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Almost a year after losing an important appellate court ruling in a housing element lawsuit, the City of Clovis has agreed to a wide-ranging settlement agreement that includes:

In the latest expansive ruling in favor of housing developers, a Los Angeles Superior Court judge has ruled that La Cañada Flintridge’s decision not to move forward with a builder’s remedy project constituted “disapproval” of the project under the Housing Accountability Act and has ordered the city to move forward with approving the project as a builder’s remedy application. “While the City Council may not have voted to deny the conditional use permit, tentative tract map, and tree removal permit,” wrote Judge Mitchell Beckloff, “the City Council voted on May 1, 2023 and determined the Project could not proceed as the project proposed-a Builder's Remedy project. Because the Project was proposed as a Builder's Remedy, the City Council's May 1, 2023 vote on the project application was a "disapproval" within the meaning of the HAA.” The La Cañada Flintridge decision adds to recent housing element rulings in favor of developers comes after an Alameda County judge’s ruling that Berkeley owes a developer a total of $4 million for denying a builder’s remedy application and a Los Angeles judge’s decision to suspend Beverly Hills’ permit authority because of defects in its housing element. (In addition, Davis and Clovis have recently settled major housing element lawsuits. For a summary, see my recent Insight column  here .) The La Cañada Flintridge case is perhaps the most closely watched builder’s remedy case in the state. (Previously CP& DR coverage of the case can be found here .) The 39-page ruling, issued on March 4, breaks new ground because it interpreted a refusal to move a builder’s remedy application forward as a project denial. The city repeatedly argued that it had the power to deny the application because it adopted a compliant housing element. The city adopted a housing element in October 2022 and, after review by the Department of Housing & Community Developed, adopted a revised element in February 2023. The applicant, 600 Foothill Owner LLC, filed the builder’s remedy application in November 2022. 600 Foothill is controlled by Cedar Street Partners, a Glendale-based developer. A major legal question in several builder’s remedy cases has been whether a local jurisdiction can self-certify that its housing element is compliant with state law or, instead, needs approval of the state Department of Housing and Community Development. However, Judge Beckloff did not rule on this question directly. Rather, repeatedly noting that he was “exercising … independent judgment,” he ruled that the October 2022 housing element was not compliant with state law. The case in question was not the case the developer brought against the city but, rather, a companion case brought by the California Housing Defense Fund. In the case brought by the developer, the City of La Cañada Flintridge took issue the idea that the Department of Housing and Community Development has independent authority to determine whether a housing element is compliant or not. Only the courts have that power, the city said in its recent rebuttal to the developer’s July lawsuit. In the rebuttal, the city also said it doesn’t have to pursue Affirmatively Furthering Fair Housing (AFFH) goals required by HCD because the U.S. Supreme Court recently struck down affirmative action in  Students for Fair Admissions v. Harvard. In its lawsuit, the developer alleged that after it approved the housing element in October 2022, the city engaged in a shifting position, requiring additional information to deem the builder’s remedy complete, then supposedly applying new city-approved standards to the project and “backdating” a revised housing element before finally denying the project in May. ( CP&DR ’s coverage of the developer’s lawsuit can be found  here .) In its rebuttal to the Cedar Street Partners lawsuit, the city argued that does not have the legal power to determine whether or not a housing element is in compliance. “HCD cannot be given or wield any power to  finally  determine that a Housing Element is not “substantially compliant” with the Housing Element Law,” said the city’s response, adding that only the courts can decide whether a housing element is in compliance with state law. (Assemblymember David Alvarez, D-San Diego, recently introduced AB 1886 , which would resolve this issue by saying HCD approval is required.) But in the California Housing Defense Fund case, Judge Beckloff concluded that even by the city’s own reckoning, it did not have a compliant housing element in October 2022 – as evidenced by the fact tht the Ctiy Council adopted a revised housing element in February 2023 based on comments from HCD. The city also took a strong position on Affirmatively Furthering Faith Housing (AFFH), which has been a strong emphasis in housing elements by HCD ever since Gustavo Velasquez took over as director. Valasquez was Assistant Secretary for Fair Housing at the federal Department of Housing and Urban Development in the Obama Administration and championed a federal AFFH rule there. Since moving to Sacramento he has similarly championed AFFH in virtually all HCD activities, including housing elements. But La Cañada Flintridge claimed the recent U.S. Supreme Court ruling striking down affirmative action in higher education ( Students for Fair Admissions v. Harvard) rendered the whole AFFH discussion moot. In the California Housing Defense Fund case, Judge Beckloff embraced the city’s view that only the courts can decide whether a housing element is in compliance with state law. But then he ruled against the city. On the question of whether the housing element was in compliance with state law, he found, among other things, that the city had not done an adequate job of analyzing whether non-vacant sites identified for housing would actually be available during the period the housing element covers (2021-2029). On the Affirmatively Furthering Fair Housing argument, the judge focused on the fact that many of the sites identified for low-income housing were in close proximity to a freeway. The city argued that it has met AFFH analysis requirements by reaching out to various stakeholder groups, but the judge ruled that “outreach alone does not substantially comply with the requirement. He added, “Outreach does not constitute analysis.” The Case: California Housing Defense Fund v. City of LaCañada Flintridge , Los Angeles County Superior Court No. 23STCP02614 (Ordered filed March 4, 2024). The Lawyers: For California Home Defense Fund: Lisa Ells, Rosen Bien Galvan & Grunfeld, lells@rbgg.com

Opponents of an affordable housing project in downtown Livermore have won the latest legal skirmish, with an appellate court ruling that the city must allow a referendum on the project to move forward.

The City of Fresno has filed a lawsuit against Fresno County over the environmental impact report associated with the county’s general plan. In the lawsuit, which comes after several rounds of comments on the EIR, the city generally asserts that the county’s mitigation measures on land use and agricultural land conversation lack teeth and don’t meet legal requirements.

A Superior Court judge has ordered the City of Huntington Beach to continue processing a wide variety of housing applications and suspended the city’s ability to knock down the density on projects identified in the housing element, pending resolution of a lawsuit from the state. On March 28, San Diego Superior Court Judge Katherine Bacal granted the state’s request for temporary relief and a preliminary injunction preventing Huntington Beach from:

A California Environmental Quality Act challenges to the expansion of a gun club on land owned by the City of Ukiah in unincorporated Mendocino County isn’t moot simply because the expansion has been completed, an appellate court has ruled. The county – which initially concluded it had no regulatory authority over the project – could still impose meaningful CEQA mitigations assuming the expansion of the club leads to increased activity, the court concluded. The case will now return to Mendocino County Superior Court for more action.

The provision in SB 10 allowing local elected officials to override zoning provisions adopted by local voters is constitutional because the local electeds are “cloaked in the mantle of the state” when they choose to implement SB 10, an appellate court panel has ruled. Along the way, the panel struck a blow in favor of the market, saying that California’s housing crisis is the result of a lack of supply and the state is the “logical” entity to try to fix the problem, rather than local governments. SB 10, adopted by the Legislature in 2021, permits local governments to allow up to 10 units on a single parcel of land without going through an environmental review under the California Environmental Quality Act. The law isn’t mandatory; local governments must implement it with an ordinance for it to take effect. It hasn’t been widely used (see previous CP&DR coverage here), but it did draw an almost immediate lawsuit from the AIDS Healthcare Foundation and the City of Redondo Beach, which zeroed in on SB 10’s provisions that allow local officials to override density caps adopted by the voters. The foundation and Redondo Beach argued that the provision is unconstitutional because, under California’s system of initiative and referendum enshrined in the state constitution, voters prevail over their legislators. Redondo Beach passed a "subsequent voter requirement" for major land use changes in 2008, which has led to several ballot measures and litigation over the now-shuttered AES power plant near the beach. In 2022, a Los Angeles judge ruled against the plaintiffs (see CP&DR coverage of that ruling here) and a unanimous three-judge panel of the Second District Court of Appeal has now affirmed the ruling, saying the SB 10 provision is constitutional. “We so conclude,” wrote Justice Brian Hoffstadt, “because the housing shortage is a matter of statewide concern, because Senate Bill 10 conflicts with (and hence preempts) local initiatives that make housing density caps mandatory, and because Senate Bill 10’s more narrowly tailored mechanism of cloaking counties and cities in the mantle of state preemptive authority so that they may decide whether to supersede a local density cap on a parcel-by-parcel basis—rather than effecting a wholesale invalidation of all local density caps in every county and city—is not constitutionally problematic.” In reaching the conclusion, the three-judge panel noted that while land use issues have been “‘historically’” and “traditionally” a function of local governments in California, “the sub-issue of ensuring affordable housing has been a matter of statewide concern for nearly six decades.” But using a traditional supply-and-demand argument, the court also found a factual basis for state override of local powers in the land use arena. “Under basic economic principles, prices go up when demand exceeds supply,” Hoffstadt wrote. “Thus, the rise in housing prices at every income level in California is logically linked to the insufficient supply of housing at all of those income levels. What is more, the task of ensuring a great supply of housing is one that is logically handled at the state level. That is because local governments are susceptible to ‘not in my backyard’ (or NIMBY) pressure.” Critical to the court’s ruling was its conclusion that local elected officials, when they adopt an SB 10 enabling ordinance, are not acting as local officials but rather as agents of the state government. The AIDS Healthcare Foundation and Redondo Beach made a series of arguments about the constitutionality of the SB 10 provision, including the argument that pre-emption is unnecessary because local voters can be asked to lift existing density caps and therefore there is no conflict between those caps and SB 10. But the court wrote: “Local housing density caps conflict with and are inimical to Senate Bill 10.” (In an apparent error, the court actually wrote “housing destiny caps”.) The court added that the plaintiffs’ argument “utterly ignores that a main reason our Legislature enacted Senate Bill 10 is because local electorates were blocking attempts to increase housing density.” The plaintiffs also argued that the legislative intent to override local caps was not strong enough in SB 10 but the court disagreed. Referring to the Government Code section amended to accommopdate SB 10, the court wrote: “Section 65913.5 explicitly grants local legislative bodies the power to “adopt an ordinance to zone a parcel for up to 10 units of residential density per parcel” “otwithstanding any local restrictions . . . including . . . restrictions enacted by local initiative.” (§ 65915.3, subd. (a)(1), italics added.) Indeed, section 65913.5 even goes so far as to erect a separate and higher procedural requirement for superseding an initiative-based housing density cap than for superseding a legislatively enacted cap—namely, a two-thirds vote rather than a simple majority. (Id., subd. (b)(4).)” Critical to the court’s ruling was its conclusion that, in adopting an SB 10 enabling ordinance, local elected officials are not acting in their local capacity – which would be overridden by the voters – but as agents of the state. The plaintiffs had argued that the way SB 10 was written – not by taking all initiative power away from the voters and giving it to elected officials, but rather, by creating a narrow exception – effectively pits the local elected officials against their own voters. “This argument ignores that the local legislative body in this instance is wearing the mantle of state preemptive power, and hence it is not pitting “local” against “local” but rather “state” against “local”—and the Constitution dictates that the state should prevail in that battle,” the court wrote. The Case: AIDS Healthcare Foundation v. Bonta, No. B321875 (filed March 28, 2024) The Lawyers: For AIDS Healthcare Foundation and City of Redondo Beach: Michael Webb, Redondo Beach City Attorney, michael.webb@redondo.org , and Beverly Grossman Palmer, Strumwasser & Woocher, bpalmer@strumwooch.com . For State of California: , Benjamin M. Glickman, Benjamin.Glickman@doj.ca.gov , and Seth E. Goldstein, seth.goldstein@doj.ca.gov , Deputy Attorneys General.

With a unanimous vote, the U.S. Supreme Court has ended California’s practice of allowing looser standards for exactions and impact fees when they are imposed as part of a general plan.

A Los Angeles judge has declared SB 9 unconstitutional for charter cities, saying that it cannot guarantee that new housing created will be “affordable” and “below market” and therefore it does not align with the law’s rationale for overriding local powers. The problem, Los Angeles County Superior Court Judge Curtis Kin said, is that the law relied on the state’s classification of affordable housing as a matter of statewide concern, not a lack of housing supply – which the state has also classified as a matter of statewide concern but which SB 9 did not reference. The ruling only applies to charter cities, which have more home rule power than general-law cities. In a footnote, Kin said, “The Court recognizes the provisions of SB 9 might support a finding that SB 9 addresses the shortfall in housing generally … SB 9 takes away the ability of local governments to impede the state's goal of increasing housing production to address the shortage in housing. But, the Court declines to decide whether SB 9's provisions permissibly address some other concern (housing supply) not identified by the Legislature in enacting SB 9. Kin is the same judge who late last year suspending the City of Beverly Hills’ permitting power because he found the city’s housing element “deficient”. ( CP&DR ’s coverage of the Beverly Hills case can be found here .) SB 9, which went into effect in 2022, essentially did away with binding single-family zoning in most parts of California. The law permits landowners build up to four units on their single-family parcel by to splitting their parcels in two and build two units on each of the resulting parcels, all by ministerial action. The bill was very controversial during legislative debate in 2021 and has received a lot of national publicity. However, its actual effect has been limited. Relatively few single-family parcel owners have chosen to go the SB 9 route. The general consensus is most single-family homeowners find it easier to add an accessory dwelling unit on the property, an action that is also available by ministerial approval thanks to a different state law. Decades ago, California declared that both a shortage of housing and a lack of affordable housing as matters of statewide concern, thereby allowing the state to override the California Constitution’s guarantee of local home rule. SB 9, however, mentioned only “affordable housing” and not “a lack of housing supply” as the justification for interfering with home rule. This was the basis of the constitutional challenge brought by several cities led by Redondo Beach. Other cities involved in the lawsuit include Carson, Cerritos, Torrance, and Whittier. In his ruling, Kin defined “affordable housing” as deed-restricted below-market-rate housing. Because SB 9 does not require any of the resulting housing units to be dedicated as affordable, he concluded, it does not further the affordable housing goal stated in the law as the rationale for the local override. In its defense of SB 9, the state attorney general’s office tried to argue that simply because SB 9 uses affordable housing as the stated rationale, that doesn’t preclude also using the shortage of housing supply as a rationale as well. But Kin didn’t buy the argument – and to back up his position, he contrasted SB 9 with other state override bills such as SB 423, which was passed last year as a followup to SB 35. SB 423 allows some housing projects to be approved by ministerial action but specifies that units must be deed-restricted affordable. “Through the enactment of SB 423,” he wrote, “the Legislature requires developers who seek to avail themselves of a streamlined, ministerial approval process for their development to record a covenant requiring any lower or moderate-income housing units to remain available at affordable prices for specified periods of time. “By contrast,” he added,” SB 9 contains no similar provision to require, promote, or incentivize dwelling units within single-family residential zones or on subdivided urban lots to be affordable or designated as affordable. SB 423 also amended SB 9 to allow four units to be built on single-family parcels in California but it did not otherwise require any development resulting from ministerial approval of a subdivision to be available at below market-rate levels.” The Attorney General's Office attempted to back up its case with a deposition from Melinda Coy, the head of the Housing Accountability Unit at the Department of Housing & Community Development, who addressed the question of how SB 9 might help solve the housing problem in California. But Kin was not persuaded, sticking closely to the idea that "affordable housing" means below-market deed restricted housing. "Coy's declaration supports a finding that, at best, an increase in housing development may slow or stop the rise in housing prices," Kin wrote. "But Coy never states that the removal of barriers to housing development through enactment of sB 9 would lead to housing that is below market rate and affordable." The Case: City of Redondo Beach et. al. v. Bonta, Los Angeles County Superior Court No. 22STCP01143 (filed April 22, 2024) The Lawyers: For Redondo Beach and other plaintiffs: Pam Lee, Aleshire & Wynder, plee@awattorneys.com For California Attorney General’s Office: Deputy Attorney General, kevin.kelly@doj.ca.gov

In an unpublished followup to an important 2017 ruling, the Fourth District Court of Appeal in San Diego has overturned a jury’s decision to award a developer $800,000 in an inverse condemnation case against Coronado. The owners of an historic bungalow in the case never sought a permit from the city’s Historic Resource Commission for their final alteration plan, although they did show the plan to a staff planner for the city. The court concluded that the case was not ripe because the permit was never sought. The court also concluded that the “futility’ exception to the ripeness requirement in an inverse condemnation case also did not apply, again because no permit was ever applied for. The property in question is a 100-year old bungalow in Coronado owned by the J.A. Abbott Trust. In 2014, the Coronado Planning Commission – and, on appeal, the City Council – designated the bungalow as historic even though the city had previously concluded that similar bungalows built by the same builder dating from the same era were not historic. Trustees Arthur and John Young sued to challenge the designation but lost all up the way through the Court of Appeal. “This court's role is not to reweigh evidence, but rather, to determine whether the findings are supported by substantial evidence,” wrote Justice Cynthia Aaron for a unanimous three-judge panel in a 2017 ruling. ( CP&DR ’s previous coverage of that case can be found here .)

A trial judge has ruled that Huntington Beach – perhaps the most resistant city in California to state housing law – must adopt a housing element. Attorney General Rob Bonta said the judge is requiring the city to adopt the housing element within 120 days – which would be mid-September – though the judge’s order didn’t seem to include that specification.

For the second time in a row, critics of a new annex at the State Capitol building in Sacramento have won at the Court of Appeal. This time, the court nailed the Department of General Services for re-certifying a defective environmental impact report – but not vetting its adequacy with the trial judge.