This post was authored by Alan Murphy of Perkins Coie LLP and first appeared on the Perkins Coie website here: https://www.perkinscoie.com/en/news-insights/california-law-limiting-ability-of-local-governments-to-deny-housing-development-applications-upheld.html

In a major recent decision, the California Court of Appeal rejected a city’s interpretation of what constitutes an “objective” standard under the Housing Accountability Act (HAA), Government Code section 65589.5, and upheld the constitutionality of the law and amendments that strengthened it.[1] The opinion in California Renters Legal Advocacy and Education Fund v. City of San Mateo reinforces and upholds significant limitations imposed by the HAA on local consideration of housing development applications.

The HAA tightly restricts a local government’s ability to disapprove a proposed housing development that “complies with applicable, objective general plan, zoning, and subdivision standards and criteria, including design review standards.” In 2017, the California Legislature passed the first of several packages of bills designed to increase housing supply by, among other approaches, strengthening the HAA. One of the 2017 bills bolstered the HAA’s objective standards restriction by adding subdivision (f)(4) to Government Code section 65589.5. This subdivision provides that a housing development project is deemed to comply with an applicable standard if “substantial evidence … would allow a reasonable person to conclude” that it does.

In California Renters, the City of San Mateo (City) denied an application to construct a four-story, ten-unit multifamily residential building. The court first concluded that the City’s denial of the project failed to comply with the HAA. The court then considered and rejected arguments that subdivision (f)(4) was unconstitutional and, in the process, held that the HAA, as a whole, did not impermissibly infringe on charter cities’ rights to control their own municipal affairs.

Compliance With “Objective” Standards

In denying the development application, the City made findings that the project failed to comply with adopted design guidelines. Yet the court determined that the relevant guidelines were not objective standards under the HAA due to their ambiguous language and lack of specificity, and, therefore, could not support disapproval of the housing project.

The guidelines provided that “a transition or step in height is necessary” if the height of adjacent buildings varies by more than one story. According to the City, a two-story differential between the proposed structure and adjacent single-family dwellings required a “stepback” in building height to comply with the guidelines.

The court determined that objective standards under the HAA do not include those that require “personal interpretation” or “subjective judgment,” and the court held that these design guidelines failed this test. The guidelines were unclear, the court determined, as to whether a stepback in height was required or, alternatively, if a “transition” in height provided by the project’s large trees and trellises could be sufficient. Further, to the extent the guidelines required a stepback in height, they failed to specify how extensive that stepback must be.

Constitutionality of the HAA

The court next upheld the constitutionality of the HAA against three arguments raised by the City. In its most significant ruling, the court disagreed with the City that the HAA and its amendments infringed on the City’s right to “home rule,” or control of its own municipal affairs as a charter city. Citing legislative findings and the HAA’s express purpose of ameliorating the housing crisis, the court concluded that the HAA “patently addresses a matter of statewide concern”—increasing the state’s housing supply. Further, the court held, the HAA is “narrowly tailored” to avoid unnecessary interference in local governance. While the HAA limits local agencies’ ability to reject new housing based on subjective criteria, the law leaves them free to establish compliant objective policies and development standards to meet local needs.

The court also rejected the City’s contentions that subdivision (f)(4) of the HAA unconstitutionally delegates municipal functions and violates the due process rights of neighboring landowners. The court reasoned that the new statutory provision does not cede municipal authority to private persons, nor does it prevent neighbors from having a meaningful opportunity to be heard.

Conclusion

For the second time this year, the Court of Appeal both has rejected a charter city’s interpretation of a key state housing law and has upheld the law’s constitutionality against a “home rule” challenge. The California Renters court echoed the reasoning the court adopted in April when it upheld Senate Bill 35 streamlining against similar challenges. Together, the decisions demonstrate a continued recognition by the courts that all local governments must comply with state housing law.

California Renters Legal Advocacy and Education Fund v. City of San Mateo, Nos. A159320, A159658 (1st Dist. Sept. 10, 2021).

Posted by: Patricia Salkin | September 16, 2021

CA Governor Signs New Laws Designed to Combat Affordable Housing Crisis

The following is excerpted from Governor Newsome’s September 16, 2021 Press release:

The Governor today signed California State Senate President pro Tempore Toni G. Atkins’ SB 9, the California Housing Opportunity and More Efficiency (HOME) Act, which the White House this month commended to increase housing supply. The HOME Act facilitates the process for homeowners to build a duplex or split their current residential lot, expanding housing options for people of all incomes that will create more opportunities for homeowners to add units on their existing properties. It includes provisions to prevent the displacement of existing renters and protect historic districts, fire-prone areas and environmental quality.

“I appreciate Governor Newsom’s continued commitment to solving one of the most vexing issues facing our state – increasing the amount of housing and widening access for more Californians,” said Senate Pro Tem Atkins (D-San Diego). “SB 9 will open up opportunities for homeowners to help ease our state’s housing shortage, while still protecting tenants from displacement. And it will help our communities welcome new families to the neighborhood and enable more folks to set foot on the path to buying their first home. I’m grateful for the Governor’s partnership, and our shared determination to turn the corner on California’s housing crisis.”

SB 10 by Senator Scott Wiener (D-San Francisco) creates a voluntary process for local governments to access a streamlined zoning process for new multi-unit housing near transit or in urban infill areas, with up to 10 units per parcel. The legislation simplifies the CEQA requirements for upzoning, giving local leaders another tool to voluntarily increase density and provide affordable rental opportunities to more Californians.

“California’s severe housing shortage is badly damaging our state, and we need many approaches to tackle it,” said Senator Wiener. “SB 10 provides one important approach: making it dramatically easier and faster for cities to zone for more housing. It shouldn’t take five or 10 years for cities to re-zone, and SB 10 gives cities a powerful new tool to get the job done quickly. I want to thank the Governor for signing this essential bill and for continuing to lead on housing.”

A signing message for SB 10 can be found here.

The Governor also signed SB 8 by Senator Nancy Skinner (D-Berkeley), which extends the provisions of the Housing Crisis Act of 2019 through 2030. The Housing Crisis Act of 2019, which was scheduled to expire in 2025, accelerates the approval process for housing projects, curtails local governments’ ability to downzone and limits fee increases on housing applications, among other key accountability provisions.

“California needs more housing, and we need it now,” said Senator Skinner. “Thank you, Governor Newsom, for signing these bills that will enable homeowners and our communities to add much-needed and affordable housing efficiently and without delay. Housing close to jobs, schools and services helps our housing shortage, and is essential to meeting California’s greenhouse gas reduction goals.”

“For too long, California has kicked the can down the road when it came to building more housing,” said San Francisco Mayor London Breed.  “The housing crisis is at the center of our state’s biggest challenges – with our children and our most vulnerable bearing the brunt of sky-high costs and a severe shortage of housing inventory. Thankfully, Governor Newsom and our legislative leaders are taking bold action to address this shortage with a smart, targeted housing packing that will allow our communities to grow with inclusion and expand the dream of home ownership and housing stability to people across California.”

“Senate Bills 8, 9 and 10 will give California and its cities new tools to build housing that enhances communities and expands opportunities for working families,” said San Diego Mayor Todd Gloria. “Together, they will increase housing options for middle- and working-class Californians while slowing the rate of rent hikes as supply grows. I am grateful to Governor Newsom and our legislative leaders for their steadfast commitment to tackling the state’s housing-affordability crisis.”

Governor Newsom also signed AB 1174, by Assemblymember Tim Grayson (D-Concord), an urgency measure that makes changes to the existing streamlined, ministerial approval process for housing development in jurisdictions that have not yet made enough progress towards their allocation of their regional housing needs.

“Most Californians can’t afford a typical single-family home and our state’s desperately limited housing stock has a lot to do with it,” said President and CEO of the California Building Industry Association Dan Dunmoyer. “This suite of bills will ease some of the obstacles to home construction and help combat the already record-high cost of housing in our state. I am grateful to Governor Newsom and legislative leaders for their courage to enact policies that support the construction of low- and middle-income homes with the goal of providing attainable, secure housing for all.”

Another pillar of Governor Newsom’s housing agenda is housing accountability for local governments. Governor Newsom this week lauded the Attorney General’s recent success in defending the validity of California’s Housing Accountability Act (the “anti-NIMBY law”) from challenge in California Renters Legal Advocacy and Education Fund v. City of San Mateo. Last year, the Governor asked the Attorney General to intervene in the case to defend this critical tool for holding local governments accountable for doing their part to increase housing supply. The resulting appellate court decision curbs the ability of local governments to block new housing that is supposed to be allowed under their own existing rules and general plan.

During his first month in office, Governor Newsom approved first-of-its-kind legal action against a city for standing in the way of affordable housing production and refusing to meet regional housing needs. In his 2019 State of the State Address, the Governor called for expedited CEQA review to include housing, as under legislation he signed earlier this year to allow smaller housing projects to qualify for streamlining.

This post was authored by Matthew Loescher, Esq.

These cases stemmed from a grant of a development order by Walton County to Ashwood. The order allowed Ashwood to build a new planned unit development (“PUD”) known as Cypress Lake. Cypress Lake was to consist of one hundred forty-one residential units, which would be divided into eighty-five single-family houses, forty duplex units, and sixteen condominium units. The PUD also included fifty-three thousand square feet of commercial space divided among four mixed-use buildings. The land to be developed abuts Walton County Highway 30-A on one side, and Topsail Hill Preserve State Park, a conservation zone, on at least one other. Appellants asserted that the development order approving the Cypress Lake PUD materially altered the designated land use, density, and intensity of use for the parcel where the PUD would be located. They claimed that this order was inconsistent with the county’s comprehensive development plan in a variety of ways. They sought to invalidate the development order and stop Cypress Lake from being constructed as proposed.

Here, there was no dispute here that Walton County’s approval of the Cypress Lake PUD was a “development order” that materially altered the use, density, and intensity of property. As such, the trial court should have considered all of the appellants’ claims of inconsistency, even those that did not strictly relate to density and intensity. Since it failed to do so, the court reversed the judgment as to the consistency of Walton County’s action on the Cypress Lake PUD order and remanded for the trial court to consider the inconsistency claims it previously determined to be “not relevant.”

The court next addressed SWCC’s appeal of the trial court’s determination that it lacked standing to sue under section 163.3215(2). The evidence reflected that SWCC was a non-profit corporation with its principal place of business in Walton County, founded “to foster, protect, and enhance the character and welfare of the neighborhoods and communities in the area … known generally as South Walton County.” Nevertheless, the trial court concluded SWCC did not have standing because it “failed to establish that it possesses any interest in the Cypress Lake PUD project beyond that shared by all persons.” The court noted on appeal that SWCC operates as a “watchdog” group, engaged in activities to protect environmental interests now alleged to be adversely affected by a supposed violation of the comprehensive plan. Thus, by its activities, SWCC showed it is more animated or motivated by an affected interest protected by the plan than the average member of the public.

As a final matter, the court reversed the amended final judgment for costs, which was rendered in favor of Ashwood and is on appeal in Case Number 19-1530. Since the court reversed the final judgment and remanded this case for further proceedings, there no longer was a prevailing party for the purpose of taxing costs.

Imhof v Walton County, FL, 2021 WL 4189197 (FL App. 9/15/2021)

This post was authored by Matthew Loescher, Esq.

Plaintiff Evans Creek, LLC, alleged that Defendant City of Reno violated the Fifth Amendment’s Takings Clause and the Fourteenth Amendment’s Equal Protection Clause by preventing it from developing land formerly known as the Ballardini Ranch in southwest Reno. The City expressed various concerns in response to Plaintiff’s previous annexation applications, including the City’s “desire to maintain open space,” the risk of exacerbating “the shortage of neighborhood parks,” “deficiencies in emergency access to nearby subdivisions,” that development “may cause harm to unidentified and unknown archaeological sites on the property,” that development “would create an annexation island of non-contiguous City property,” and that development would “overburden Washoe County School District. Plaintiff alleges that the City’s refusal to grant annexation wholly deprived the property of any viable commercial use. Plaintiff further claimed that it was treated differently from other developers because it was not aware of any other instance in which the City had similarly denied an annexation request.

In this case, Plaintiff contended it was intentionally discriminated against because the 2020 Application was the only annexation application submitted pursuant to NRS § 268.670 the City ever denied. The Complaint did not allege any facts about the other annexation applications or land, or how the City’s decision to approve the other annexations differed from its decision to deny the 2020 Application. Instead, Plaintiff simply made a conclusory allegation the City routinely grants annexation applications “irrespective of the characteristics of the subject properties” when the Complaint lacked any facts to support such an assertion. As pleaded, the Complaint lacked factual support to plausibly allege that Plaintiff was similarly situated to all other property owners in Washoe County who applied for annexation.

Plaintiff next claimed that denying the 2020 Application constituted a regulatory taking. The City argued that Plaintiff’s claim was not ripe because the denial was not a “final decision” about the use of the Property. The court noted that the Supreme Court rejected that takings claims brought under §1983 have an implicit administrative exhaustion requirement. Pakdel, 141 S. Ct. at 2230. Thus, requiring Plaintiff to take further action to exclude the property from the SOI would create an exhaustion requirement analogous to what the Supreme Court rejected in Pakdel.

The record indicated that the City had already denied the 2003 Application, and circumstances surrounding the 2002 Application and 2014 Application made Plaintiff to believe they would be unsuccessful. Accordingly, as pleaded, the Complaint did not adequately allege that Plaintiff reasonably believed the 2020 Application’s approval was reasonably probable. Moreover, as pleaded, the Complaint lacked any information about the value of the property when the 2020 Application was submitted or its value after the 2020 Application was denied. Without this information, the court found that is was not possible to determine what the economic impact to the property was, even taking the allegations in the Complaint as true.

Evans Creek, LLC v City of Reno, 2021 WL 4173919 (D. NV 9/14/2021)

This post was authored by Matthew Loescher, Esq,

Relators, Lana Pennington, Holly Pennington, Cynthia McIntire, Lisa Cotterman, and Anna Miller, the five members of a petition committee, sought a writ of mandamus ordering respondent Whitehall City Attorney Michael T. Bivens or respondent Whitehall City Council to certify the sufficiency of a referendum petition for the rejection or approval of a zoning ordinance in the city of Whitehall. The petitioners also sought to compel the city council to submit the petition to Whitehall’s electors at the November 2, 2021 general election.


The court first noted that Section 14 of the charter states that “ordinances and resolutions adopted by Council shall be subject to referendum to the extent and in the manner provided in the Charter.” This language makes the default procedures established in R.C. 731.28 through 731.41 inapplicable to the city of Whitehall, because only the charter provides the manner for circulating referendum petitions. Furthermore, the charter does not impose any requirement to submit to the city auditor the ordinance that the petitioner sought to refer to the people, but instead the process in the charter provides for referendum petitions to be filed with the city attorney after they have been circulated. Thus, the court found that Bivens abused his discretion in determining that the petitioners’ referendum petition was insufficient because they had not complied with R.C. 731.32.


Respondents next contended that the court should deny the writ based on the doctrine of laches, criticizing the petitioners’ 21-day delay in bringing this mandamus action. Since there was time to decide this case on the merits without impeding the Franklin County Board of Elections in its duty to prepare and mail absentee ballots, the purpose of S.Ct.Prac.R. 12.08 “to give the Supreme Court adequate time for full consideration of the case” was found to have been satisfied, notwithstanding any delay in the filing of the action. Accordingly, the court granted a writ of mandamus to compel Bivens to certify forthwith the sufficiency of the petition to the clerk of the city council so that council may refer the zoning amendment to the electors at the November 2, 2021 general election.


Pennington v Bivens, 2021 WL 4145035 (OH 9/13/2021)

This a good year to check out the 35th Annual National Land Use Institite, hosting by the Jacob D. Fuchsberg Touro Law Center’s Land Use and Sustainable Development Institute. The 4 half-day programs will take place on October 19, 20, 26 and 27. The full conference brochure is linked below. Sponsors include the American Bar Association’s State and Local Government Law Section, the New York State Bar Association’s Local and State Government Law Section, and the New York Planning Federation.

Key Topics to be Discussed Include:


• Case Law Update on Planning, Land Use, and Eminent Domain Decisions
• Federal Laws, Regulations, and Programs Affecting Local Land Use
Decision-Making
• New Opportunities for Affordable Housing
• Redevelopment: Re-Purposing Excess Office and Retail Space
• Addressing the Challenges of Climate Change
• Jurisdiction Over Native American Tribal Lands
• Ethical Considerations for the Land Use Practitioner and Government Lawyer
• Diversity, Inclusion, and Bias Considerations for Practitioners

Check out this alert by Holland & Knight highlighting:

  • Chapter 8 of the Acts of 2021, An Act Creating a Next-Generation Roadmap for Massachusetts Climate Policy, requires the development of a voluntary municipal specialized stretch energy code within 18 months of the Climate Act’s passage; however, no plans have been announced by the Massachusetts Department of Energy Resources or the Board of Building Regulations and Standards.
  • Meanwhile, Massachusetts municipalities are seeking to use the Massachusetts legislative process to develop their own climate-influenced building code regulations in the absence of state action.

https://www.jdsupra.com/legalnews/massachusetts-municipalities-pursue-3638964/

This post first appeared on the Municipal Minute Blog by AncelGlink and it is reposted with permission.

In 2018, Pumilia purchased a property in Rockford that had previously been used for a used car dealership, intending to operate a similar business on the lot. He bought the property, obtained insurance, improved the parking lot, and ordered signs for the new business. When the sign company filed an application for a sign permit with the City, it triggered a City zoning review. Shortly thereafter, the City informed Pumilia that the previously issued special use permit to allow a used car dealership had lapsed under the City’s ordinance because the used car business had not been operated for 12 months or more. City staff informed him that he would have to apply for a new special use permit, which he subsequently did. However, both the ZBA and City Council denied the special use request, and he sued.

In his lawsuit against the City, Pumilia claimed that the special use permit to operate the used car lot was re-established based on City staff’s actions and that he was entitled to monetary damages for the City’s actions. The trial court ruled in his favor, finding that the special use was not abandoned and awarding Pumilia his court costs as well as damages for his $2,500 business bond and $5,868 that he incurred for vehicle storage. 

The City appealed, and the appellate court upheld the ruling on the special use but vacated the award of damages.

First, the appellate court determined that although the property was not used as a used car lot for more than 12 months, Pumilia had “reestablished” the special use when he applied for a new special use and when City staff issued positive findings of fact on the special use, which the appellate court determined was expressly provided for in the zoning code. Specifically, the appellate court cited the provision in the zoning code that allowed a property owner to reestablish a special use if staff provides a positive review on six findings of fact.

On the issue of damages, the appellate court rejected the trial court’s award, finding that the City was clearly entitled to immunity from damages under the Tort Immunity Act. The appellate court rejected Pumilia’s argument that he was entitled to damages because City staff acted “willfully or maliciously,” finding that because City staff’s determination in this case was discretionary, it did not affect the immunity afforded to the City under the Tort Immunity Act.

Pumilia v City of Rockford, 2021 IL App. (2d) 200681-U (7/26/2021)

Petitioners challenged the decision of the Town Board that granted respondents’ application for a variance from the requirement that they must obtain a building permit before making improvements to their property. The Appeallate Court was unable on the record before them to review the propriety of Supreme Court’s conclusions regarding the Town Board’s determination stating, ” although the Town Board held a public hearing and a meeting to discuss
respondents’ application and engaged in a lengthy discussion regarding that application, the Town Board failed to articulate its reasons for granting the variance and failed to set forth any findings of fact to support its determination.” Therefore the Court helds its determination in reserve and and remitted the matter back to the Town Board.

Guttman v Covert Town Board, 2021 WL 3782998 (NYAD 4 Dept. 8/26/2021)

This post was authored by Matthew Loescher, Esq.

In 1998, Plaintiff Sheba Ethiopian Restaurant, Inc., d/b/a Queen of Sheba Ethiopian Restaurant, obtained a Certificate of Occupancy (“CO”) and opened for business in DeKalb County as an eating establishment that provided dining, alcoholic beverage service, musical entertainment, and customer dancing. Before it opened for business, Sheba had obtained the requisite licenses and permits from Defendant DeKalb County to provide each of these services. Pursuant to its alcohol license. In 2008, the County amended its zoning code to reclassify certain establishments as “nightclubs” or “late-night establishments” (“LNE”) and to limit the operation of those establishments. The 2008 ordinance specifically required that LNEs and nightclubs “located at or within 1,500 feet of any land zoned for residential use” obtain a Special Land Use Permit (“SLUP”) from the Board of Commissioners. After receiving notice of the County’s administrative decisions, Sheba filed an action in DeKalb County Superior Court against the County; Cox, in his official capacity as Fire Marshal; Baker, in his official capacity as Director of Planning and Sustainability; and Williams, in his official capacity as Acting Finance Director. After an emergency hearing, the Superior Court denied Sheba’s application for a temporary restraining order. Sheba filed another action in the DeKalb County Superior Court against the ZBA and the County, which was dismissed with prejudice.

On appeal, Sheba claimed that it and the identified non-minority comparators were each operating as LNEs in District 2, and that Sheba was targeted for heightened scrutiny and enforcement while the comparators were not. Additionally, Sheba alleged that one of the comparators had comparable code violations, but was not subjected to the same severe enforcement penalties as Sheba. Sheba further substantiated its comparator allegations by providing several accounts of other Ethiopian LNEs which, like Sheba, had been subject to heightened scrutiny and enforcement. Thus, to the extent that Defendants moved to dismiss Sheba’s claim for failure adequately to plead comparators, Defendants’ motion was denied. Similarly, to the extent that Defendant moved to dismiss Plaintiff’s §1981 claim for failure to plead a plausible interference with contractual rights, the court also denied the motion.

Accordingly, Defendants’ Motion to Dismiss was granted in part as to Defendants Adams – the Chief Building Officer for DeKalb County – and Williams – the Chief Operations Officer for DeKalb County – for failure to state a claim and was denied in part as to the remaining Defendants.

Sheba Ethiopian Restaurant, Inc. v Dekalb County, GA, 2021 WL 4177729 (8/25/2021) 

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