California cities may be justified to be skeptical when officials from Sacramento offer broad solutions to the state’s pernicious housing crisis. But the decades-old crisis highlighted by a severe and unsustainable underproduction of new housing is real and getting worse, and the legislature is finally grappling with land use and housing policy proposals that would put meaningful guardrails on otherwise unfettered local control that has long stifled new housing supply.
The causes of the housing crisis are undoubtedly complex and the result of various factors such as the widespread abuse of the California Environmental Quality Act, which requires state and local government agencies to inform decision makers and the public about the potential environmental impacts of proposed projects and to reduce those environmental impacts to the extent feasible. But the CEQA compliance process also increases the time, cost, and risk of getting new housing projects approved, and it provides a soft target for litigation by labor unions and others who often have few or no environmental objectives. CEQA litigation—even the threat of CEQA litigation—results in the abandonment or scaling back of new housing projects, resulting in construction of fewer new homes and higher costs for the homes that are built.
The causes of the housing crisis also include local land use policies with extensive permitting requirements and subjective approval criteria that can readily be interpreted for or against new housing depending on “the eye of the beholder.” But the sad reality is that local officials often wilt when faced with the political pressures of anti-housing NIMBYism.
Former President John F. Kennedy once wrote that “A man does what he must—in spite of personal consequences, in spite of obstacles and dangers, and pressures—and that is the basis of all human morality.” President Kennedy apparently never met a NIMBY.
The common overarching fact is that the state’s housing crisis is a man-made tragedy that has harmed the environment and prevented a generation of Californians from affording the type and quality of housing their parents and grandparents could afford—often on one salary in the community of their choosing. There is one way out, and the legislature seems to recognize it: reduce local control and allow the housing market to function more freely.
To develop a sufficient supply of housing to meet the needs of all Californians, numerous state statutes evidence the legislature’s intent for the state’s housing laws to apply to all cities, general law and charter. The Housing Accountability Act, for example, states that the HAA “shall be applicable to charter cities because the Legislature finds that the lack of housing, including emergency shelter, is a critical statewide problem.”
In enacting the HAA, the legislature correctly found that “[t]he excessive cost of the state’s housing supply is partially caused by activities and policies of many local governments that limit the approval of housing, increase the cost of land for housing, and require that high fees and exactions be paid by producers of housing.”
The legislature also found that “California’s housing picture has reached a crisis of historic proportions despite the fact that, for decades, the Legislature has enacted numerous statutes intended to significantly increase the approval, development, and affordability of housing for all income levels, including this section.” In enacting the HAA and repeatedly expanding its provisions since then, the legislature’s intent “was to significantly increase the approval and construction of new housing for all economic segments of California’s communities by meaningfully and effectively curbing the capability of local governments to deny, reduce the density for, or render infeasible housing development projects and emergency shelters. That intent has not been fulfilled.”
The HAA thus severely limits a city’s ability to disapprove a housing project that complies with objective general plan, zoning, and subdivision standards and criteria, including design review standards, in effect at the time the project’s application is deemed complete. The HAA also declares that a housing development project shall be deemed consistent with objective general plan, zoning, and subdivision standards and criteria if there is substantial evidence that would allow a reasonable person to reach that conclusion.
The HAA has been amended 20 times since its enactment in 1982, each time to strengthen the law to facilitate the approval of new housing and to provide difference-making remedies to developers of housing projects improperly thwarted by the local land use process. But what happens when a local agency would rather thumb its nose at the legislature and the governor, despite decades of state law intending to solve a chronic underproduction of new housing, than demonstrate even a modicum of courage when the loudest voices in the room demand that a disfavored housing project be denied? If a troubling recent order in San Francisco Bay Area Renters Federation v. City of San Mateo, Case No. 18-CIV-02105 (November 7, 2019)—an HAA challenge to San Mateo’s disapproval of a 10-unit condominium project for failure to comply with design guidelines—is any indication, the state’s trial courts can hardly be relied on and may be part of the problem.
The San Francisco Bay Area Renters Federation trial court found that the City’s design guidelines—establishing a “stepback” requirement for certain multi-story buildings—satisfy the HAA’s stringent “objective general plan and zoning standards and criteria” requirement and that its “reasonable person standard” does not apply to the court’s determination of this issue. The court’s analysis and conclusion on that point deserves its own analysis and criticism, but it ultimately pales in comparison to the poorly reasoned and grossly overreaching constitutional determination that it needlessly chose to reach.
According to an apparently emboldened trial court, “the HAA in general and Government Code § 65589.5(f)(4) in particular constitute a significant and unnecessary interference in municipal governance and that cannot possibly be construed as ‘narrowly tailored’ and, therefore, is unenforceable” with respect to charter cities. Moreover, in the court’s view, the HAA’s “sweeping negation” of local agency discretion interferes with core municipal decision-making ability of charter cities and violates the constitutional “home rule doctrine” and it would unlawfully delegate municipal functions to private parties in violation of the California Constitution.
Charter cities indeed have a special status under the state constitution to control their own “municipal affairs” free from constraints imposed by the general law and subject only to constitutional limitations. Moreover, the question whether a given activity is a “municipal affair” over which a charter city has sovereignty or a “statewide concern” over which the legislature has authority is a legal issue for the courts to resolve on a case-by-case basis. Nevertheless, the courts are supposed to give “great weight” and “deference” to legislative statements of purpose.
The San Francisco Bay Area Renters Federation trial court gave no deference to the legislature and had no reason to attempt to address the constitutionality of the HAA with respect to charter cities to resolve the more limited issue actually raised in the case: whether the city’s design guidelines satisfy the HAA. The court ruled that the guidelines did satisfy the HAA, a finding that fully resolved the case without the need to address any constitutional questions.
Aside from the thinly-reasoned rationale in the trial court’s short eight-page order, the overreaching decision violates the judicial canon that courts should construe statutes so as to avoid raising difficult constitutional questions. Indeed, the California Supreme Court has stated that it will not decide constitutional questions where other grounds are available and dispositive of the issues of the case. See, e.g., Santa Clara County Local Transportation Authority v. Guardino, 11 Cal.4th 220, 230-31 (“This court will not decide constitutional questions where other grounds are available and dispositive of the matter before us.”).
The San Francisco Bay Area Renters Federation trial court thus had no reason to opine on the constitutionality of the HAA once it resolved the limited issue actually raised in the case. But the court went there anyway, and it did so based on the false premise that it “expressly ordered” the parties to brief the enforceability of the HAA and specifically the “reasonable person” standard. In fact, however, the court asked only for briefing on the enforceability of the “reasonable person” standard under the HAA and not the enforceability of the entire HAA or its applicability to charter cities: “If either party contends that some aspect of Government Code 65589.5(f)(4) is or is not enforceable or is or is not applicable to this action, the parties are ordered to provide all authority supporting that contention.”
Under the court’s sparse and deeply flawed reasoning, the state’s 121 charter cities could be exempt from numerous other important statutes declaring clear legislative intent that the state’s housing shortage is a statewide concern and meant to solve a pernicious housing crisis, including the Housing Element Law and Senate Bill 35. And charter cities could also be exempt from myriad other laws intended to address a statewide concern applicable to all cities, such as Government Code section 65008(h) (prohibiting discrimination against affordable housing), Public Resources Code section 21000(a) (protecting the quality environment for the people of this state), and Public Resources Code section 30109 (applying the California Coastal Act to charter cities).
The San Francisco Bay Area Renters Federation trial court order deserves a bright spotlight in Sacramento. The order utterly ignores the overwhelming evidence that the ongoing housing crisis is hurting millions of Californians, robbing future generations of the chance to call the state home, stifling economic opportunities for workers and businesses, worsening poverty and homelessness, and undermining the state’s environmental and climate objectives, and it should be seen for what it is: a direct and intentional challenge to the legislature and to the governor, both of whom have made clear that housing production is one of the most pressing issues facing California.
