Court of Appeal Enforces Permit Streamlining Act in California Coastal Zone

In Linovitz Capo Shores LLC v. Calif. Coastal Commission (Linovitz Capo),¹ California's Fourth District Court of Appeal applied and reconciled three different statutes. The first, the California Mobilehome Parks Act² (Mobilehome Act) gives the Department of Housing and Community Development (HCD) authority to regulate the construction and maintenance of mobile home parks. The second statute, the California Coastal Act of 1976 (Coastal Act)³ gives the Coastal Commission ultimate development permitting authority over most development in the coastal zone. Finally, the Permit Streamlining Act (PSA)⁴ expedites decisions on land use permits, by imposing limits on an agency's ability to determine an application's "completeness" and time limits within which an agency must either approve or disapprove a permit. Although prior case law has diminished the effectiveness of the PSA, recent state housing laws such as the reformed Housing Accountability Act, and Housing Crisis Act of 2019, have breathed new life into the law by tightening its requirements and imposing greater consequences when local governments fail to comply with it.

In this case, owners of mobile homes in the coastal zone applied for and received permits from HCD to remodel their homes to add second stories. Afterward, the Coastal Commission notified the owners that their then-complete renovations were illegal without a coastal development permit from the Commission. To avoid penalties, the homeowners applied for "after-the-fact" permits from the Commission to legalize the modifications (paying five times the normal application fees). The Commission held a noticed public hearing on the applications. At the hearing, Commission staff recommended that the homes be limited to 16 feet in height, which would have required their demolition, complete redesign and reconstruction. One commissioner suggested continuing the hearing to allow further time for discussion, but the Commission's attorney said that the PSA's timing limits would not allow this. Facing the prospect of being required to completely reconstruct their homes, the homeowners' representative asked the Commission to permit further time for negotiation by allowing the applicants to withdraw and resubmit the applications, and waiving the ordinary six-month waiting period for resubmittal. The Commission agreed to waive the waiting period for resubmittal, but refused to waive the application fees and adjourned the meeting.

When no further action was taken on the applications, the homeowners filed a petition for writ of mandate seeking declaratory relief that their applications were "deemed approved" pursuant to the PSA. Under the PSA, a permit application is "deemed approved" if no action is taken within the time frames in the statute, as long as the "the public notice required by law has occurred."⁵ Although the Commission had failed to take action within the specified time, and although public notice had been provided, the trial relied on a prior opinion of the state's First District, Mahon v. County of San Mateo,⁶ which held that the "notice required by law" must contain language stating that deemed approval will occur if the agency does not act within 60 days. Since the Commission's public hearing notices did not contain this language, the trial court denied the petition and declined to apply the PSA.

The Ruling

The Fourth District reversed the trial court, finding that the homeowners' applications were, in fact, "deemed approved" pursuant to the PSA, creating a split in authority with Mahon.

Before reaching the proper application of the PSA, the court considered and rejected the homeowners' first argument: that the Commission had no authority over the application because the Mobilehome Act gives HCD has exclusive jurisdiction over mobile homes. The court applied the principle that courts "must, where reasonably possible, harmonize statutes, reconcile seeming inconsistencies in them, and construe them to give force and effect to all of their provisions."⁷ Accordingly, the court reconciled the Mobilehome Act and the Coastal Act so that both had effect, concluding that HCD and the Commission have concurrent jurisdiction over mobile homes in the coastal zone.

After confirming the Commission's authority to require coastal development permits, the Fourth District went on to hold that the homeowners' application was "deemed approved" pursuant to the PSA. The court rejected the Commission's argument that the homeowners had withdrawn their applications, finding substantial evidence supported the trial court's conclusion to the contrary. Since the applications were not withdrawn, they were "deemed approved" when the Commission failed to act on them within the PSA's timelines. The Fourth District disagreed with the Mahon court's holding that the Commission's public hearing notices were required to specifically state that the application would be deemed approved if not acted on by a specified date. Although the PSA requires this statement if the permit applicant chooses to provide notice to the public, the statute contains no such requirement when the agency provides public notice. Notably, although prior case law has established that neighboring homeowners' "property" rights give them a due process-protected right to notice about a development approval in some circumstances, the Linovitz Capo court rejected the proposition that the constitution required anything more than the statute already provides. "Assuming arguendo the coastal development permits were likely to effect a significant enough deprivation of neighboring property interests to trigger procedural due process, we need not address the full bounds of public notice content to conclude due process did not require such a statement under the circumstances."⁸ As a result, the homeowners' applications were deemed approved without conditions.

Takeaways and Conclusions

It is possible that California's Supreme Court could grant review of Linovitz Capo to resolve the disagreement between the opinion and Mahon, and possibly to consider broader issues about the interaction between the PSA and the due process clause. For now, however, the published opinion has at least two important implications.

First, the opinion reinforces the principle that the Coastal Act acts in concert with other laws in the coastal zone. The Coastal Commission in fact insisted on this principle, when arguing that the Mobilehome Act did not displace the Coastal Act. But by the same token, the opinion recognizes that the Coastal Act acts alongside the Mobilehome Act – as well as alongside the PSA – and that no statute reigns fully supreme in the coastal zone. This creates significant tension with current practice, in which many important state housing laws are considered ineffective in the coastal zone. Courts have, for example, assumed that the Coastal Act superseded state housing laws such as the Density Bonus Law – a proposition that the Legislature has expressly rejected, directing the courts to reconcile the statutes. Linovitz Capo follows this approach, consistent with legislative intent. This principle – on which the Commission itself insisted – should prompt a welcome reconsideration of whether the Coastal Zone should be considered an area in which housing production laws do not apply. Housing applicants should consider relying on the opinion when invoking laws such as the Housing Crisis Act and Housing Accountability Act for projects in the coastal zone.

The other major implication of the decision is to breathe some new life into the PSA's timing limits. Housing opponents and some local agencies have argued that the due process clause limits applicants' ability to invoke laws that streamline the approval of housing. The Fourth District sounded a note of skepticism about whether the issuance of "development permits were likely to effect a significant enough deprivation of neighboring property interests to trigger procedural due process." But assuming that the due process clause is implicated, the opinion rejected the argument that its requirements are onerous, instead emphasizing that all that is required is notice that is "reasonably calculated to afford affected persons the realistic opportunity to protect their interests."⁹ It will still be advisable (particularly in the Northern California counties of the First District, where trial courts are more likely to follow Mahon) for permit applicants to consider providing their own public notice stating that applications may be deemed approved if not acted upon. But the opinion may signal a significant limitation on the ability of housing opponents to bring "due process" objections to laws that streamline housing.

For more information and questions on the Fourth District ruling and its impact, please contact the author.

Notes

¹ No. G058331, 2021 Cal. App. LEXIS 531, 2021 WL 2621205 (Cal. Ct. App. June 25, 2021)

² Health & Safety Code, § 18300 et seq.

³ Public Resources Code, § 30000 et seq.

⁴ Government Code, § 65921 et seq.

⁵ Government Code § 65956(b).

⁶ (2006) 139 Cal.App.4th 812, 822.

⁷ Slip op. at p. 9, (quotation omitted).

⁸ Slip op. at p. 18.

⁹ Slip op. at p. 17 (quotation omitted).

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