‘Big Short’ Investor Sues to Halt ‘Dangerous’ Subdivision in California Wildfire Zone

A well-known investor is leading the charge against a California city’s plans for a new housing development in the hills surrounding Saratoga, California.

Dr. Michael Burry, who made his name and his fortune from correctly predicting the 2008 housing collapse, contends the development poses a significant wildfire risk, Realtor.com reported.

A new lawsuit led by Burry claims the planned Masson Estates development would be built in a high-risk fire hazard zone. The suit alleges that further development there would put the community’s already congested evacuation roads at risk of overloading in a disaster.

Burry’s hedge fund Scion Capital netted roughly $800 million during the subprime mortgage crisis by buying credit default swaps, $100 million of which went directly to Burry, Realtor.com noted. The 2015 movie “The Big Short” prominently features Burry as a character, with Academy Award-winning actor Christian Bale portraying the investor.

Monitors Local Housing Laws

Burry closed the hedge fund in 2025, and since then, he has taken the mantle at Citizens for Responsible and Equitable Development (CRED), a volunteer-run nonprofit that monitors local housing laws, according to Realtor.com.

CRED recently filed a petition with the Superior Court of California urging local lawmakers to cancel Masson Estates, a planned development consisting of 20 market-rate and five affordable housing homes.

Realtor.com noted that in July, the city’s planning commission unanimously rejected the proposal, saying the development presented significant environmental risks.

A month later, however, the Saratoga City Council unanimously voted for the project, Realtor.com reported. One board member noted that “approving this project does not mean we dismiss the fire and evacuation concerns raised by our residents.”

At the center of the dispute is a narrow, winding, two-lane mountain route called Pierce Road that has steep grades and blind curves.

Realtor.com said the issue may be particularly personal for Burry.

Burry’s House in in Area

According to records reviewed by Realtor.com, his six-bedroom, 6,300-square-foot home, which he bought in 2004 for $3.7 million, sits near the base of Pierce Road.

In the lawsuit, Burry cites an evacuation study conducted in May 2027 by the consulting firm Fehr and Peers that found that Pierce Road already fails to handle baseline evacuation demands.

The study found that residents would require five hours to evacuate the area during a fire, Realtor.com noted, while a fast-moving blaze could consume the zone in just four hours.

The study also projected that adding Masson Estates would stretch evacuation times by an estimated 30 minutes, a 13% increase over baseline that transit and safety experts warn could leave fleeing motorists trapped.

“The delay directly increases the likelihood of vehicles becoming trapped on constrained corridors like Pierce Road, creating a critical life-safety hazard,” traffic and evacuation experts KLD noted in their independent review of the project data.

‘Builder’s Remedy’

In its lawsuit, CRED contends that the city’s approval violates the California Environmental Quality Act by failing to adequately mitigate wildfire evacuation threats. Also, the lawsuit argues the project violates the Subdivision Map Act, which mandates denying subdivisions likely to cause serious public health or safety problems.

In a recent Substack post, Burry argued the Masson Estates project was only being built thanks to a “builder’s remedy” loophole that allows a developer to bypass local zoning rules if they promise to build at least 20% of their inventory as “affordable housing.”

The Masson Estates had said that five of the 25 homes qualify as “affordable housing” based on local incomes. But in an area where the median family income exceeds $200,000, Burry argued, that term is almost meaningless.

“State law defines the [affordable] tier as ‘lower-income households,’ which is up to 80% of area median income. The median family income in the San Jose/Sunnyvale/Santa Clara metro area is $205,500,” Burry wrote.

Based on Burry’s calculations, in the context of wealthy Saratoga County, those “affordable” homes likely would be priced in the $3 million to $4 million range. Last month, the median listing price for homes in ZIP code 95070, which covers Saratoga, was $3.9 million, according to Realtor.com listing data.

Hearing in January

Burry and his group are not the only ones protesting the planned development, Realtor.com noted. The Loma Prieta Chapter of the Sierra Club issued an electronic petition in August, urging the local government to reverse its decision on the same grounds that Burry’s group cites.

A hearing on the lawsuit is set for January 2027, Realtor.com reported.

The city of Saratoga said that it could not comment on pending litigation.