Michael Burry Sues California City Over Wildfire Risk of Housing Project

Investor Michael Burry, renowned for his prescient bet against the subprime mortgage market depicted in 'The Big Short,' is taking legal action against the City of Saratoga, California. Burry, through his non-profit Citizens for Responsible and Equitable Development (CRED), has filed a lawsuit challenging the city's approval of Masson Estates, a proposed 25-unit housing development.

The core of the legal challenge centers on the development's location on Pierce Road, which is identified as a state-designated 'Very High Fire Hazard Severity Zone.' CRED's petition, filed in Santa Clara County Superior Court on September 17, contends that adding approximately 70 new residents to this area poses a significant danger due to inadequate emergency access and evacuation routes in the event of a wildfire.

According to project documents, the Masson Estates development is planned for a 72.45-acre wooded site at 14791 Pierce Road. The project includes plans for single-family homes ranging from 2,375 to 7,723 square feet, situated on lots between 2,086 and 86,351 square feet. Site improvements such as roads and public utilities would be concentrated on roughly 18 acres of the northern portion of the property. The development also involves the removal of nearly 367 of the site's 682 protected trees, approximately 53% of the total.

Burry has stated that the project's approval appears to have relied on the 'builder's remedy,' a provision that allows developers to bypass local zoning laws if at least 20% of the housing units are designated as affordable. He voiced concerns in a September 23 Substack post that the city council might have approved the project out of fear of legal repercussions from the state Housing and Community Development department, despite evidence of public health and safety hazards.

The City Council's approval followed a denial by the Planning Commission on July 8. The commission had cited concerns about emergency access and evacuation impacts, stating that the project's benefits did not outweigh these risks. However, the City Council granted the developer's appeal and approved the project on August 19, certifying the Environmental Impact Report. Both votes by the council were reportedly unanimous.

CRED's lawsuit argues that the council's decision overlooked substantial evidence of risks to public health and safety. The petition further asserts that claimed benefits, such as providing housing, a public trail, and a retaining wall, are insufficient to justify the documented risks to life.

A hearing for the lawsuit is anticipated in January 2027. This opposition echoes concerns raised earlier by the Loma Prieta Chapter of the Sierra Club, which launched an electronic petition in August urging the city to reverse its decision on similar grounds regarding safety and environmental impact.