California cities may be justified to be skeptical when officials from Sacramento offer broad solutions to the state’s pernicious housing crisis. But the decades-old crisis highlighted by a severe and unsustainable underproduction of new housing is real and getting worse, and the legislature is finally grappling with land use and housing policy proposals that would put meaningful guardrails on otherwise unfettered local control that has long stifled new housing supply.
In a case of first impression published on October 25, 2019, Denham, LLC v. City of Richmond, Cal.App.5th __ (2019) (Case No. A154759), the First District Court of Appeal agreed with a trial court that a ballot initiative to preclude development on 430 acres in Richmond’s El Sobrante Valley caused the Richmond General Plan to become impermissibly inconsistent. But the Court reversed as to the appropriate remedy, and it ordered the trial court to issue a writ of mandate directing the City to cure the inconsistency.
The California Coastal Act governs land use planning for California’s entire coastal zone, directing the state Coastal Commission to maximize the public access to and along the coast consistent with the rights of property owners. The Act protects public access by, among other things, precluding development from interfering with such use and protecting oceanfront land suitable for recreational use. The Act also requires the Commission to minimize potential conflicts between the public and beachfront property owners and to resolve potential conflicts between the Coastal Act’s policies in a way that, on balance, is most protective of significant coastal resources.
Senate Bill 330, known as the Housing Crisis Act of 2019 and authored by State Senator Nancy Skinner (D-Berkeley), passed the California legislature on Friday, September 6, 2019, with strong support from numerous organizations supportive of the production of new housing. For a five-year period ending January 1, 2025, SB 330 would require local governments to process housing permits faster, prevent local governments from “changing the rules in the middle of the game,” and suspend certain housing limits. Although various local agencies and groups that favor strong local land use control opposed SB 330, Governor Gavin Newsom has publicly championed substantial housing production goals and is certain to sign the bill.
According to traditional urban economic models, developers in well-functioning housing markets will choose to build apartments where land is expensive and housing demand is strong. The theory itself is sound: high rents provide strong financial incentives to developers that should lead to an increasing supply of new multi-family housing.
Despite well-settled limits on California’s constitutional initiative and referendum powers, the courts continue to be faced with ballot measures that test those boundaries. We wrote about one such case—San Bruno Committee for Economic Justice v. City of San Bruno, 15 Cal.App.5th 524 (2017)—almost two years ago when the First District Court of Appeal rejected a phony special interest group and a hotel and restaurant workers’ union attempt to use the referendum process to thwart a private hotel development that would not employ union workers. In short, the court in that case agreed that San Bruno’s adoption of a resolution to sell city property to a hotel developer was an administrative act, and thus not a proper subject of a referendum, because it implemented prior legislative actions that established the manner in which the site would be developed.
On July 18, 2019, in Sacramentans for Fair Planning v. City of Sacramento, __ Cal.App.5th __ (2019), the Third District Court of Appeal affirmed a trial court decision denying a “vertical” consistency challenge filed by “Sacramentans for Fair Planning” after the City of Sacramento approved a15-story “high-rise” condominium building—known as the “Yamanee” project—in the City’s Midtown area. The plaintiff group also challenged the City’s streamlined CEQA review of the project under a sustainable communities environmental assessment (“SCEA”). My partner, Art Coon, analyzed those issues in the CEQA Developments blog.
On June 21, 2019, the Supreme Court of the United States decided Knick v. Township of Scott, Pennsylvania, 588 U.S. __ (Case No. 17-647), a closely-watched property rights case that was argued first in October of 2018 and again in January of 2019 after Justice Brett Kavanaugh joined the Court. Knick addressed the requirement, established in Williamson County Regional Planning Comm’n v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985), that property owners must seek just compensation under state law in state court before bringing a federal takings claim under 42 U.S.C. section 1983.
California law contains several critical limitations on the exercise of the police power conferred in Article XI, Section 7 of the state constitution. As set forth in Government Code section 65858, the moratorium statute allows cities and counties to adopt 45-day “interim ordinances” to prohibit land uses that may conflict with a contemplated general plan amendment or another land use proposal the legislative body is studying or intends to study within a reasonable period of time. Such ordinances can be extended so that the maximum term of the moratorium does not exceed two years.
On May 8, 2019, in Cedar Point Nursery v. Shiroma, __ F.3d __ (Case No. 16-16321) (2019), a 2-1 Ninth Circuit panel majority held that a California regulation allowing union organizers access to agricultural employees on employers’ private property, to communicate about union organization under certain limited circumstances, is not a Fifth Amendment taking.