Property owners in this SLO County town can’t build homes due to lack of water, judge rules
A group of property owners in one San Luis Obispo County community can’t build homes on their lots due to a severe lack of water, a federal judge ruled recently.
U.S. Central California District Court Judge Dale S. Fischer made her ruling on Sept. 6 — dismissing a 2019 lawsuit filed by five landowners who claimed the Cambria Community Services District and San Luis Obispo County ruined any economic benefits from their Cambria properties by effectively refusing to allow them to develop homes.
The landowners — none of whom reside in California — alleged that the community services district and county wrongly deprived them access to water and sewer services, therefore denying their right to build on their properties.
The plaintiffs claimed the local governing bodies owed them at least $300,000 for each lot, according to the 2019 complaint.
The judge dismissed the lawsuit based on several factors — the main one being that the community services district simply does not have enough water to support new development.
“The shortage of water claimed by defendants is not a mere pretext to prevent growth, as suggested by plaintiffs,” Fischer wrote in her judgment. “There are legitimate public concerns about the ability of (the Cambria CSD) to continue to provide sufficient water consistently to its current users, let alone any significant number of new users.”
The judge also found that the property owners had all the available information that made clear the town’s water crisis and how it would impact future developments. Although the plaintiffs were aware of Cambria’s water and sewer connection wait list, which opened in 1986 and closed in 1990, none attempted to be added to it, Fischer wrote.
“The court finds that any investment-based expectation in an absolute right to water and sewer connections in Cambria — or to a development permit in the absence of such connections — was not objectively reasonable,” the judgment says.
Additionally, the judge found that even if the county and community services district had given the landowners water and sewer hookups to their properties, the California Coastal Commission would have likely denied them permits to build.
This was supported by the county and community services district in their closing brief in the court case.
“This case is not about any county regulation. This case is about the dire lack of water,” the brief read. “The reason why (the CSD) has been unable to issue intent to serve letters for new development is because Cambria is in a severe drought.
“The California Coastal Commission ... has repeatedly and forcefully decreed that it will not allow any single-family homes to be built on vacant, meter-less lots in Cambria — even if the owner has a (CSD) intent-to-serve letter for new water and sewer service — until the dire water shortage and drought improve.”
Jon Ansolabehere, counsel for San Luis Obispo County, said the county was happy with the judge’s decision.
Ansolabehere noted there’s a second, almost identical lawsuit currently in federal court filed by more than 80 owners of vacant lots in Cambria, which the county and community services district intend to file to dismiss soon.
Timothy Carmel, counsel for the Cambria Community Services District, said he expects the landowners in the first federal case to appeal the judge’s dismissal.
Court case highlights Cambria’s water crisis
The federal case highlights the debate at the heart of Cambria’s water crisis. As the North Coast community deals with the ongoing drought, landowners are demanding to develop their properties.
Cambria is currently in a Stage 3 water shortage warning, just one stage short of the point at which it can begin using its water reclamation facility to supply emergency water to its residents. That facility takes wastewater and salty water from deep underground, treats the water and then injects it back into the ground where it percolates and can later be pumped out by the community services district.
In addition to the federal lawsuits, two other lawsuits were filed in state court in May against the Coastal Commission by two separate Cambria property owners who allege they were wrongly denied permits to build homes on their vacant properties that had existing water meters.
The Coastal Commission has long defended its position to deny development permits in Cambria — saying it is necessary given the town’s water crisis. Any new water-using developments in Cambria would further stress the town’s limited supply, commission staff has maintained in past meetings.
“It’s the lack of an adequate water supply that is constraining development, not the lack of commission approval,” wrote Coastal Commission spokesperson Noaki Schwartz in an email Monday. “Solving a community’s water issues is beyond the commission’s jurisdiction and is something Cambria needs to work on with the county.
“This may mean a new source or upgrading wastewater treatment plant functions for water recycling/reuse/reinjection or it may mean partnering with nearby operators.”
North County communities differ on water issues
Cambria’s water woes are similar to those faced in Los Osos, 20 miles down the coast.
However, the tiny community of San Simeon to the north is in quite a different situation.
Previously, the San Simeon Community Services District had found it did not have sufficient water supply to feed a growing population. So, much like Cambria, it halted new water hookups.
Then San Simeon built a wastewater treatment plant and a reverse osmosis plant to clean dirty water from its wells, and implemented water conservation measures.
A March report by Akel Engineering Group Inc. found that the town now has more than enough water to supply new development.
In May, a San Simeon landowner settled a federal lawsuit against the San Simeon CSD and San Luis Obispo County, compelling the town to grant him a water hookup to his property after he alleged it was unjustly never considered.
Since then, the community services district has begun to seriously discuss lifting its nearly four-decade-old water hookup moratorium, possibly opening the door for new development in the coastal town.
This story was originally published September 14, 2022 at 8:00 AM.
CORRECTION: An earlier version of this story incorrectly identified U.S. Central California District Court Judge Dale S. Fischer as male. The error has been corrected.
