California Renters Legal Advocacy and Education Fund v. City of San Mateo
(2021) (Case Nos. A159320, A159658)
In a decisive victory for Governor Newsom, state legislators, housing proponents, and housing applicants, on September 10, 2021, the First District Court of Appeal in California Renters Legal Advocacy and Education Fund v. City of San Mateo (CARLA) enforced state Housing Accountability Act (HAA) mandates over local interests.
The decision upholds the constitutionality of the HAA to curb the ability of local governments to block new housing. The new opinion affirms that, unless a housing development will adversely impact public health and safety, cities must approve homes that comply with applicable “objective standards.” Truly objective standards are those uniformly verifiable by reference to an external and uniform benchmark, not those that are applied with any amount of personal interpretation or subjective judgment. The Court also affirmed the HAA’s standard of judicial review on this point, which provides that a housing development complies with objective standards if there is “substantial evidence that would allow a reasonable person to conclude” that the development complies.
History of the HAA
“California has a housing supply and affordability crisis of historic proportions.” (Gov. Code, § 65589.5, subd. (a)(2)(A).) Local governments have failed to approve, and developers have failed to build, housing. The housing shortage has led to escalating costs that have rendered adequate homes unaffordable.
“[F]or decades, the Legislature has enacted numerous statutes intended to significantly increase the approval, development, and affordability of housing for all income levels.” (§ 65589.5, subd. (a)(2)(J).) Among these statutes is the HAA, also known as the Anti-NIMBY (Not-In-My-Back-Yard) law, enacted in 1982 with the goal of “meaningfully and effectively curbing the capability of local governments to deny, reduce the density for, or render infeasible housing development projects.” (§ 65589.5, subd. (a)(2)(K).) In this, the HAA has historically failed. Housing has fallen far short of approximating regional and statewide need throughout its almost 40-year history.
Among other means the HAA has employed to try to address housing concerns is the requirement a city rely only on objective, not discretionary, criteria in rejecting housing applications. In 2017, the Legislature strengthened this requirement through subdivision (f)(4), restricting a local government’s ability to deny a housing application if “substantial evidence . . . would allow a reasonable person to conclude” that the proposed project is “consistent, compliant, or in conformity” with objective general plan, zoning, and design review standards.
In this context, Tony Gundogdu submitted an application for a four-story, ten-unit multifamily residential building in the City of San Mateo (City). City Planning staff initially recommended project approval, concluding the project was consistent with the City’s General Plan and Multi-Family Design Guidelines, including with respect to height and transitions, and was “in scale and harmonious” with the neighborhood character. However, after a number of City residents expressed opposition to the project, the Planning Commission voted to disapprove it.
The Commission directed staff to prepare denial findings. Those findings now explained the project was not in scale with or harmonious with the character of the neighborhood, and was not in substantial compliance with the Guidelines’ limitations on building scale. According to the City, the Guidelines “objectively” directed that if there is more than a one-story variation in height between adjacent buildings, a transition or step in height was necessary, including stepback upper floors to ease the transition. The City Council upheld the Commission’s findings and denied the project.
The California Renters Legal Advocacy and Education Fund (CARLA) sued on the ground the City’s denial violated the HAA. The trial court denied the petition, ruling the project did not satisfy the City’s applicable, objective Guidelines. The trial court further concluded the HAA was unconstitutional.
CARLA appealed and, at the request of Governor Newsom, the Attorney General intervened.
The Court of Appeal’s Decision
The Court of Appeal reversed the trial court decision.
Defining objective standards, the Court held that the design guideline the City invoked to reject the housing development was not “objective” as it could not be applied without personal interpretation or subjective judgment. The City’s Guidelines were ambiguous as to what kind of height transition may be acceptable. And if a stepback was required, as the City asserted, the Guidelines were also unclear on how many floors would need to be stepped back. Answering these questions necessarily required interpretation, and was therefore not “objective.”
In reaching its conclusion, the Court noted local agencies retain the ability to establish and enforce objective design review standards, so long as those standards are in place at the time the application is complete. Further, local agencies can impose conditions of approval, so long as those conditions do not require the project be developed at a lower density, unless public health or safety findings are made.
The Court next affirmed that the HAA — as a whole and as to the subdivision at issue — is constitutional. First, the HAA was not an unconstitutional incursion into charter cities’ home rule. While planning and zoning laws are traditionally a municipal concern, providing a stock of housing sufficient to meet the needs of all Californians is a matter of statewide concern. The HAA appropriately limits municipal authority in a manner “reasonably related” and “narrowly tailored” to ameliorating the housing crisis by increasing approval of housing.
Second, subdivision (f)(4) does not impermissibly delegate municipal authority to a private person. The HAA does not divest the City of its final decision-making authority or its broad authority to determine whether there is substantial evidence from which a reasonable person could conclude the project is consistent with the city’s applicable objective requirements; to impose conditions of approval; or to deny or reduce the density of a project that causes an unavoidable adverse impact on public health or safety.
Third, subdivision (f)(4) does not violate due process. The Court rejected the City’s contention that local government review would be a useless exercise because anyone could evidence consistency with applicable standards that would then mandate approval. The “substantial evidence” standard is not any evidence, and opponents can seek to demonstrate that evidence does not meet the standard, or otherwise seek to mitigate undesirable impacts. The HAA does not deprive opponents of a meaningful opportunity to be heard.
Conclusion and Takeaways
The CARLA decision sparks some optimism for the success of legislative efforts to address the statewide housing crisis. As the Court of Appeal summarized:
As the Legislature has steadily strengthened the [HAA’s] requirements, it has made increasingly clear that those mandates are to be taken seriously and that local agencies and courts should interpret them with a view to giving “the fullest possible weight to the interest of, and the approval and provision of, housing.” (§ 65589.5, subd. (a)(2)(L).) The HAA is today strong medicine precisely because the Legislature has diagnosed a sick patient.
The Court has taken the legislative mandate seriously. So that state residents do not face another 40-years of constrained supply and skyrocketing costs, it is now up to local agencies to put aside their disputes, invoke California’s housing laws, and advance housing approvals.
[This alert does not constitute legal advice and no attorney-client relationship is created by viewing or responding to this alert. Legal counsel should be sought for answers to specific legal questions.]