Costa Mesa — In a major victory for low-income tenants displaced from residential motels by municipal action, the City of Costa Mesa and a local developer have agreed to pay millions of dollars to settle a pair of lawsuits filed by displaced tenants and affordable housing advocates. Public Law Center and partners represented plaintiffs in challenging the City’s efforts to force the sale or closure of residential motels, a policy that effectively left dozens of families homeless and put dozens more at risk. The developer also agreed to set aside additional affordable housing units in a complex under construction and the City agreed to provide affordable housing units in a future project.

In one of the cases, low-income motel residents sued Costa Mesa over its ordinance restricting occupancy at local motels to no more than 30 days. (Dadey v. Costa Mesa). In the second case, an affordable housing group, The Kennedy Commission, joined motel residents in challenging a plan to redevelop the Costa Mesa Motor Inn into luxury apartment units Motor Inn residents would not be able to afford. (Kennedy Commission et. al. v. Costa Mesa et. al)

Under the settlement agreement, the City of Costa Mesa and the developer agreed to the following:

  • $250,000 of compensation to individual named plaintiffs
  • $650,000 to a fund for distribution to those displaced from motels.
  • To use its best efforts to set aside extremely low (a family of four that makes at or below $32,800 in 2018), very low ($54,000 or less) and low-income ($87,450 or less) units in any affordable housing created at Fairview Development.
  • To seek a request for proposals for construction of additional extremely low and very low income housing units at a separate City-owned location. (In addition, the developer of the Costa Mesa Motor Inn site agreed to set aside 9 very low-income units in its new project in order to be permitted to proceed with a scaled-down version of its original development.)
  • To re-evaluate the Ordinance restricting long-term occupancy in motels.
  • Payment of attorneys’ fees divided among the nonprofit public interest law firms involved in the case.

Former Motor Inn resident Tim Dadey, who became homeless as a result of the motel closure, noted “this money is really important to those who were evicted and will provide much needed financial support that can be used to cover security deposits and rent to put a roof over our heads.”

The housing discrimination lawsuits were triggered by the City’s efforts to close local motels that provided long-term housing to residents of limited means, including many families with children or people with disabilities. The number of families living in the motels was so significant that the City had previously satisfied its state-established affordable housing target by counting the motels as available low-income housing. Despite fulfilling a desperate need for housing, the then mayor, after acknowledging that the motel residents faced significant personal challenges, declared that “if you are living in a motel you should be moving…you should be reminded every 28 days this is not working in your life.” By precluding long-term residencies with the Ordinance, the City’s plan was to force the motels to sell their properties so that luxury apartment complexes could be built in their place to house, in the mayor’s words, “nice people who make good money.”

The City’s desire for motel redevelopment was realized with the largest of the motels – the Costa Mesa Motor Inn. After pressuring the motel owners with citations and permit revocation, the City solicited and approved the developer’s request to convert the motel into a 224-unit luxury apartment complex, without requiring the state-mandated affordability that accompanies such an increase in density. The approval ultimately led to the eviction and displacement of dozens of families and individuals, several of whom ended up without a roof over their heads.

Cesar Covarrubias, Executive Director of the Kennedy Commission, a plaintiff in the second case, remarked: “To solve the state’s profound affordable housing crisis, every city must do its part. This settlement is an important and necessary first step for Costa Mesa to foster the development of its fair share of affordable housing.”

A team of lawyers that included Haynes and Boone partner Mark Erickson and associate Matthew Costello, Public Law Center attorneys Ken Babcock and Richard Walker, Legal Aid Society of Orange County attorney Lili Graham, and Western Center on Law and Poverty attorneys Richard Rothschild and Navneet Grewal represented the plaintiffs in the Orange County action. The plaintiffs and their legal team were able to get an injunction early in the proceeding against the Ordinance halting its enforcement pending trial.

Plaintiffs in the second action, Kennedy Commission v. Costa Mesa et. al, were represented by Jeremy Matz of Bird, Marella, Boxer, Wolpert, Nessim, Drooks, Lincenberg & Rhow, P.C., Julian Burns King of King & Spiegel, LLC, Lili Graham of Legal Aid Society of Orange County, Michael Rawson and Melissa Morris of Public Interest Law Project, Richard Walker and Ugochi Anaebere-Nicholson of Public Law Center, and Richard Rothschild and Navneet Grewal of Western Center on Law and Poverty.