Does It Matter that CEQA Refers to “Applicable” Planning and Zoning?

Last week, we toasted the impending suspension of 33 Bay Area zoning codes under the Housing Accountability Act’s “builder’s remedy,” and began exploring the California Environmental Quality Act. This week, we’ll tie the two together.

How Does the Builder’s Remedy Affect CEQA?

Mostly, it doesn’t. “Nothing” in the HAA “relieve[s]” a city from “complying with the California Environmental Quality Act.” (Cal. Gov. Code § 65589.5(e).)

This, along with CEQA’s notorious complexity, is why we advise consulting an experienced CEQA lawyer on any builder’s remedy project.

That said—

CEQA Exempts Some Kinds of Housing

The easiest way to approve a CEQA “project”is when the project is exempt. We recommend the State’s video on CEQA exemptions. At this point, most CEQA lawyers would switch into legalese and define the terms “discretionary,” “ministerial,” “statutory,” and “categorical”; they’re all legally meaningful, but we won’t dwell on them here.

CEQA and other laws exempt some kinds of housing projects from CEQA. Here are the big ones:

• “Ministerial” approvals. For our purposes, this mainly means 10% (or 50%) affordable projects in cities that are behind pace in producing housing. (See Gov. Code § 65913.4.) This works through a different process, separate from the builder’s remedy.

• Small projects, or “Class 3.” This is how single-family homeowners get around CEQA, but it can cover a sixplex too. (CEQA Guidelines § 15303.)

• Infill development, or “Class 32.” (CEQA Guidelines § 15332.) “Infill” isn’t defined in the regulation, which covers “project site[s] of no more than five acres substantially surrounded by urban uses.”

• Farmworker, low-income, urban infill near transit, and urbanized infill in unincorporated counties—if there’s “[c]ommunity-level environmental review” on file. (See CEQA §§ 21159.20–.28.)

• “Transit priority projects” as part of a “sustainable communities strategy.” (See CEQA §§ 21155–21155.4.)

Here’s more State guidance. All of these exemptions are vastly more complicated than presented here, so don’t file a bar complaint against me for failing to tell you so.

CEQA Exemptions and the Builder’s Remedy

In a builder’s-remedy context, one key issue with all these exemptions—except for class 3—is the requirement for “consisten[cy] with the applicable general plan designation … as well as with [the] applicable zoning designation.” (E.g., CEQA Guidelines § 15332(a); accord CEQA § 21159.21(a); see also CEQA § 21155(a).) This is important because a builder’s remedy project, almost by definition, isn’t going to be consistent with the general plan and/or zoning designations. (See Cal. Gov. Code § 65589.5(d)(5).) Most CEQA lawyers and veteran housers I’ve talked to believe that a CEQA exemption’s requirement for general plan and zoning consistency would make the exemption inapplicable to a builder’s remedy project. So, that’s a problem.

As I see it, however, these consistency requirements raise an interesting question about the builder’s remedy:

CEQA Lawyers, What Am I Missing?

The builder’s remedy expressly states that a local government “shall not disapprove a housing development project” on the basis of “inconsisten[cy] with … the jurisdiction’s zoning ordinance and general plan land use designation.” (Ibid.) To me, this suggests an argument that the builder’s remedy renders the general plan and zoning inapplicable to the project. Therefore, if a CEQA exemption only requires consistency with any “applicable” general plan or zoning designation, then the exemption ought to be available under the builder’s remedy when the builder’s remedy preempts the general plan and zoning.

There isn’t much law on what counts as “applicable,” but I’ve found one case. In Harroman Co. v. Town of Tiburon (1991) 235 Cal.App.3d 388, a developer sued for approval of a 70-home project that was consistent with the general plan in effect at the time of the application, but inconsistent with a draft revision of the general plan under consideration at the same time. (Id. pp.390–92.) The HAA provision on which the developer relied, today codified in Government Code § 65589.5(j)(1), supported approval for projects compliant with “applicable” planning and zoning standards. 

The relevant issue in Harroman was which version of the general plan—the one in force, or the draft under consideration—was “applicable.” (Id. p.394.) The Harroman court ruled that the draft general plan was the “applicable” one, based on another planning statute that made it so. (See id. pp.394–97.) In other words, housing lost in that case—but the case yields a legal principle that the operation of other statutes should bear on whether a general plan or zoning designation is “applicable.”

Back to CEQA, perhaps Harroman could support an argument that the builder’s remedy makes the general plan and zoning inapplicable, such that a CEQA exemption, otherwise requiring general-plan and zoning consistency, would be available for a builder’s remedy project that met the exemption’s other requirements. Again, I’m new to CEQA, and I’ve yet to research the issue exhaustively. It’s true that the builder’s remedy doesn’t preempt CEQA, but that doesn’t necessarily mean it doesn’t preempt general plan and zoning designations when they’re relevant under CEQA. I’m curious to hear what CEQA veterans think. After all, isn’t it obvious that all these CEQA exemptions are supposed to support various kinds of affordable, infill, and/or transit-oriented housing?

If I’m wrong—and I admit that I could be—please email keith@yimbylaw.org and tell me how. If I don’t hear from anyone, then YIMBY Law’s work on the builder’s remedy might be a little easier than we currently think.

Earth Wins! Transit Oriented Zoning is preserved in Chico

In 2011 the City of Chico passed earth friendly transit oriented zoning. Chico’s Corridor Opportunity Sites (COS) zoning overlay was an attempt by the city of Chico to encourage higher density development along high quality transit corridors and in their downtown. This is part of a broader strategy on the part of the city to try to grow more dense and reduce sprawl. 

Recently, for only the 2nd time since the COS zoning was passed, a developer actually tried to build new student housing using the COS overlay. This, coupled with the pending enactment of SB 330, sent the Chico planning department into a mild panic. 

The planning department proposed changes to the COS overlay that would have decreased permitted density from 70 units/acre to 30 units/acre and reduced allowed height from 65 feet to 45 feet. 

The process of formulating and bringing this ordinance to a vote was rushed by the Planning Department staff because they hoped to get the downzoning passed and enacted prior to January 1st 2020 when SB 330 will take effect and preempt local attempts to reduce density. The planning staff also wanted to codify subjective design standards in the city code as SB 330 may also preempt these standards.

YIMBY Law submitted comments to the effect that the California Environmental Quality Act (CEQA) requires that cities do an Environmental Impact Report to study the environmental impacts of reducing allowed density near transit. You can read more about this in our previous post here.

The proposed downzoning sailed through the Chico Planning Commission on October 18th and was forwarded to the City Council. However, on November 5th the Chico City Council decided to take no action on the item, guaranteeing that it will not be passed in time to take effect before SB 330 preempts these sorts of actions.

At the City Council hearing, public commenters and City Council Members pushed back on the Planning Department’s assertions that this law is necessary going forward. In particular, City Council Members were unconvinced by planners’ assertion that the amendments would not reduce the density of new projects in the COS overlay. Additionally, planners’ fears of aesthetically unpleasant buildings seem to have been unconvincing to the public or the City Council. 

Several speakers specifically stated that they liked the COS overlay as it was formulated in the General Plan, and that it should not be undermined. Other speakers explicitly stated their desire for the city of Chico to increase density to avoid sprawl. In the end, the Council decided to simply not act on the zoning modifications, ensuring that they will not be enacted prior to the end of this year. 

We at YIMBY Law view this as a definite success. It vindicates the intention behind our model and the activism of our fellow YIMBYs. We were able to flag this issue when it came before the Planning Commission and effectively communicate to City Council Members, the legal stakes of the proposed measure. We were prepared to initiate legal action if necessary to force the city of Chico to do their due diligence and adequately study the impacts of the proposed zoning changes. This turned out to not be necessary as we were able to bring this issue to the attention of activists at YIMBY Action. They, in turn, were able to put political pressure on the City Council Members and help to get this measure killed.

While time is certainly running out for cities looking to get around the effects of SB 330’s imminent enactment, this case in Chico can be seen as a preview of the fights that are likely to take center stage in the next few years. The Housing Accountability Act, SB 35, RHNA reforms, ADU laws, and a host of other state efforts are gradually reducing the amount of discretion that local governments can exercise in relation to housing projects. More and more, cities will have to make and stick to objective rules for where housing can be built and the shape it can take. The necessity for vigilance on our part is greater than ever as we need to ensure that the laws that have been passed are enforced effectively.

Chico vs. SB 330

Chico vs. SB 330

SB 330, which passed the legislature this session and was signed by the governor, creates a new set of restrictions on how cities are allowed to downzone or decrease the intensity of residential uses. Cities are now disallowed from decreasing density or height below whatever the permitted use and intensity was on January 1st, 2018. Unfortunately, the law does not take effect until January 1st, 2020. This gives cities until the end of the year to try to downzone, with no repercussions.

Chico is attempting to rapidly pass a reduction in density and height for one of their high density zoning overlays. The proposed changes will lower the permitted density and height throughout the Corridor Opportunity Sites Overlay from 65 feet and 70 units per acre to 45 feet and 30 units per acre. This is a significant change that would drastically limit the density of housing that could be built on sites within this zone. 

The City claims that this will have little to no impact on housing production because applicants will be allowed to apply for increased density and height in return for additional restrictions, including limits on unit types and a range of subjective design standards relating to aesthetics, view preservation, and neighborhood compatibility. 

This system is clearly designed to circumvent the Housing Accountability Act and insert subjective decision making in the process of approving zoning and general plan compliant projects. Under this permitting regime, the city could arbitrarily deny increased height and density based on subjective and poorly defined standards. As we have been enforcing the Housing Accountability Act, cities have gotten more creative with their permitting processes to try to preserve subjective standards in their code. This is a particularly blatant example but the strategy is not uncommon.  

Our response to this proposed zoning and general plan amendment is made up of two parts. First, we have asserted that the HAA protects any ongoing projects from being subjected to the new zoning rules, should they pass. This is important as we have heard that the planning department is in the midst of attempting to negotiate down existing projects to lower densities and heights.

Second, we believe that the changes to the COS Zoning Overlay necessitate a new EIR or an amendment to the existing EIR for the city’s general plan. Existing case law supports the assertion that a reduction in density requires a new environmental study and has necessarily different impacts from increasing density. In People for Proper Planning v. City of Palm Springs et al., a Court of Appeals Judge ruled that Palm Springs was required to generate a new EIR for an ordinance proposing to remove density minimums.

You can read our letter to the Chico Planning Commission here and the planning staff’s response to our letter here.

On October 18th the proposed ordinance came before the Chico Planning Commission where it was passed and forwarded on to the City Council. The intention on the part of planning staff is to fast track the ordinance through the legislative process to get it passed before January 1st. We will continue to monitor this ordinance and take steps to ensure that the city prepares an EIR before ratifying this ordinance.