On April 15, 2021, the California Supreme Court declined the Department of Finance’s request to depublish the opinion in Legal Aid Society v. Department of Finance, 59 Cal. App. 5th 166 (2020). The opinion (also linked below) filed on December 28, 2020, found that over $10 million in the former Redwood City Redevelopment Agency’s Low and Moderate Income Housing Fund (LMIHF) that was required by contract to be used for affordable housing had been wrongfully determined unrestricted and swept from the former redevelopment agency’s LMIHF along with other unencumbered funds.
In 1990, Legal Aid Society of San Mateo County negotiated changes to Redwood City’s housing element to benefit their clients and obtained a commitment from the Redwood City Redevelopment Agency for millions of dollars to be deposited in the LMIHF, over and above the Agency’s statutory requirement, exclusively for the construction, rehabilitation, or preservation of affordable housing. After all redevelopment agencies were dissolved, however, the Department of Finance found that the agreement was not an enforceable obligation and ordered that the funds deposited pursuant to the contract be disbursed to the taxing entities in San Mateo County despite the clear contractual requirements and critical lack of affordable housing in San Mateo County. LASSMC then filed this suit challenging DOF’s decision.
The Court of Appeals ordered the case remanded to the Sacramento County Superior Court which entered Judgment on April 9, 2021 in favor of LASSMC and required DOF to determine that the agreement is an enforceable obligation , as defined by the Dissolution Act, and that the funds are a Housing Asset available for the development of affordable housing.