Home Builders May Sue if Orange County Passes Slow-Growth Initiative

A group of Southern California home builders is amassing a $250,000 legal-defense fund, part of which is expected to be used to pay for legal challenges to the Orange County slow-growth initiative should county voters approve it next year.

The building industry fears that the initiative, which would prohibit new construction in areas of heavy traffic, would drastically curtail future development.

Several polls show that Orange County voters--angered by clogged streets and freeways--overwhelmingly favor the initiative. So a lawsuit filed after the vote may be the industry’s only hope of preventing its restrictions from taking effect.

“It’s more than likely we’ll file suit,� said Kenneth W. Willis, executive vice president of the Building Industry Assn. of Southern California, which is sponsoring the defense fund.

“If we deal with this strictly as a political issue, we stand a much greater chance of losing.�

A major legal argument against the initiative would be that its prohibitions on growth preempt state and federal laws, Willis said.

Legal Wrangle Expected

Some lawyers already expect a legal wrangle if supporters gather enough signatures to get the initiative on the June or November ballots and it is approved.

“We’ll almost certainly have some litigation out of it,� said Arthur Walstedt, an assistant counsel for the county. “We’re almost bound to get sued by somebody who feels abused by it.�

The county’s two largest private landholders--the Irvine Co. and Santa Margarita Co.--also say their lawyers are studying the initiative, which would prohibit new homes or offices in areas where traffic does not move at an average rush-hour speed of 30 to 35 m.p.h. or where it takes more than one cycle to get through a traffic light.

The initiative campaign in Orange County and a similar one in neighboring Riverside County are a major reason for the builders’ new defense fund, but they aren’t the only reason, Willis said.

The Building Industry Legal Defense Foundation--BILD--will also sue local governments on behalf of members and furnish advice on lawsuits filed by members.

The trade group is urging members to use the foundation in disputes with City Hall, such as when they believe their land has been zoned unfairly or onerous developer fees have been charged.

That marks a change in strategy for the building industry, which has often been reluctant to alienate county and city officials by suing them.

There are several reasons, Willis said: As the amount of available land gets scarcer, the battles over how to zone it get more intense. And the industry is encouraged by several recent U.S. Supreme Court cases that favored property owners over governmental agencies in two land-use disputes.

Aim to Take Heat Off Individuals

And with the defense fund filing suit in key cases, the heat will be off individual builders and developers, says the trade group’s staff.

“The courtroom route is very long, very expensive and very difficult, and it’s impractical for many of our members,� said John Withers, director of governmental affairs for the trade group’s Orange County chapter. “It can tie up your project for months while the case goes through the courts.

“That’s why you’re seeing the trade association get involved.�

The Orange County chapter is already involved in a suit against the Newport-Mesa Unified School District alleging that the district is charging developers too much in fees.

The legal fund has amassed $100,000 from members of the trade group, Willis said, and has commitments for $100,000 more, with an eventual goal of $250,000. The trade group is also talking about affiliating with “a major law school� in Southern California, which Willis declined to name.

The increased emphasis on the courts is also a measure of how much is at stake in the battle over the slow-growth initiative. The building industry fears the initiative will drastically curtail all types of construction in Orange County.

But one lawyer wonders whether the building industry may be overemphasizing litigation and neglecting public relations.

“There’s a big school of thought that says this thing is not beatable at the polls, so let’s beat it in the courts,� said Newport Beach real estate lawyer John R. Simon, who also opposes the initiative.

And another lawyer--Belinda Blacketer of Laguna Beach, a leading supporter of the initiative--doubts the builders’ suits would be successful.

“It’s standard operating procedure. I don’t know of any initiative that’s been passed that hasn’t been challenged in court,� she said. “If I were in their shoes, I’d challenge it too, but I don’t expect anything to come of it.�