Holland & Knight Wins Groundbreaking Case Affirming California's Housing Accountability Act

Holland & Knight's West Coast Land Use and Environmental Group has won a groundbreaking housing law case on behalf of the California Renters Legal Advocacy and Education Fund (CaRLA). On Sept. 10, 2021, in California Renters Legal Advocacy and Education Fund v. City of San Mateo,¹ Holland & Knight Partners Daniel Golub and Jennifer Hernandez, along with Associates Emily Lieban and Emily Warfield, successfully won the reversal of a trial court decision in a published decision of the First District Court of Appeal.

Mr. Golub – who also is the first attorney in California to secure the approval of an affordable housing development through litigation under Senate Bill 35's streamlined ministerial approval statute – led the Holland & Knight team and argued the California Renters case before the Court of Appeal.

Background

California law has long required cities to plan for enough housing to meet regional needs. But "[s]ince 1980, local governments have failed to approve, and developers have failed to build, housing in quantities approximating regional housing needs."² To address this problem, in 1982 the California State Legislature enacted, and has continually reformed, the Housing Accountability Act (HAA), also known as the "anti-NIMBY" (Not in My Back Yard) law. The HAA generally requires cities to actually approve the housing for which they have planned, unless the city makes findings that the proposed homes will cause public health or safety impacts. To ensure that code-compliant projects are not unnecessarily rejected or delayed based on debatable or subjective considerations, the HAA limits cities' ability to reject housing developments that comply with a city's "objective" standards, such as numeric height or density restrictions. But the core of the law has always reserved to local governments the authority to decide for themselves through their planning processes where, and under what objective standards, housing will be built within in their borders.

Despite the Legislature's clear intent that the HAA be effective and enforceable, some local interests have been determined to avoid complying with the intent of the law: by rejecting code-compliant projects for subjective reasons, by asserting that cities are entitled to a level of deference from courts that render local decision-making effectively immune from judicial review, or by challenging on constitutional grounds the authority of the state to address the statewide housing crisis. The result is a "housing supply crisis of historic proportions,"³ in which the interests of those who already have homes have prevailed over the needs of the many Californians who are desperate for housing opportunities.

In 2015, an applicant proposed an apartment building for 10 households in an area the City of San Mateo had chosen to zone and plan for multifamily development. City staff considered the project to be fully compliant with all city height and density standards, and recommended its approval. However, the City Planning Commission and City Council disapproved the homes, bending to the demands of neighbors who opposed the development. Rather than presenting findings that would allow the City to reject the homes or impose lawful conditions on the project to address design issues, the City reversed its position that the project was code-compliant and argued that the City could disapprove the development by claiming that it conflicted with a single requirement in the city's discretionary design guidelines. When CaRLA sued to enforce the law, the trial court deferred to the City and even concluded that the HAA was beyond the constitutional authority of the Legislature to enact.

The Court of Appeal's Decision

The Holland & Knight team took the case on appeal. California Attorneys General Xavier Becerra and Rob Bonta, represented by Deputy Attorney General David Pai, intervened on appeal to defend the constitutionality of state law. In its published opinion, a unanimous panel of the First District Court of Appeal's Fourth Division agreed with CaRLA, the Holland & Knight team and the California Attorney General, reversing the trial court.

The Court of Appeal held that "a standard that cannot be applied without personal interpretation or subjective judgment is not 'objective' under the HAA."⁴ In contrast to the City's 45-foot height limit – with which the project complied – the design guideline at issue in the case simply did not qualify as an "objective" standard because it required subjective judgment and was susceptible to multiple reasonable interpretations. Rejecting the City's claim that courts should defer to the City's contention that its guideline was "objective," the Court held that deference to localities "makes sense where a local agency must weigh and balance competing interests in applying policies that require broad discretion," but that "land use decisions under the HAA are different."⁵ "Precisely because the HAA cabins the discretion of a local agency to reject proposals for new housing," the Court added, "it is inappropriate for us to defer to the City's interpretation" of its design guidelines.⁶

The Court held that the City's decision was therefore unlawful because the applicable design guideline did not meet the HAA's "objectivity" requirement. This conclusion was further confirmed by the HAA's "substantial evidence" standard, which the Court held "complements and reinforces subdivision (j)'s objectivity requirement" by providing that a project complies with objective standards if there "is substantial evidence that would allow a reasonable person to conclude" that the project complies.⁷ (Holland & Knight reported on the importance of this provision in 2017, when it was enacted.) This standard, the Court held, is "an excellent backstop to ensure that the standards a municipality are applying are indeed objective."⁸

Having concluded that the City unlawfully denied the homes, the Court then considered the City's several constitutional objections to the HAA. The Court rejected all of these arguments as well – providing useful guidance in other cases in which some cities and other local interests have asked courts to strike down the efforts of the state's elected representatives to address California's housing needs.

First, the Court rejected the argument that San Mateo's right to "home rule" as a charter city renders it immune from complying with the HAA. The Court cited the abundant evidence that "a shortage of housing in our state has led to escalating costs that for many have rendered adequate shelter unaffordable," and concluded the HAA is sufficiently tailored to that interest because it "does not wrest control from local governments so much as require them to proceed by way of clear rules adopted in advance, rather than by ad hoc decisions to accept or reject proposed housing."⁹

Second, the Court held that the HAA's "substantial evidence" standard does not unconstitutionally delegate municipal authority. "Although subdivision (f)(4) of the HAA lowers the burden to show that a project is consistent with applicable objective standards, the statute cedes municipal authority to no private person."¹⁰

Third and finally, the Court rejected the argument that the HAA's "substantial evidence" standard deprives neighboring property owners of their due process rights to a meaningful hearing on housing approvals. The Court held that an "action involving only the nondiscretionary application of objective standards" does not entitle neighboring landowners to [due process] protections."¹¹ But in any event, although the HAA's standards may "affect which arguments will carry the day ... it does not deprive a project's opponents of a meaningful opportunity to be heard."¹²

Conclusion

As cities update their general plans and zoning codes to comply with their new and higher Regional Housing Needs Allocations (RHNAs), local home rule authority will continue to allow local governments the primary role in deciding where and what new housing will be allowed. However, this case affirms that the HAA requires cities to actually implement the housing plans that they have adopted. As the Court concluded, the HAA is not, like some previously enacted state housing laws, a mere paper tiger:

As the Legislature has steadily strengthened the statute's requirements, it has made increasingly clear that those mandates are to be taken seriously and that local agencies and courts should interpret them with a view to giving "the fullest possible weight to the interest of, and the approval and provision of, housing." (§ 65589.5, subd. (a)(2)(L).) The HAA is today strong medicine precisely because the Legislature has diagnosed a sick patient.¹³

California's housing crisis will not heal overnight. But hard-won court victories such as this case offer at least some hope to many stakeholders that the crisis might soon be on the road to recovery.

For information about how to invoke California's state housing laws to advance housing approvals, please contact the authors or another member of Holland & Knight's West Coast Land Use and Environmental Group.

Notes

¹ Cal. Renters Legal Advocacy and Educ. Fund v. City of San Mateo (Sept. 10, 2021, Nos. A159320, A159658) ___Cal.App.5th___ 2021 Cal. App. LEXIS 751, at *52, 2021 WL 4129452.

² Slip op. at p. 7.

³ Slip op. at p. 1, citing Gov. Code § 65589.5, subd. (a)(2)(1).

⁴ Slip op. at p. 15.

⁵ Slip op. at p. 22.

⁶ Ibid.

⁷ Slip op. at p. 23, citing Gov. Code § 65589.5, subd. (f)(4).

⁸ Slip op. at p. 23.

⁹ Slip op. at p. 32.

¹⁰ Slip op. at p. 33.

¹¹ Slip op. at p. 37.

¹² Ibid.

¹³ Ibid.

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