California courts deal major blow to 3,000-home development project

SAN DIEGO (CN) — A massive housing development project in the city of Santee, California, is in peril after two different judges in two separate courts ruled in favor of environmental groups who are opposed to the project.

The Fanita Ranch project has been rigorously challenged by Santee residents and environmental groups since it was first proposed in 2017 by developer HomeFed.

But opponents of the project said that the city has repeatedly and blatantly violated its own regulations, as well as state zoning and environmental regulations.

A San Diego Superior Court judge and an appellate court panel both rejected approvals for the Fanita Ranch project in two separate but related cases on Thursday.

Attorney John Buse, of the Center for Biological Diversity, said that the decisions should send a strong message to the city of Santee.

“Poorly planned projects that increase wildfire risks can no longer be justified given our climate reality,” Buse said in a written statement to Courthouse News. “The latest court opinions are a strong rebuke against cities and developers who try to skirt the state’s zoning and environmental laws.”

The Center for Biological Diversity says that Fanita Ranch is located in a very high fire hazard severity zone, which is the highest risk designation in California. Additionally, the site is home to numerous sensitive insect species, such as the Quino checkerspot butterfly, California gnatcatcher and Crotch’s bumble bee.

“San Diego County deserves safe and sustainable development,” Buse said. “I’m hopeful this finally puts an end to Fanita Ranch.”

The project was slated to develop a little more than 3,000 housing units across 2,600 acres of land in northern Santee, about 15 miles northeast of San Diego. In addition to housing, the project was slated to include a school, 80,000 square feet of commercial space, as well as parks and open spaces.

Although the city’s general plan only allowed for 1,395 housing units in the Fanita Ranch area, the city adopted an amendment in 2020 to more than double the amount of housing. However, the amendment was immediately challenged after citizens filed a petition for a referendum.

Santee citizens also approved a ballot initiative in November that year to require approval for any development that would increase residential density more than what the general plan allows.

But in 2021, the city created another workaround. It adopted an ordinance to create its Essential Housing Program, which would approve certain projects certified by the city with no public hearing. After HomeFed submitted a plan the courts determined was essentially identical to the previous project, it was deemed an Essential Housing Project in 2022 and approved.

The plaintiffs sued the city and HomeFed for violations of California planning and zoning laws, the California Environmental Quality Act, and the state elections code. San Diego Superior Court Judge Katherine Bacal agreed that the city violated all four laws.

HomeFed appealed the decision, but the Court of Appeal mostly affirmed Bacal’s decision.

The appellate court found that the city’s Essential Housing Program deemed projects consistent with its general plan based on a point system instead of an actual analysis of the development requirements in the plan.

“Instead, the city simply ‘deemed’ the 2022 project consistent because it was certified as an Essential Housing Project under criteria that are different from the policies and mandates set out in the general Plan,” California Court of Appeal Fourth District Associate Justice Truc Do wrote. “Beyond this, both the city and HomeFed have essentially conceded that the proposed development in the 2022 project lacks consistency with the general plan.”

Do was joined by Fourth District Associate Justice Julia Kelety and Fourth District Associate Justice David Rubin.

In a separate but related case in San Diego Superior Court, also presided over by Bacal, the plaintiffs also sued the city of Santee. The plaintiffs say the city failed to analyze the project’s CEQA impacts in light of the 2025 Palisades Fire, improperly approved density bonus incentives and approved a project that conflicts with the city’s general plan.

Although Bacal did not grant the plaintiffs’ CEQA claims, she ruled in their favor on the remaining land-use claims.

Buse said he was very pleased with both the appellate decision and Superior Court ruling.

“It’s up to the developers how they want to move forward on a project that has been repeatedly denied by the court,” Buse said. “But if there’s a future version of Fanita Ranch that violates local and state laws, then we’ll likely continue to challenge it.”

Neither HomeFed nor the city of Santee immediately responded to requests for comment.