In Snowball West Investments L.P. v. City of Los Angeles (2023) 96 Cal.App.5th 1054, the Second District Court of Appeal addressed the “rezoning exemption” of the Housing Accountability Act (HAA), finding that a housing project was required to comply with a zoning density limit even though the applicable general plan allowed for higher residential density on the site.

Snowball West Investments LP (“Snowball”) proposed a 215-unit housing project in the City of Los Angeles (“City”). While this was consistent with the maximum density allowed by the general plan, the property’s zoning capped the allowed units on the site at 19 single-family homes. Snowball asked the City to change the zoning to permit higher density, but the request was denied.

Snowball then asked the City to process the project as proposed, claiming that they could build 215 units without a rezone under the rezoning exemption in the HAA (Gov. Code, 65589.5(j)(4)). The City disagreed and denied Snowball’s request. Snowball filed suit. The trial court denied the petition and Snowball appealed.

Pursuant to the provision relied on by Snowball, a housing development project need not seek a rezone if the project is consistent with the general plan, “but the zoning for the site is inconsistent with the general plan.” Snowball argued that zoning designations applicable to the site were inconsistent with the general plan because they were not listed as corresponding to the land use designation. In opposition, the City relied on a footnote in the community plan (a part of the general plan). While each land use designated had corresponding zones listed in the community plan, the City explained that it interpreted the footnote to additionally render any more restrictive zones also consistent with the land use designation. As such, the City maintained that the low-density RA and A1 zones applicable to the project site were consistent with its much higher density land use designation, despite not being listed as corresponding to that designation, because the zones were more restrictive.  Snowball argued in response that the HAA was amended by SB 330 in 2019 to close this precise “loophole” under which local agencies could maintain low-density zoning and force rezones, while appearing to allow much higher residential density in the general plan.

Before addressing the merits, the Court of Appeal discussed the applicable standard of review. The HAA imposes a reasonable person standard of review that is less deferential to the agency than in most land use litigation. However, foreshadowing its ruling on the merits, the Court found that Snowball had not demonstrated that the HAA applied in this case and, therefore, declined to consider whether the HAA standard of review applied. Nonetheless, it stated that its holding would be the same under either standard.

Reaching the merits, the Court surveyed the history of the community plan footnote at issue, finding City memoranda from the time of its adoption to support the City’s interpretation. While Snowball cited prior City findings stating that a rezone of the site would “bring the zoning into conformance with” and “create consistency with” the land use designation, this did not persuade the Court that the City’s arguments were post-hoc, as it found that the City had no occasion to actually evaluate the issue of zoning consistency until Snowball subsequently asserted that it could proceed under the rezone exemption. Accordingly, the Court upheld the City’s interpretation of the community plan footnote.

Snowball and amici curiae also argued that there was an independent inconsistency, given the different density limits established by the general plan and zoning. While the Court acknowledged the HAA’s statutory mandate that it should be interpreted to afford the fullest possible weight to the interest of providing housing, it noted that compliance with the law did not require every project to be approved, nor that maximum allowable density always be achieved. It also noted that the parties’ arguments highlighted the tension created by the legislature’s effort to solve a statewide problem lying within a realm typically controlled by local agencies. While the Court observed that it might be “poor practice” for applicable development standards to be established “by reference in a footnote so opaque that delving into its 30-year history is required to parse its meaning,” it observed that the wisdom of the City’s planning documents was not at issue.

Snowball and amici also argued that, specifically for density, the rezoning exemption applies to allow development at the general plan density even if there is no inconsistency with zoning. The second sentence of the provision, relied on in this argument, states that the zoning standards that are applicable “shall be applied to facilitate and accommodate development at the density allowed on the site by the general plan and proposed by the proposed housing development project.” However, Snowball raised the argument for the first time on reply, and the Court, therefore, did not consider the argument.

Snowball also maintained that the City failed to make the findings required by the HAA for denial of a project that is consistent with applicable standards. However, as the Court had concluded that there was an inconsistency with applicable zoning standards, it found no need for the City to make those findings.

Snowball’s final argument was that the City’s findings denying the initially requested zone change were not adequately supported. However, the Court noted that the record contained a large volume of evidence including information in citizen comment letters that could be verified that supported the City’s findings. As such, it rejected this argument too, affirming the trial court decision in full.

The California Supreme Court has subsequently denied a petition for review and request to depublish the opinion.

Conclusions

• The HAA does not apply if a project is inconsistent with applicable objective development standards.
• Zoning is not necessarily inconsistent with the general plan merely because it sets a lower residential density limit.
• Where the general plan allows for more density than zoning, a housing project may still argue that no inconsistency is necessary to build at the general plan density under the HAA. However, the argument is likely to be less persuasive in light of this opinion.

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