The Man That Terrifies California Cities | Leo Pustilnikov

Here is a detailed, transcript-style summary of the "The Man That Terrifies California Cities | Leo Pustilnikov" episode of "No Vacancy with Taylor Avakian."

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**No Vacancy with Taylor Avakian**

**Episode: The Man That Terrifies California Cities | Leo Pustilnikov**

**[00:00] Taylor Avakian:** Welcome back to No Vacancy, the podcast dedicated to all things LA multifamily. Today, we have a truly special and, frankly, vital guest joining us: Leo Pustilnikov. Leo is a name that resonates deeply within California's housing landscape, often at the center of some of the most contentious battles for housing reform. He's known for going head-to-head with powerful cities, unions, and politicians, leveraging state pro-housing policies to push projects forward. Leo, thank you so much for joining us.

**[00:45] Leo Pustilnikov:** Taylor, it's a pleasure to be here. Thanks for having me.

**[00:50] Taylor Avakian:** Leo, your reputation precedes you. You're often described as one of the most controversial and influential developers in California. For those who might not be intimately familiar with your work, can you give us a brief overview of what you do and why you've become such a central figure in the statewide housing reform battle?

**[01:15] Leo Pustilnikov:** Absolutely. My firm and I are primarily focused on developing housing in California, particularly multifamily. But what makes us unique, perhaps controversial, is our approach. We've embraced and actively utilize state-level housing laws – things like the Builder's Remedy, SB 9, SB 35, and the Density Bonus Law – to overcome the often illegal and obstructive tactics employed by local municipalities. We're essentially forcing cities to comply with state mandates to build more housing, which, as you can imagine, doesn't always make us popular with local governments or NIMBY groups.

**[01:55] Taylor Avakian:** That's really the crux of it, isn't it? You're using the law as intended to address a massive crisis, yet you face immense pushback. Let's dive right into that. In your experience, why do California cities block housing, despite the undeniable need and the state's clear directives?

**[02:15] Leo Pustilnikov:** It's multifaceted, but it boils down to a few core issues. Firstly, local control. Cities cherish their autonomy, and state mandates feel like an infringement. They want to dictate what gets built, where, and often, *if* it gets built at all. Secondly, it's political. Existing homeowners, often referred to as NIMBYs – "Not In My Backyard" – are a powerful voting bloc. They fear increased traffic, changes to neighborhood character, and potential impacts on property values, however unfounded those fears may be. Local politicians cater to these voices to stay in office. And then, there's often a more insidious element: corruption. Whether it's direct financial incentives or simply the desire to maintain a certain status quo that benefits existing power structures, some cities actively resist housing for reasons that aren't about good planning, but about self-interest.

**[03:10] Taylor Avakian:** You mentioned state laws overriding local resistance. The Builder's Remedy is a tool that has gained significant attention recently. Can you explain how it actually works and why it's such a powerful mechanism for developers like yourself?

**[03:25] Leo Pustilnikov:** The Builder's Remedy is incredibly potent because it essentially strips a city of its ability to deny a housing project if that city is out of compliance with its Housing Element. Every city in California is required to have a state-certified Housing Element, which is a plan for how it will meet its share of regional housing needs. If a city's Housing Element isn't certified – meaning they haven't adequately planned for housing – then under the Housing Accountability Act, a developer can propose a project that includes at least 20% affordable units, and the city generally *must* approve it, regardless of local zoning or general plan inconsistencies. It bypasses discretionary review. It's a blunt instrument, but it's designed to force cities to take their housing obligations seriously. We've seen cities scrambling to get their Housing Elements certified precisely because of the threat of the Builder's Remedy.

**[04:25] Taylor Avakian:** That's a game-changer. It sounds like it's designed to cut through the red tape and political maneuvering you described. But even with such powerful tools, you still face immense opposition. You've spoken about cities illegally blocking projects. Can you give us some examples of the tactics they employ?

**[04:45] Leo Pustilnikov:** Oh, the creativity is endless. Cities will use every trick in the book. They'll declare projects "incomplete" for trivial reasons, sometimes for months or even years, effectively delaying the process indefinitely. They'll demand studies that are outside the scope of what's legally required. They'll misinterpret state law, claiming exemptions or requirements that simply don't exist. They'll try to impose conditions that make a project financially unfeasible. And then, of course, there's the weaponization of CEQA, the California Environmental Quality Act.

**[05:25] Taylor Avakian:** Ah, CEQA. That's a topic that comes up frequently in these discussions. How is CEQA abused, and what should developers understand about navigating it as part of their entitlement strategy?