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In Berkeley Hills Watershed Coalition v. City of Berkeley (2019) 31 Cal.App.5th 880 [certified for partial publication], the Court of the Appeal for the First District affirmed that the construction of three new single-family homes on adjacent parcels in the Berkeley Hills was exempt under CEQA’s Class 3 exemption for single-family residences in urbanized areas.  In doing so, the Court held that the “location exception” to CEQA categorical exemptions (Guidelines, § 15300.2(a)) does not apply because an earthquake fault zone or earthquake-induced landslide area is not an “environmental resource of hazardous or critical concern.”  This case importantly limits the location exception to areas that are considered beneficial environmental resources, as opposed to hazardous geologic zones.

In January 2016, the City of Berkeley (“City”) received use permit applications for the construction of three new single-family homes in the City’s R-1(H) zoning district.  A geotechnical and geological hazard report was prepared in connection with the permit applications, which noted that the western portion of the proposed homes sites is within the Alquist-Priolo Earthquake Fault Zone (“APEFZ”) and also located in a potential earthquake-induced landslide area mapped by the California Geological Survey on their Seismic Hazard Mapping Act map.  The report concluded that the site was suitable for the proposed residences.  The City’s Board of Zoning Adjustments approved the use permits, finding that the proposed projects were categorically exempt under the Class 3 exemption for new construction of small structures.  A group of 24 neighbors appealed the decision to the City Council, challenging the CEQA exemption determination and voicing concern about the history of landslides on the site, among others.  The City Council denied the appeal.

Plaintiffs, consisting in part of neighbors who opposed the homes, filed a writ of mandate arguing that the Class 3 exemption determination does not apply and the City’s approval of the use permits violated City zoning requirements.  A project that involves the “construction and location of limited numbers of new, small facilities or structures,” including “up to three single-family residences” in “urbanized areas” (Guidelines, § 15303), is categorically exempt from CEQA unless an exception applies.  Plaintiffs argued that the Project was not exempt because the construction of the three homes meets the “location” and “unusual circumstances” exceptions.  The trial court denied the writ petition and Plaintiffs appealed.

The Court first determined that the bifurcated standard of review for the “unusual circumstances exception” first articulated by the California Supreme Court in Berkeley Hillside Preservation v. City of Berkeley (2015) 60 Cal.4th 1086, applies to the location exception as well: “As with the unusual circumstances exception, the determination of whether a project is located in ‘a particularly sensitive environment’ . . . is essentially a factual inquiry, subject to the substantial evidence standard of review”; “[h]owever, in determining whether the project ‘may impact on’ the environmental resource because of its location, the court applies a fair argument standard of review.”  (Berkeley Hills Watershed Coalition, 31 Cal.App.5th at 890.)

Plaintiffs argued that the location exception applies because the homes are located in an “environmentally sensitive area” and the APEFZ and earthquake-induced landslide area is an environmental resource of hazardous or critical concern.  The Court rejected these arguments.  First, the Court noted that the phrase “environmental resource” refers to a “natural source of wealth or revenue,” which does not encompass a possible earthquake or landslide zones.  Looking at the purpose of the Seismic Hazards Mapping Act, the Court noted that the statute is intended to address damage to property and loss of human lives, not the protection of a sensitive environmental resource.  The Court next determined that the City’s finding that the home sites are not located in an environmentally sensitive area was supported by substantial evidence because the homes’ geotechnical reports neither demonstrated that the projects posed a risk of harm to the environmental resources on the site nor were environmental resources of hazardous or critical concern present.  The Court also noted that a CEQA statutory exemption for housing projects with exceptions for those in a delineated earthquake fault zone or a seismic hazard zone (Public Resources Code § 21159.21) indicated that the Legislature did not intend for Class 3 projects to be subject to the same exceptions (as the Legislature only provided the specific exceptions for housing projects, not projects in the Class 3 categorical exemption).  The Court finally concluded that Plaintiffs failed to cite any evidence supporting a fair argument that construction of the three homes would exacerbate existing hazardous conditions or harm the environment.

This case marks another chapter in the series of case decisions involving the City of Berkeley that has helped define the scope and boundaries of the various exceptions to CEQA’s categorical exemptions.