City of Patterson Can’t Use Water as a Pretext to Block Housing

Patterson, the city of 23,000 in California’s Central Valley, may be the Apricot Capital of the World, but it’s unlikely it will ever be called the Housing Capital of the World. While the city government is embracing distribution facilities for Amazon, it is dragging its feet on its legal obligations to approve more housing, resulting in years of delay and millions in wasted dollars.

But thanks in part to YIMBY Law, 719 new homes could be finally coming to the city.

Keystone is a development corporation started in 1979 that now works in seven states and five countries. In 2007, it bought a 95-acre property in Patterson on which it planned to build 719 units of housing, one-fifth of the city’s obligation under its Regional Housing Needs Assessment. The project, which it is calling Keystone Ranch, is made up of 506 single-family residential units and 213 multi-family residential units.

The project seemed to be moving forward when Patterson’s voters overwhelmingly approved an annexation plan, but that victory was short lived. On the surface, the city’s concern is water supplies. But the real story is very different.

In 2014, the state of California passed a package of laws that required cities to prepare groundwater sustainability plans by 2020. When Patterson submitted its plan, the state’s Department of Water Resources rejected it. So Patterson prepared a new plan in 2024, which among other things requires all new development projects to provide a source of surface water to meet the demands of their project. 

The city did not attach those conditions to a new 3.2 million square-foot Amazon distribution center that it approved in June 2025. So even though that facility brings an estimated 1,800 employees to work, Patterson did not require offsetting surface water purchases or the construction of any water infrastructure. 

But when Keystone Ranch came before the city’s planning commission in February 2025, suddenly water was an issue. 

Although the planning commission approved the project, it added 159 new conditions, including a requirement that Keystone first build a recharge basin — an artificial pond — before building permits for the housing would be approved. That condition was added as part of a settlement between the city and two local water districts, but it’s no small task: The basin is estimated to cost $20 million and could take up to five years to complete, money and effort that Keystone would be forced to spend even though an environmental impact report found that the city’s water supplies would be sufficient to support the project. As Keystone’s attorney said at the hearing, the city was adding an onerous new condition after years of work: “It’s just not fair to have the rules of the game change this late in the process.”

In April 2025, the city council took an even more drastic step, denying the project altogether. Following the vote, Keystone filed suit against the city. And that’s where YIMBY Law stepped in.

In January 2026, we filed an amicus brief supporting Keystone, arguing that this case presented a clear example of a city using bad faith and contradictory logic to block a housing project that it has already counted toward its state housing obligations. By conditioning approval on Keystone’s construction of the recharge basin, Patterson imposed a moratorium on new housing, and effectively denied construction in violation of the Housing Accountability Act and the Housing Crisis Act of 2019. 

As we wrote in the brief, and reiterated in letters to the city and HCD, the basin was a pretext for the city to deny housing. The actual cause was that the city council was upset that Keystone was asserting its rights under state law: “The real reason for the denial was that the City was upset that Petitioner submitted an SB 330 application in the first place, which allows a developer to ‘freeze’ the applicable fees and development standards that apply to a project upon submittal of a preliminary application.”

Since then, Keystone has been racking up legal victories. In January, the court ruled that the city could not collect the development fees it had planned to charge. And in February, the court issued a tentative ruling finding, ruled that the project could move forward without the recharge basin condition, saying that the city violated the Housing Accountability Act and must approve the project.

As the former mayor of Patterson said in a recent letter to the editor, it’s all enough to make you wonder about the legal advice that the city is receiving. “The City of Patterson needs new legal representation,” said Pat Maisetti. 

I don’t know if that’s true, but I do know that thanks in part to YIMBY Law’s work, the city will be getting much-needed new housing.