 25; see

also Burrows Dec. ¶ 14, Exs. 22, 23. Both were purportedly

needed for public parking purposes. Id., see also Collins Dec. 

¶ 15, Ex. 14.2 The Toni Hotel was acquired on March 26, 2002 to

support parking for the Cineplex development (currently referred

to as the City Center Cinema Project). Burrows Dec. ¶ 4, Exs.

11, 12; ¶ 12, Ex. 20. The City acquired El Tecolote on May 9,

2002, and the Earle Hotel on July 11, 2002. Burrows Dec. ¶¶ 5,

6, Exs. 13, 14. The City Council approved an agreement to

purchase the Main Hotel, also to provide parking in January

2003. Collins Dec. ¶ 15, Ex. 14. On October 5, 2004,

defendants obtained a condemnation order in their eminent domain

action against the La Verta Hotel. Burrows Dec. ¶ 8, Ex. 16. 

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3 The court may take judicial notice of the pleadings and record

in the action, Portale v. City of Stockton, Case No. Civ. S-02-988

LKK/KJM.

5

The Land Hotel was acquired as part of the settlement and

dismissal by the property owner of an action in this Court.3 

Defendants demolished Hunter Apartments in April 2002, just

prior to issuance of the Preliminary Injunction, for a loss of

24 lower income units. Collins Dec. ¶ 10, Ex. 9 at 570; Choi

Dec. ¶ 3, Ex. 1. In January 2003, the CHAT reported that

demolition of the Mariposa and Steve’s Hotels awaits “Federal

Court ruling.” Collins Dec. ¶ 11, Ex. 10 at 642. 

On December 14, 2004, the defendants approved the

demolition of and shortly thereafter demolished the Toni hotel,

resulting in the permanent loss of eight more SRO units. 

Burrows Dec. ¶ 3, Ex. 10; Burrows Dec. ¶¶ 12, 13, Exs. 20, 21. 

Plaintiffs allege that the defendant agency, however tardily,

adopted a replacement housing plan for the eight Toni Hotel

units to permit demolition to occur. Id. According to

plaintiffs, the Agency failed to assure that persons displaced

by the downtown project have a priority for the purported eight

“replacement” units. See Burrows Dec. ¶¶ 12, 13, Exs. 20, 21;

Decl. of Stanford Cobbs in Support of Pl’s Mot. to Amend PI

(Cobbs 2005 Dec.), ¶ 4; Decl. of Dwain Henderson in Support of

Pl’s Mot. to Amend PI (Henderson 2005 Dec.), ¶ 4.

Plaintiffs have submitted evidence indicating that

additional low-income housing may soon be removed from the

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market. For example, in 2003, the Agency designated a square

block that includes the Delta Hotel property as a Master

Development Area and obtained a development proposal to

construct a gated and landscaped parking lot that would extend

right through the Delta parcel. Collins Dec. ¶ 17, 18, 19, Exs.

16, 17, 18. 

According to the plaintiffs, at least 351 lower income

units were removed from the affordable housing market as a

result of the “code enforcement” closures in 2001 and 2002. 

Thirty-two lower income units (Hunter and Toni) have been

demolished. Another seven to eight SRO’s, with a total of 349

units, already acquired by defendants remain at imminent risk of

demolition.

II.

PROCEDURAL BACKGROUND

Plaintiffs filed this action in January 2002 against

numerous defendants, including the City of Stockton and the

Stockton Redevelopment Agency. The suit sought declaratory and

injunctive relief and a writ of mandate for alleged violations

of state and federal relocation assistance, replacement housing,

fair housing and other statutes claimed to be applicable to

defendants’ displacement of hundreds of downtown residents and

closure of nine downtown SRO’s. See Compl. 

In February 2002, plaintiffs sought a preliminary

injunction to restrain defendants from vacating, converting and

demolishing those residential units without providing adequate

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relocation assistance or adopting and implementing replacement

housing plans. Plaintiffs sought the Preliminary Injunction

pursuant to the federal Housing and Community Development Act

(“HCDA”), 42 U.S.C. §§ 5301 et seq., the California Relocation

Assistance Act, Cal. Gov't Code § 7260, and federal and state

fair housing statutes, 42 U.S.C. §§ 3601 et seq. and Cal. Gov't

Code §§ 12900 et seq. 

Finding that plaintiffs were likely to succeed on the

merits of their HCDA § 104(d) and state law relocation

assistance claims, and that the balance of hardships tipped

decidedly in plaintiffs’ favor, this Court issued a preliminary

injunction on May 2, 2002, as modified on June 14, 2002. That

preliminary injunction restrained defendants, among other

things, from demolishing or converting any of the downtown

residential properties until they adopted and implemented a

valid replacement housing plan in accordance with HCDA. See

Order dated May 2, 2002 at 36 ¶ 2; Order dated June 14, 2002 

at 1 ¶ 1. Determining that plaintiffs were likely to prevail on

their HCDA claims, the court did not reach plaintiffs’ fair

housing claims. Id. at 33-34. 

Upon defendants’ appeal, on December 6, 2004, the Ninth

Circuit affirmed the preliminary injunction order with respect

to the relocation assistance requirements. Price v. City of

Stockton, 390 F.3d 1105, 1118 (9th Cir. 2004). It reversed and

remanded, however, as to the court’s prohibition of demolition

or conversion of the hotels absent a replacement housing plan

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holding that plaintiffs cannot privately enforce the replacement

housing provisions of HCDA. Id. at 1113-14, 1118. 

In the present motion, plaintiffs assert that the

defendants are in violation of California’s Community

Redevelopment Law (CRL), codified at Health and Safety Code 

§§ 33000 et seq., the California Fair Housing & Employment Act

(“FEHA”), Cal. Gov't Code §§ 12900 et seq., and the federal Fair

Housing Act, 42 U.S.C. §§ 3601 et seq. Based upon that

contention, they seek to have the preliminary injunction amended

to prevent the demolition or conversion of the downtown singleroom occupancy hotels and apartments defendants removed from the

affordable housing market in 2001 and 2002, pending trial of the

action, unless they first adopt a lawful replacement housing

plan.

III.

STANDARD OF REVIEW

The Ninth Circuit has adopted two tests for determining the

propriety of a preliminary injunction. The moving party must

demonstrate either (1) a combination of probable success on the

merits and the possibility of irreparable injury or (2) that

serious questions are raised and the balance of hardships tips

sharply in favor of the moving party. Conn. Gen. Life Ins. Co.

v. New Images of Beverly Hills, 321 F.3d 878, 881 (9th Cir. 

2003). These two formulations are not different tests but

represent two points on a sliding scale in which the required

probability of success decreases as the degree of irreparable

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harm increases. Oakland Tribune, Inc. v. Chronicle Publishing

Co., 762 F.2d 1374, 1376 (9th Cir. 1985). In addition, a court

in either formulation of the test must also take into account

the public interests that are implicated by the relief sought

when it is balancing the harms. Caribbean Marine Services Co.

v. Baldridge, 844 F.2d 668, 674 (9th Cir. 1988). 

The California standard is quite similar to the federal

standard. In deciding whether to issue a preliminary

injunction, a court must weigh two ‘interrelated’ factors: (1)

the likelihood that the moving party will ultimately prevail on

the merits and (2) the relative harm to the parties from the

issuance or non-issuance of the injunction. Butt v. State of

California, 4 Cal.4th 668, 677-78 (1992); Cohen v. Board of

Supervisors, 40 Cal.3d 277, 286 (1985). “The trial court’s

determination must be guided by a ‘mix’ of the potential-merit

and interim-harm factors; the greater the plaintiff’s showing on

one, the less must be shown on the other to support an

injunction . . . .” Butt, 4 Cal.4th at 677-78 (citations

omitted). 

IV.

ANALYSIS

Plaintiffs contend that defendants’ closure, acquisition, 

and threatened demolition and conversion of the downtown SROs

are all part of defendants’ West End Redevelopment Plan. They

assert that, because the redevelopment project is the subject of

a written agreement between the Agency and the City, and the

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4 The statute provides:

Whenever dwelling units housing persons and families of

low or moderate income are destroyed or removed from the

low- and moderate-income housing market as part of a

redevelopment project that is subject to a written

agreement with the agency or where financial assistance

has been provided by the agency, the agency shall,

within four years of the destruction or removal,

rehabilitate, develop, or construct, or cause to be

rehabilitated, developed, or constructed, for rental or

sale to persons and families of low or moderate income,

10

Agency financially assisted the project, the Agency must adopt a

replacement housing plan pursuant to the CRL. I examine these

contentions below. 

A. THE COMMUNITY REDEVELOPMENT LAW

The CRL provides that prior to removal of lower income

units from the affordable housing market as part of a

redevelopment project, redevelopment agencies must adopt a

replacement housing plan that will ensure the units are replaced

within four years of removal pursuant to Cal. Health & Safety

Code §§ 33413 and 33413.5. In enacting the CRL, the state

legislature intended to protect and “to expand the supply of

low- and moderate-income housing.” Cal. Health & Safety Code §

33071. To assure the development of affordable housing,

redevelopment agencies are required to comply with CRL’s

“inclusionary” or “production” requirements as part of certain

redevelopment plans. Id. at § 33413(b). Specifically, the CRL

requires replacement of lower income housing that is destroyed

or removed from the housing market as part of a redevelopment

project.4 The “replacement” units must be available

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an equal number of replacement dwelling units that have

an equal or greater number of bedrooms as those

destroyed or removed units at affordable housing costs

within the territorial jurisdiction of the agency 

. . . .

Cal. Health & Safety Code § 33413(a). 

5 If the units were removed or destroyed between September 1, 1989

and January 1, 2002, 75% of the replacement units were required to

be affordable at the same or lower income levels as the persons

displaced. For any units removed or destroyed after January 1,

2002, 100% of the replacement units must be affordable to the

persons displaced. Further, the replacement units must be

restricted by recorded covenants to remain affordable at such

income categories for the longest feasible time, and not less than

55 years for rental units or 45 years for homeownership units. Cal.

Health & Safety Code § 33413(c)(1).

11

at an affordable housing cost at the same or a lower income

level as the persons displaced from the units that are destroyed

or removed. Id.

5

Further, a redevelopment agency must adopt a replacement

housing plan well in advance of removing the units:

Not less than 30 days prior to the execution of an

agreement for acquisition of real property, or the

execution of an agreement for the disposition and

development of property, or the execution of an owner

participation agreement, which agreement would lead to

the destruction or removal of dwelling units from the

low- and moderate-income housing market, the agency

shall adopt by resolution a replacement housing plan 

. . . .

Cal. Health & Safety Code § 33413.5. The plan must specify the

general location of the replacement housing units, an adequate

means of financing those units, the number of units housing

lower income persons and families that will be removed from the

market, and the timetable for meeting the plan’s relocation,

rehabilitation and replacement housing obligations. Id. Prior

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to the adoption of the replacement housing plan, however, “the

agency shall make available a draft of the proposed . . . plan

for review and comment by the project area committee, other

public agencies, and the general public. Id. Thus, the CRL

provides a scheme to ensure both public participation and the

timely replacement of the lower income units at appropriate

affordability levels.

Finally, whenever any lower income housing units are

developed pursuant to Health & Safety Code § 33413, a

redevelopment agency must require by contract or other

appropriate means that the lower income families displaced by

the redevelopment project shall have a priority for renting or

buying the replacement housing. Id. at § 33411.3. The agency

also must maintain a list of all persons entitled to such a

priority, and may establish reasonable rules for determining the

order or priority on the list. Id.

1. Applicability of the CRL

Defendants’ primary defense against the plaintiffs’ CRL

cause of action is that the replacement housing obligations are

not applicable to the defendant City. The simple but fatal flaw

to this argument is that the plaintiffs never allege that the

City is burdened by such obligations, rather, they argue that it

is the defendant agency which must act. While it is true that

plaintiffs contend that the City was the main protagonist behind

the challenged actions, they maintain that the City did not act

alone, since the actions at issue were part of downtown

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redevelopment scheme agreed to by both the Agency and the City. 

According to plaintiffs, the Agency’s obligations under the CRL

were triggered by the City’s actions because they acted in

concert. 

Contrary to defendants’ suggestion, the Agency cannot

escape obligations under § 33413 of the Cal. Health & Safety

Code simply because the City, and not the Agency, led the code

enforcement, closing, and demolition campaign. The CRL makes

clear that the provisions of § 33413 are triggered and imposed

on the Agency whenever it is a party to a written agreement for

a redevelopment project that leads to the removal of low or

moderate income housing from housing market, which is

plaintiffs' actual allegation. Cal. Health & Safety Code 

§ 33413(a). 

The defendants also maintain that, even if City actions may

trigger the Agency’s CRL responsibilities, the actions

complained of here cannot do so because they were independent

and separate from the downtown redevelopment plan. They

maintain that the code enforcement and acquisition activities

had nothing to do with the redevelopment plan and were

undertaken only in the interest of protecting the health and

safety of Stockton’s citizens, including plaintiffs. 

Unfortunately for defendants, both this court and the Ninth

Circuit have already rejected this position. 

This court has determined that the code enforcement 

activities were likely “undertaken in connection with the

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redevelopment of the downtown.” PI Order at 25. As explained

in that order, both the Redevelopment Agency and the City of

Stockton adopted the West End Redevelopment Plan in 1961, which

was amended in 1991. Id. at 2. The court found that, in pursuit

of the downtown redevelopment, the City created a property

acquisition list and thereafter it, “and its Redevelopment

Agency[,] began a policy of zero tolerance for code enforcement

violations in downtown hotels,” using a "Community Health Action

Team ('CHAT')." Id. at 3. After reviewing the defendants’

arguments, similar to the ones made here, the court concluded

that the “defendants’ actions are likely part of a single

orchestrated redevelopment plan.” Id. at 23, n. 14. The Ninth

Circuit affirmed, stating that an abundance of evidence

supported plaintiffs’ claims that the aggressive code

enforcement campaign by the CHAT against the downtown

residential hotels, acquisition, threatened demolition, and

conversion of the hotels to parking lots or other uses are all

part and parcel of defendants’ West End Redevelopment Plan. 

Specifically, that court noted that: 

The [district] court . . . found . . . that the City’s

“redevelopment activities, which included code

enforcement, notices of vacating and demolition, and

the acquisition of hotels through purchase and eminent

domain proceedings, amounted to a ‘single

undertaking.’” . . . Indeed, “the circumstances

strongly suggested” that ‘the City’s goals to

redevelop downtown through acquisition of buildings in

the area . . . precipitated code enforcement.” . . .

Accordingly, the court concluded that Plaintiffs’

displacement occurred “in connection with” downtown

redevelopment activities. None of these findings are

clearly erroneous; indeed, all are amply supported by

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evidence in the record.

Price v. City of Stockton, 390 F.3d at 1116 (quoting PI Order at

2-5, 21-25.) 

Accordingly, because the code enforcement activities were

likely part of the downtown redevelopment project, plaintiffs

may properly seek to hold the Agency liable pursuant to 

§ 33413(a) based on those actions.

2. Written Agreement

The defendants insist that the Agency cannot be held liable

for the City’s code enforcement or SRO closing and acquisition

activities because the plaintiffs cannot point to any part of an

agreement entered into by the Agency that calls for those

specific activities. As I explain, defendants’ understanding of

§ 33413 is too narrow and must be rejected. 

Contrary to defendants’ contentions, there is nothing in

the CRL that limits the Agency’s § 33413 obligations to only

those agreements that specifically outline the removal of lowincoming housing. If that were the case, redevelopment agencies

would always be able to circumvent CRL’s replacement housing

mandate by simply omitting housing removal language from such

agreements, even if the redevelopment project that is the

subject of the agreement would in fact inevitably lead to low

income housing removal. The CRL’s plain language clearly does

not allow for that result. Section 33413 provides that whenever

low or moderate income housing is “destroyed or removed . . . as

part of a redevelopment project that is subject to a written

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agreement with the agency or where financial assistance has been

provided by the agency, the agency shall . . . rehabilitate,

develop, or construct . . . replacement dwelling units.” Cal.

Health & Safety Code § 33413(a). Therefore, as long as any part

of the redevelopment project results in the removal of low

income housing, and the Agency is a party to a written agreement

entered into pursuant to that redevelopment project, the Agency

must comply with the CRL replacement housing obligations,

regardless of which entity actually and directly does the

removing. 

Here, the plaintiffs have presented sufficient evidence

supporting their contention that the Agency entered into an

agreement concerning a redevelopment project that led to the

removal of low and moderate income housing from the City of

Stockton’s housing market. As the defendants necessarily

concede, the Agency was a party to the West End Redevelopment

Plan. Plaintiffs allege, and the court has determined it

likely, that the code enforcement and SRO closing and

acquisition activities were part of that redevelopment project. 

Plaintiffs also point to evidence showing both that the Agency

played an integral part in the execution of the redevelopment

project and that the project has resulted in the displacement of

low and moderate income housing. In July 1998, the defendant

City applied to the U.S. Department of Housing and Urban

Development (“HUD”) for an Economic Development Initiative

(“EDI”) grant and Section 108 loans to further the downtown

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redevelopment project, to support the development of a multimodal transportation station, renovation of the Hotel Stockton,

development of a multi-screen movie cinema and retail complex,

renovation of the Fox Theater, and the Mercy Charities

affordable housing development. Pinkerton Dec., ¶¶ 7, 9, 12;

Collins Dec., Exs. 2, 3, 7 and 11. In the application, the City

acknowledged that “[t]he EDI and Section 108 funded projects

will require the relocation of approximately 200 residential

units and 37 businesses . . . .” Collins Dec., Ex. 2 at DEF

03155. The City also identified the Redevelopment Agency as the

lead player in its redevelopment scheme, indicating that “[t]he

Redevelopment Agency has a long history of playing the

coordination role and as the Agency responsible for the

comprehensive project implementation. . . .” Id. at DEF 03185. 

Therefore, the defendants cannot seriously dispute that the

Agency did not enter into an agreement of the type contemplated

by § 33413. 

2. Financial Support

I now examine plaintiffs' contention that the Agency is

also subject to § 33413 of the CRL because it provided financial

assistance for the redevelopment project which led to the

removal of low and moderate income housing. 

Plaintiffs point to the City’s EDI grant and § 108 loan

applications as proof that the Agency helped finance the

challenged activities. Collins Dec. ¶ 3, Ex. 2. According to

that application, the Agency was to contribute over $2.7 million

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as matching funds in support of the EDI application. Id. at DEF

03183, 03191. Further, in May 2000, the City and the

Redevelopment Agency entered into an agreement whereby the City

agreed to grant $14.5 million to the Redevelopment Agency to

carry out the redevelopment project, and the Agency agreed to

assist the City, as needed, in repaying a $13 million § 108 loan

the City obtained from HUD. Collins Dec. ¶ 6, Ex. 5 at 14682-

83. The evidence indicates that the Agency provided matching

redevelopment funds of over $2.7 million for the EDI grant and

secured the § 108 loan. Collins Dec., Ex. 2 at DEF 03183,

03191; Ex. 5 at DEF 15002-03. Accordingly, plaintiffs have

sufficiently shown that the Agency financially supported the

redevelopment project at issue, thereby triggering § 33413(a).

B. CRL COMPLIANCE

According to plaintiffs, defendants have violated the CRL

in at least three ways: (1) by failing to adopt a replacement

housing plan for the SRO’s within the time line mandated by 

§ 33413.5, (2) by failing to adopt an adequate replacement

housing plan for the Toni Hotel units, and (3) by evading its

obligation to assure that the persons displaced to accommodate

the downtown redevelopment project actually receive a priority

for any replacement units developed pursuant to Health & Safety

Code § 33413. I address these contentions below. 

1. Adoption of a Replacement Housing Plan

The CRL mandates that the defendant agency replace low and

moderate income units removed from the housing market as a

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6 Plaintiffs also submit that § 33413.5 was triggered as early as

May of 2000, when the City and the Agency entered into the

“Subrecipient Agreement” that secured the funding for the

redevelopment project because it provided for the removal of at

least 200 residential units. Collins Dec. ¶6, Ex. 5 at 14682-83.

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consequence of the redevelopment plan within four years. Cal.

Health & Safety Code § 33413(a). As noted above, to meet that

deadline, the agency must plan for the replacement well in

advance of the actual implementation of the redevelopment

project.

As plaintiffs assert, the defendants have long since

removed hundreds of lower-income residential units from the

affordable housing market. See supra; PI Order at 4, fn. 3;

Collins Dec. ¶ 10, Ex. 9 at 570. By virtue of the statute, the

replacement units should have been made available between June

2005 and May 2006, and the plan to meet that deadline should

have been adopted years ago.6

Defendants admit that, with the exception of the Toni

Hotel, the Agency has not adopted a replacement housing plan for

any of the units that were removed from the market during the

code enforcement phase of the project. Defs.' Opp'n. at 23-25. 

Therefore, because replacement plans were never adopted, the

hundreds of SROs should never have been removed from the lowincome housing market. Section 33413.5 is unambiguous in

providing that: 

A dwelling unit whose replacement is

required by Section 33413 but for which no

replacement housing plan has been prepared,

shall not be destroyed or removed from the

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7 Moreover, the offer to purchase the Toni Hotel was made on

November 27, 2001 (Collins Dec. ¶14, Ex. 13), and the Toni Hotel

site was deeded to the City on March 26, 2002. Burrows Dec. ¶4,

Exs. 11, 12. Thus, execution of the acquisition agreement, which

also can trigger the replacement planning obligation, occurred

sometime before March 26, 2002. 

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low- and moderate-income housing market

until the agency has by resolution adopted a

replacement housing plan.

Health & Safety code § 33413.5.

Plaintiffs also assert that the Agency further violated the

CRL when it failed to timely adopt a replacement housing plan

for the Toni Hotel. Defendants erroneously assert that the

replacement plan must be adopted “at least 30 days prior to

implementing a project.” Burrows Dec. ¶ 12, Ex. 20 at 425

(emphasis added). The statute makes clear, however, that

defendants were required to adopt such a plan thirty days prior

to the execution of the agreement regarding the acquisition or

disposition of the hotel. Because plaintiffs provide proof that

such an agreement was entered into as early as May, 2000,

Collins Dec. ¶ 20, Ex. 19; Burrows Dec. ¶ 12, Ex. 20, defendants

may have been required to be adopt a plan as early as April of

2000.7 Instead, however, defendant agency waited until December

14, 2004, on the eve of demolition, to adopt any replacement

housing plan for the eight Toni Hotel SRO units. Burrows Dec. 

¶ 12, Ex. 20. Therefore, plaintiffs are likely to succeed on

their claim that defendant agency violated the CRL. 

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2. Affordability Requirements

The CRL requires that replacement housing be made available

to the same or lower income levels as the residents that were

displaced. Health & Safety Code § 33413.5. The replacement

housing plan for the Toni Hotel provides that the former

residents of the Toni Hotel were all very low income, Burrows

Dec. ¶ 12, Ex. 20 at 430, and accordingly provides that the

replacement housing will be affordable to persons of that income

level. Plaintiffs complain that defendants’ income level

determination is inappropriately based on pure speculation.

According to plaintiffs, the former residents of the Toni Hotel

may have just as likely been persons with “extremely low,”

rather than very low incomes. As such, the Toni Hotel

replacement units would not be affordable to those former

residents. 

The defendants respond that replacing the plaintiffs’

proposed gradation of income level to include “extremely low

income” is nowhere contemplated by the CRL, and that instead,

the statute provides only for “very low income,” “low income,”

and “moderate income.” As plaintiffs point out, however, the

term “very low income” expressly includes “extremely low income

households, as defined in [HSC] Section 50106. . . .” See

Health & Safety Code § 50105(b). It would appear the defendants

have a duty to ascertain the income level of those displaced,

and in the absence of evidence that they did so, plaintiffs may

well succeed on their claim that defendants violated section

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33413(a). 

3. Priority Requirements

Plaintiffs also contend that the defendant agency failed to

assure that any displaced persons will receive priority for any

replacement units produced or replaced, as required by 

§ 33411.3. The named plaintiffs in this case assert that they

have never been notified by defendants of their right to have

priority for a replacement unit at the Hotel Stockton. Henderson

2005 Dec. ¶ 4; Cobbs 2005 Dec. ¶ 4. Further, according to

plaintiffs, all 155 of the replacement units at the Hotel

Stockton are restricted to seniors and will only be affordable

to very low income persons, thereby denying all displaced

persons from a meaningful opportunity to obtain replacement

housing. To highlight the detrimental impact of the housing

restriction, plaintiffs point out that approximately 70% of the

persons recorded on defendants’ Relocation Assistance Log are

not seniors, and are therefore ineligible for the replacement

units. Cobbs 2005 Dec. ¶ 3; Henderson 2005 Dec. ¶ 3. 

The defendants dispute plaintiffs’ contention by citing to

a declaration of Steven Pinkerton, director of the City’s

Housing and Redevelopment department, who states that, although

Hotel Stockton was initially planned as senior housing, that

restriction was never realized. Pinkerton Decl. §§ 12-14. The

record also contains evidence supporting plaintiffs’ position,

however, rendering this issue a factual dispute. For the

purposes of this motion, however, the court determines that the

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8 In any event, defendants heartless argument rests on a

misreading of the law. Defendants’ argument is premised on the

notion that even if the Agency adopted a replacement housing plan,

it would have four years from the date of demolition to replace the

units, which defendants estimate to be 2009 or 2010. As explained

above, that calculation is incorrect as to many of the buildings

that have already been vacated. 

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plaintiffs may prevail on this claim.

C. IRREPARABLE INJURY

Defendants contend that the relief sought by the plaintiffs

is unwarranted because they will suffer no irreparable harm

without it. This court has previously found that defendants’

failure to comply with their replacement housing obligations law

“works a profound hardship” on plaintiffs. PI Order at 34.

Nothing suggests that conclusion was in error. 

As set forth in the declarations of plaintiffs Henderson

and Cobbs, defendants’ failure to comply with the CRL has

resulted in repeated instances of homelessness for Henderson. 

Henderson 2005 Dec. ¶ 5; Cobbs 2005 Dec. ¶ 5. The destruction

of additional units of low income housing units without an

adequate plan for replacement or reasonable and timely steps to

ensure that plaintiffs will receive the benefit of a priority

for any newly-developed units continues to threaten plaintiffs

with recurring and protracted homelessness. 

Defendants insist that presently plaintiffs will suffer

only a “harmless delay” in awaiting replacement of their homes.

See Defs.' Opp'n. at 4-5. Given the circumstances, any delay

threatens displacement and homelessness.8 

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Regarding SROs that are in danger of future vacation, the

defendants concede that, without the requested amendment, the

replacement housing may be delayed by six months. According to

defendants, “[i]t is hard to see how any of the plaintiffs would

be irreparably harmed by that kind of delay.” Defs.' Opp'n at 5. 

Sadly, defendants continue to fail to come to grips with the

harm that plaintiffs will likely suffer from what defendants

characterize as a short delay in replacement housing, giving

this court even more cause for concern. Although it may “be

hard” for the defendants to “see” how even short-term

homelessness can cause harm, in this court’s view, it does not

take more than common sense to understand the extent of that

hardship. 

First, it is likely that many of the displacees may not

find or be able to afford temporary housing while they await

their replacement housing to become available. Indeed,

“plaintiff Henderson has experienced repeated bouts of

homelessness since his displacement” while awaiting a

replacement units. Henderson Dec. ¶ 5. Further, plaintiffs

Watson and White have had difficulty in securing an affordable,

permanent home. Decls. of Lucinda Watson and Lance White in

Supp. of Pls’ Mot. to Amend PI (Watson Dec. ¶¶ 3, 4); (White

Dec. ¶¶ 2, 3, 6). Such short-term homelessness may result in

plaintiffs living in conditions even more deplorable than those

found in the units closed by defendants, exposing plaintiffs to

illness and other dangers. Further, the loss of opportunity to

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live in replacement housing that is safe, sanitary, decent and

integrated and that is accessible to jobs cannot be

underestimated. As put by one court, short-term homelessness

can mean the loss of that opportunity “‘to escape the neverending and seemingly unbreakable cycle of poverty.’” Gresham v.

Windrush Partners, Ltd., 730 F.2d 1417, 1424 (quoting Banks v.

Perk, 341 F. Supp. 1175, 1185 (N.D. Ohio 1972), aff'd in part

and rev'd in part, 473 F.2d 910 (6th Cir. 1973)). 

 Moreover, the defendants overlook the harm that stems from

depriving plaintiffs of their procedural rights to review and

comment on a replacement plan before any of the hotels are

demolished. Health & Safety Code § 33413.5. As noted, a

replacement housing plan must demonstrate where the replacement

units will be located, the number and affordability levels of

the units to be removed and replaced, and that adequate

financing is or will be available to replace the units in a

timely manner. Id. The proposed housing replacement plan must

be made available for review and comment by a Project Area

Committee (PAC) comprised of residents, businesses and

organizations within the project area, other public agencies and

the public. Id.; see also Health & Safety Code § 33385. Were

defendants permitted to continue to remove low and moderate

income housing from the housing market, plaintiffs would plainly

be deprived of their right to comment on and advocate for a

responsible replacement housing plan. 

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9 I must admit to finding it grotesque to seriously suggest that

a political subdivision of the state will suffer cognizable harm

from being required to obey state law. 

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 It is unclear to this court what harm defendants will

suffer from being required to obey state law.9 In any event,

plaintiffs’ harm far outweighs any hardship defendants may

suffer.

Plaintiffs have overwhelmingly shown a likelihood that they

will succeed on the merits of their CRL claim and that there is

a high likelihood that they will suffer irreparable injury. 

Because plaintiffs request the same relief pursuant to their

federal and state fair housing claims, it is unnecessary for the

court to reach the merits of those claims. 

V.

CONCLUSION

The plaintiffs’ motion to amend is GRANTED. Clause two of

the preliminary injunctive order dated May 2, 2002 is hereby

amended and shall now read: Defendants are ENJOINED from

vacating, demolishing, or converting residential hotels and

motels in the downtown Stockton areas, including those located

in the West End Urban Renewal Project area. The injunction

shall remain in effect until the defendants adopt and implement

a replacement housing plan and relocation assistance plan in

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accordance with Health & Safety Code §§ 33413, 33413.5, 33411.3

and 42 U.S.C. § 5304(d), or further order of the court.

IT IS SO ORDERED. 

DATED: August 9, 2005.

/s/Lawrence K. Karlton

LAWRENCE K. KARLTON

SENIOR JUDGE

UNITED STATES DISTRICT COURT

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