The Superior Court of San Luis Obispo County gave the city and its nonprofit partner, Smart Share Housing Solutions, legal permission to proceed with an affordable housing project. The Waterman Village Housing Project, at the Rosa Butrón Adobe site on Dana Street, was delayed for two years due to a lawsuit.
The City’s Cultural Heritage Committee, Architectural Review Commission and Planning Commission endorsed the project and the City Council upheld the project in March 2025. However, the San Luis Obispo Property and Business Owners Association and organizer Leslie Hall filed a lawsuit against the City of San Luis Obispo.
The suit claimed the City could only build a park at the property and broke a condition from the original 1989 donor deed of the land.
The Superior Court rejected the lawsuit’s claims and fully dismissed the case because of the deed’s expiration and because the deed to the land did not legally bind the City to use the land exclusively for park or recreational purposes.
“We are thrilled to get out of the courtroom and continue working alongside the City and hundreds of local volunteers and donors to welcome community into every front door of the Waterman Village,” Anne Wyatt, executive director of Smart Share Housing Solutions, wrote in the City’s press release.
The project will create 20 homes for low-income San Luis Obispo community members with sizes between 220 and 264 square feet, according to the city’s press release.
The units will be all-electric with solar generating capacity added to meet or exceed California codes. They are approved for low and very-low income households. Under California’s 2026 income designations, a one-person household in San Luis Obispo County can earn up to $85,700 and still qualify as low-income, while the very-low-income threshold is $53,500. The final eligibility rules may vary by unit and household size.
Courtesy of Hunter Smith Architecture
The income of potential residents of the housing project will need to be less than designated maximums, and possible occupants need to apply and pass a screening process, according to the Smart Share Housing Solutions website.
“We are steadfastly committed to fighting, and winning, for the many community members who work hard but still struggle with housing affordability. Our City Council’s support, and this Court decision, honors them and our non-profit partners who serve San Luis Obispo and make positive contributions for our community,” City Attorney Christine Dietrick wrote in the city’s press release.
The project will also reinvigorate the historic Rosa Butrón Adobe site by preserving most of the existing mature trees in the area and creating a publicly accessible, park-like space for community use, according to the city’s press release.
The building, also known as the Canet Adobe, is one of the oldest in San Luis Obispo County having been built in 1845. In the 1850s and early 1860s, community members would attach legal notices to the wall of the building for lack of a local newspaper.
Smart Share said they are confident that the housing project will honor the wishes of Mary Gail Black, who donated the property alongside her partner in 1989, and embodies their preservationist spirits, according to Wyatt.
Courtesy of Hunter Smith Architecture
Following the ruling, the City can legally proceed with the project, and Smart Share Housing Solutions can continue fundraising, finalizing the long-term lease agreement with the City and obtaining building permits.