The Coastal Act trumps both the Density Bonus Act and the Mello Act, which requires affordable housing in coastal areas. That’s the conclusion of the Second District Court of Appeal, which upheld the City of Los Angeles’s decision to deny a 15-unit housing project in Venice that would have replaced a three-unit building.

The ruling reaffirms the power of the Coastal Act, whose primary purpose is to protect coastal resources. In this case, Los Angeles officials decided that the visual incompatibility of the new project, proposed by Kalnel Gardens LLC, with existing buildings violated the Coastal Act even though some buildings nearby were of similar scale.

The court had an easy time with the Density Bonus Act, since that law expressly states that it does not supercede the Coastal Act. The court had a more difficult time with the Mello Act, which specifically applies within the coastal zone. In addition, the Coastal Act states that its provisions should not be used to allow local governments to obstruct the construction of affordable housing under other laws.

However, the appellate court found, the Coastal Act also requires that the design of new developments protect scenic views and be “visually compatible with the character of the surrounding areas.” (Pub. Resources Code, § 30251.) That was the basis of the City’s decision to reject the Kalnel project, and on appeal Kalnel does not contend there was insufficient evidence to support that finding.”

Kalnel proposed a project that included five single-family homes and five duplexes and received a density bonus because two units were reserved for very-low-income families. Under the density bonus law, Kalnel also got a height variance. City staff gave the project various approvals, including a coastal development permit, but neighbors appealed the project to the Planning Commission, claiming that height, density, setbacks, and other visual characteristics were out of step with the neighborhood.

At a hearing before the West Los Angeles Area Planning Commission, neighbors claimed one- and two-story structures outnumbered larger structures such as the one proposed by a 9:1 ratio. However, Kalnel’s lawyer ultimately said the project was “all a case about affordable housing and density bonus.” Kalnel lost all the appeals, including the appeal to the Los Angeles City Council, and then filed a lawsuit. Los Angeles County Superior Court Judge James C. Chalfant ruled that the city had violated the Housing Affordability Act and that the project conformed to density bonus rules. However, the court ruled that the three housing laws are subordinate to the coastal act and substantial evidence existed that coastal resources would be threatened by the project.

Perhaps the most important issue was whether the Coastal Act trumps the density bonus law – a law that developers often use to increase the density of their project above local zoning limits in exchange for providing affordable housing. But this proved to be an easy issue for the court to resolve.

Writing for the three-judge panel, Justice Laurence Rubin simply noted that the The Density Bonus Act (§ 65915) states: “Nothing in this section shall be construed to supersede or in any way alter or lessen the effect or application of the [Coastal Act].” (§ 65915, subd. (m).)”

The Mello Act proved more complicated, since the law is specifically designed to ensure that affordable housing is provided in the coastal zone. Whenever a new project is built in the coastal zone, the law requires the developer to provide either new or replacement affordable housing. The Coastal Act also specifies coastal considerations do not permit local governments to avoid other affordable housing requirements.

“Standing alone, these two provisions might be construed as giving the Mello Act primacy over the Coastal Act,” wrote Justice Rubin. “However, the Coastal Act also requires that the design of new developments protect scenic views and be ‘visually compatible with the character of the surrounding areas.’ (Pub. Resources Code, § 30251.)”

In further discussion about the conflict between coastal resources and affordable housing, Justice Rubin wrote: ‘Which interpretation is most protective of coastal resources? One that requires Mello Act housing even if it blocks coastal access, intrudes into environmentally sensitive areas, or is visually incompatible with existing uses, or one that requires application of the Mello Act’s affordable housing requirements within the coastal zone so long as those housing projects abide by the Coastal Act’s overall protective provisions?

He concluded: “Remembering the Legislature’s statements that protecting coastal resources is a paramount concern because those resources are of vital and enduring interest, it seems clear that the latter interpretation must prevail.”

The appellate court declined to consider the question of the Housing Affordability Act because of a technical error in the appeal made by Kalnel.

The Case:

Kalnel Gardens LLC v. City of Los Angeles, No. B264434 (September 29, 2016).

The Lawyers:

For Kalnel Gardens: Allen Abschez, Loeb & Loeb, 

For City of Los Angeles: Michael Bostrom, Deputy City Attorney,