Michael Burry, in his capacity as president of a residents' group, has applied for an injunction in a California court to stop the construction of 25 homes on the Saratoga hillside. The project is located uphill from his residence and includes 5 units of lower-income housing.

The plaintiffs are Citizens for Responsible and Equitable Development, who filed a lawsuit on September 17 in the Santa Clara County Superior Court against the city council's approval of Masson Estates. The planning commission rejected the case on July 8, but after the developer appealed, the city council approved it in August and certified the environmental impact report. The group claims both votes were unanimous. The lawsuit alleges that the report did not adequately analyze the potential scenarios triggered by the project and states that some council members indicated in the records that the approval was motivated by fears of legal retaliation from the state Department of Housing and Community Development.

The project is located at 14791 Pierce Road, near Mountain Winery, on a parcel of approximately 72.45 acres, with homes and roads concentrated on about 18 acres on the north side. There are also claims that it is built on 25 acres of the 72-acre parcel. The plan includes 20 market-rate units and 5 affordable units. The city government estimates an increase of about 70 residents based on an average of 2.79 people per household, all of whom would need to evacuate via Pierce Road during wildfires. This road is classified by the state as a very high fire hazard severity zone.

Burry attributed the approval to the builder’s remedy in a public article on September 23: when local housing elements are non-compliant, as long as at least 20% of the units are designated as affordable, developers can bypass local zoning. The 5 affordable units represent exactly 20% of the 25 units. He noted that state law defines lower-income as 80% of the area median income; the median household income for the San Jose, Sunnyvale, and Santa Clara metro area is $205,500, making this affordable tier limited in local significance.

This is not a short sale of housing mortgages. The buyer aims to build homes on the approved site and use the 5 affordable units to access the state law pathway; the seller seeks to have the court revoke the approval to preserve the evacuation capacity for uphill residents on Pierce Road. The event is driven by the injunction application, with no funds changing hands. The beneficiaries would be the existing residents who would not see an additional 70 evacuees if the injunction is granted; the pressure is on the 25-unit project that has already gone through appeals and relies on the builder’s remedy, as well as the state housing department that pushes local approvals under compliance pressure. The 5 affordable units are also included in the same injunction.

Source: Public Information