On September 29, 2016, in a case of first impression, the Court of Appeal for the Second Appellate District addressed the tensions between the requirements of the Housing Accountability Act, Density Bonus Law, and Mello Law (establishing minimum requirements for affordable housing within the coastal zone) with the California Coastal Act. Kalnel Gardens, LLC v. City of Los Angeles, __ Cal.App.5th __ (2016) (Case No. B264434).

In summary, the laws in issue provide as follows:

• The Housing Accountability Act, known as the “anti-NIMBY law,” was designed to limit the ability of local governments to reject or render infeasible housing developments based on their density without a thorough analysis of the economic, social, and environmental effects of the action.
• The Density Bonus law a developer agrees to set aside a certain percentage of the units in a housing development for low or very low income residents, the local agency with approval power over that development must award the developer both certain itemized concessions and a density bonus that allows an increase in density above what the zoning ordinances would ordinarily allow.
• The Mello Act establishes minimum requirements for affordable housing within the coastal zone.
• The Coastal Act is a comprehensive scheme to govern land use planning for the state’s entire coastal zone.

The case involved the City of Los Angeles’ denial of a 15-unit housing project in Venice on the basis that the project violated visual and scenic compatibility requirements of the Coastal Act. Because the project included two units for very low-income households, it was entitled to a density bonus. Those units also entitled the project to certain zoning concessions it received, such as a height and setback variances.

City planning officials approved the project. A group of neighboring residents then appealed the approvals, contending that the project violated the Coastal Act because its height, density, setbacks, and other visual and physical characteristics were out of step with the existing neighborhood. Among other things, for example, the opponents noted that one- and two-story structures outnumbered taller structures in the area by a ratio of nine to one. In contrast, the project’s three-story height, which included rooflines of up to 40 feet, would tower over and shadow nearby properties.

The Planning Commission granted the appeal, finding that the project did not conform with the Coastal Act because its size, height, bulk, mass, and scale were incompatible with and harmful to the surrounding neighborhood and because the setbacks were too small. The developer appealed that decision to the City Council, which denied the appeal and adopted the Planning Commission’s findings.

The developer then filed an administrative mandamus action against the City, alleging that it violated the Housing Accountability Act, the Density Bonus law, and the Mello Act. The trial court found that the City had not complied with the Housing Accountability Act and that the density bonus, height, and setback variations initially approved for the project were proper under the state’s housing statutes and other City land use regulations, including the Coastal Commission-certified Venice Land Use Plan. Even so, the trial court found that the three housing statutes were subordinate to the Coastal Act and that substantial evidence supported the City’s findings that the project violated the Coastal Act because it was visually out of step with the surrounding coastal community. Because the developer did not contend that there was insufficient evidence to support the finding that the project violated the Coastal Act, the primary issue on appeal was whether the Coastal Act takes precedence over the housing laws.

The Court of Appeal first concluded that it did not have jurisdiction to consider the developer’s Housing Accountability Act claim because the developer was required to obtain appellate review of that claim by way of a writ petition. Government Code section 65589.5(m) provides that actions brought to enforce the Housing Accountability Act shall be brought as administrative mandate action. The same section also provides the mechanism for appellate review in such cases: “Upon entry of the trial court’s order, a party shall, in order to obtain appellate review of the order, file a petition within 20 days after service upon it of a written notice of the entry of the order, or within such further time not exceeding an additional 20 days as the trial court may for good cause allow . . . .” (Emphasis added).

The developer did not ask for an additional 20 days in which to file a writ petition, and did not file a writ petition at all. Instead, within 60 days after service of notice that judgment had been entered it filed a notice of appeal as to the entire judgment. The Court thus dismissed the developer’s appeal of the Housing Accountability Act order even though it was part of a final judgment. Importantly, the court also stated, in a footnote, that it would likely conclude the Housing Accountability Act is also subordinate to the Coastal Act because the HAA provides that it shall not be construed to relieve local agencies from complying with the Coastal Act.

The Court then rejected the developer’s reliance on a provision of the Density Bonus law that states, in Government Code section 65915(j)(1), the grant of a density bonus or concession “shall not be interpreted, in and of itself, to require . . . a local coastal plan amendment.” The Court relied on the language in another part of that statute, section 65915(m), which states that “[t]his section does not supersede or in any way alter or lessen the effect or application of the California Coastal Act of 1976.” The Court concluded that “the language of subdivision (m) could not be clearer: the Density Bonus Act does not supersede the Coastal Act or in any way alter or lessen its effect. The plain language of the provision therefore governs.”

Having concluded that the Coastal Act takes precedence, the Court also noted that the Legislature appears to have struck a balance between the Coastal Act and the Density Bonus law by requiring local agencies to grant density bonuses unless doing so would violate the Coastal Act. The Court thus held that the Density bonus law is subordinate to the Coastal Act and a project that violates the Coastal Act as the result of a density bonus may be denied on that basis.

The Court also resorted to statutory interpretation to determine the relationship between the Mello Act and the Coastal Act. Unlike the Density Bonus law, the Mello Act does not state that the Coastal Act supersedes it. Instead, the Mello Act states that it “shall apply within the coastal zone as defined by the Coastal Act.” Without an express declaration of legislative intent, the Court rejected the developer’s argument that the Mello Act supersedes the Coastal Act, requiring approval of increased density affordable housing developments even if they violate the Coastal Act. Because the Legislature found that, in carrying out the provisions of the Coastal Act, conflicts between its provision “be resolved in a manner [that] on balance is the most protective of significant coastal resources,” the Court held that the developer’s project is subject to the Coastal Act despite its compliance with the Mello Act.