We’ve come a long way since 1911, when the initiative and referendum processes were enshrined in the state constitution to address corruption in state government caused by special interests.  For some reason that reality reminds me of a scene in Seinfeld’s “The Subway” episode, which had Elaine standing on a New York subway car carrying a large present.  An older woman approaches Elaine and this dialogue ensues:

Woman: “I started riding these trains in the forties.  Those days a man would give up their seat for a woman. Now we’re liberated and we have to stand.”

Elaine: “It’s ironic.”

Woman: “What’s ironic?”

Elaine: “This, that we’ve come all this way, we have made all this progress, but you know we’ve lost the little things, the niceties.”

Woman: “No, I mean what does ironic mean?”

So what’s ironic about the popular use of the initiative and referendum powers?  The latest example: the Morgan Hill Hotel Coalition, a group of local hoteliers that sponsored a timely and sufficient referendum petition to prevent the City of Morgan Hill from changing the zoning classification from light industrial to general commercial where the landowner plans to build a Hilton Garden Inn.  Although the City Council rezoned the land in part to encourage clustering of hotels and generating more business in the community—consistent with general plan land use policies—the hoteliers alleged a concern for reducing the City’s limited supply of industrial land.  They also acknowledged concern for the obvious: competition.

The hoteliers’ action has resulted in an important new opinion addressing land use referenda, City of Morgan Hill v. Bushey, __ Cal. App. 5th __ (May 30, 2017) (Case No. H043426), in which the Court of Appeal for the Sixth Appellate District held that a referendum challenging an ordinance that would make the zoning for a parcel consistent with the relevant general plan land use designation is not invalid in the event the referendum results in the rejection of the legislative body’s first choice of consistent zoning—so long as the legislative body remains free to select another consistent zoning for the parcel.

The City eventually called a special election to submit the referendum to the voters and, at the same time, approved the filing of a lawsuit to have the referendum nullified as legally invalid and removed from the ballot.  The City claimed the referendum was invalid because, under deBottari v. City Council, 171 Cal.App.3d 1204 (1985), the voter’s rejection of the ordinance would create an inconsistency between the zoning for the parcel and the general plan’s land use designation for the parcel.   In deBottari the Court of Appeal for the Fourth Appellate District concluded that the City of Norco had properly refused to submit the referendum to the voters.  The Court held that “the referendum, if successful, would enact a clearly invalid zoning ordinance.  Judicial deference to the electoral process does not compel judicial apathy towards patently invalid legislative acts.”

The Coalition contended that a referendum that seeks to prevent a zoning change from taking effect does not create an inconsistency with a general plan’s land use designation but merely maintains the preexisting status quo.

The trial court in Bushey agreed with the City and rejected the Coalition’s position.  The Court of Appeal, however, stated that “[t]he Fourth District’s reasoning in deBottari is flawed,” because a referendum that rejects an ordinance simply maintains the status quo.

The Court reached that conclusion following an extensive analysis of the laws governing initiatives and referenda and Government Code 65860.  In brief, initiatives enact law while referenda allow the voters to reject, or veto, statutes and ordinances enacted by their elected legislative bodies before those laws become effective.

Section 65860 prevents cities and counties from enacting zoning ordinances that are inconsistent with the general plan.  Importantly, however, section 65860 allows the maintenance of inconsistent zoning.  But if a zoning ordinance becomes inconsistent with a general plan by reason of amendment to the plan, or to any element of the plan, the zoning ordinance must be amended within a reasonable time so that it is consistent with the general plan as amended.

Against that backdrop, the Court persuasively reasoned that section 65860 did not require the City to adopt the ordinance, it simply preempted the City from enacting new zoning that would be inconsistent with the general plan.  Thus, the referendum to reject the City’s attempt to create a consistent zoning for the site simply continued the maintenance of inconsistent zoning but it did not seek to enact anything.  So long as the City Council remains free to choose some other consistent zoning, section 65860 does not automatically render invalid a preexisting zoning ordinance that became inconsistent only after a subsequent general plan amendment.

The Court’s holding hinged on the possibility that the City Council could adopt other consistent zoning for the property.  Although the Court expressed no opinion on the validity of a referendum challenging an ordinance that chooses the only available zoning that is consistent with the general plan, Bushey is in direct conflict with deBottari and City of Irvine v. Irvine Citizens Against Overdevelopment, 25 Cal.App.4th 868 (1994).  The California Supreme Court will be required to resolve this important split in authority.


Questions? Please contact Bryan W. Wenter, AICP of Miller Starr Regalia.

For more than 50 years, Miller Starr Regalia has served as one of California’s leading real estate law firms. Miller Starr Regalia has expertise in all types of real property matters, including full-service litigation and dispute resolution, transactions, acquisitions, dispositions, leasing, financing, common interest development, construction, management, eminent domain and inverse condemnation, exactions, title insurance, environmental law, and land use. Miller Starr Regalia attorneys also write Miller & Starr, California Real Estate 4th, a 12-volume treatise on California real estate law. “The Book” is the most widely used and judicially recognized real estate treatise in California and is cited by practicing attorneys and courts throughout the state. For more information, visit www.msrlegal.com.