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In Cal. Renters Legal Advocacy & Educ. Fund v. City of San Mateo (2021) 68 Cal.App.5th 820, the First District considered an appeal from the denial of a petition that alleged the City of San Mateo (City) improperly denied a housing development under the Housing Accountability Act (HAA). The Court agreed that the denial had violated the HAA, and further upheld the HAA as a constitutional exercise of legislative authority.

In 2015, a developer submitted an application to build a four-story, ten-unit multifamily residential building (Project) in San Mateo (City). The general plan and zoning both designated the site for high-density multifamily dwellings. Planning staff found the Project to be consistent with the general plan and Design Guidelines and recommended its approval. However, nearby residents opposed the Project, expressing concern that it was out of scale with adjacent single-family residences. In 2017, the Planning Commission voted to disapprove the Project, directing staff to prepare findings that it was not in scale and not harmonious with neighborhood character due to its height and size.

The Planning Commission findings stated that the Project violated a requirement related to building height in the City’s Design Guidelines. The building height standard stated that, if there is a more than one-story variation in height between adjacent buildings, “a transition or step in height is necessary,” and that a project should “step back upper floors to ease the transition.” The Planning Commission found that the Project did not comply with this guideline, as the second and third stories contained no step back, though the fourth story did. Thereafter, the City Council denied an administrative appeal filed by the developer. California Renters Legal Advocacy and Education Fund, among others (Petitioners) filed a lawsuit, as allowed under expanded standing provisions of the HAA, arguing that the disapproval violated the statute. The trial court denied the petition on multiple grounds. Petitioners appealed, joined by the Attorney General, who intervened to defend the constitutionality of the law.

The HAA (Government Code section 65589.5) was originally enacted in 1982 to curb the capability of local governments to deny, reduce the density for, or render infeasible housing development projects. In 2017, the legislature substantively amended the HAA to “add teeth” to its restrictions. As amended, the HAA restricts the ability of a local government to deny an application to build housing if it is consistent with objective standards at the time it is filed. A project is deemed to comply with such standards if substantial evidence would allow a reasonable person to conclude that it does. A standard that is not objective cannot be used to deny a qualifying project absent the agency finding that the project would have a specific, adverse, unavoidable impact on public health or safety.

The trial court had determined that the building height standard of the Design Guidelines was an objective standard, and further that the HAA impermissibly intruded on the City’s municipal affairs under the home rule doctrine of the California Constitution and violated the prohibition on delegation of municipal affairs to private parties. It did not reach the City’s further due process argument.

Objective Standards Under the HAA

The Court of Appeal first discussed the purpose and context of the HAA, emphasizing the legislature’s dissatisfaction with the dearth of housing and its intent that the HAA was to be interpreted to afford the “fullest possible weight to the interest of, and the approval and provision of, housing.” Determined only to reach the constitutional questions if necessary, the Court first analyzed whether the Design Guidelines’ provision regarding building transitions or steps was an “objective standard” under the HAA.

The Court noted that review under the HAA differs from that of typical administrative mandamus actions, in which the administrative record is reviewed to determine whether the City’s findings are supported by substantial evidence. Under the HAA, the Court determines whether substantial evidence would allow a reasonable person to conclude that the project complies with the pertinent standards. As to questions of law, the Court modeled its approach on the framework adopted in Ruegg & Ellsworth v. City of Berkeley (2021) 63 Cal.App.5th 277 (Ruegg & Ellsworth), which addressed similar arguments related to SB 35, another law restricting local authorites’ ability to deny applications for new housing. In that case, the Court applied a de novo standard to questions of law to determine whether the identified standard was “objective” and “applicable”. The Court here applied the same standard.

On the merits of the argument, the Court first held that a standard need not be contained in a municipality’s general plan, zoning, or subdivision standards and criteria to be applicable under the HAA. It further found the standard here was not objective. As defined, an objective standard is one which does not require personal interpretation or subjective judgment to apply. The Court noted that the standard here, potentially requiring a transition or step, was not clear as to whether a transition could be something other than a step back in height. For instance, the Project incorporated four large trees and a covered walkway lined by trellises, separating it from adjacent homes. City staff had initially found that the two-story high trees adequately mitigated the height differential. The Court noted that determining whether these measures would provide an adequate “transition or step in height” required interpretation or judgment. Further, the Court noted that the standard did not establish the extent or nature of the required step back. The City had taken differing positions on this question throughout the dispute, which further supported the Court’s view that the standard was not objective.

The City argued that the Court should give deference to the City’s interpretation of its own Design Guidelines. The Court disagreed for multiple reasons. First, the City had no long-standing and consistent interpretation of the meaning of the building height standard at issue. Indeed, staff initially interpreted the provision differently, and the Planning Commission only reversed this interpretation after it decided to deny the application. Second, the Court found that such deference would be inappropriate under the HAA’s standard. Additionally, the request for deference only further served to show that the standard required something other than an objective interpretation. Lastly, the Court cited subdivision (f)(4) of the HAA, establishing that the applicable standard of review is intended to be deferential towards the housing development to ensure the standards a municipality is applying are indeed objective. The Court acknowledged that the City’s interpretation was reasonable, but found that an alternate interpretation was reasonable as well. The plausibility of both views further demonstrated that it was not an objective standard.

Constitutionality of the HAA

The City also raised multiple arguments regarding the constitutionality of the HAA. The trial court had found the HAA to be unconstitutional to the extent that it conflicted with the City’s municipal code provisions under the Home Rule doctrine. The City declined to defend this “sweeping” view, but instead challenged the interpretation advanced by Petitioners and the Attorney General of the subdivision establishing the HAA’s reasonable person standard of review, subdivision (f)(4). The Court of Appeal considered both the constitutionality of subdivision (f)(4) and of the statute as a whole insofar as it conflicted with a municipal code.

Under the Home Rule doctrine of the California Constitution, state law only prevails over conflicting municipal ordinances governing municipal affairs if the state law is reasonably related to a matter of statewide concern and narrowly tailored to avoid unnecessary interference in local governance. The City agreed that provision of housing is a matter of statewide concern, but argued that subdivision (f)(4) does not itself address this concern. The Court found this argument to be unpersuasive. Again, following the reasoning of Ruegg & Ellsworth, which also addressed a Home Rule argument, the Court looked to the purpose of the statute as a whole rather than a particular provision, finding the HAA to be reasonably related to the statewide concerns of ameliorating the housing crisis and increasing approval of housing developments.

The Court also found the statute to be narrowly tailored to serve these purposes. The HAA leaves local governments free to establish and enforce standards so long as they are consistent with meeting their regional housing need and, if used to deny or reduce the density of a housing development, are objective. Municipalities are free to impose conditions of approval that do not reduce density, and may still deny a project if they find it would have an unavoidable adverse impact on health and safety. The City argued that subdivision (f)(4) was not narrowly tailored as it allowed “any person” to provide evidence of consistency, but the Court disagreed, finding the provision merely holds local governments to a standard of objectivity. In addressing a suggestion of the trial court that the HAA be limited to situations in which the local government acted in bad faith, the Court observed that the parties made no showing that the state’s insufficient supply of housing substantially derived from bad faith actions by cities and counties.

The Court next considered whether the HAA violates another provision of the California Constitution that prohibits the legislature from delegating the performance of municipal functions to private persons. The City argued that subdivision (f)(4) delegated the authority to determine consistency with objective standards to any private person who could submit evidence of such compliance. The Court again disagreed, noting that under the HAA, the City retained broad authority to determine whether there is substantial evidence a project complies with its objective standards and make other determinations under the law.

Lastly, the City argued that subdivision (f)(4) violated the due process rights of neighboring landowners, depriving them of a meaningful opportunity to be heard. Assuming due process protections applied to municipal determinations of compliance with objective standards, the Court saw no such violation. Subdivision (f)(4) might affect which arguments prevail, but does not deprive a project’s opponents of a meaningful opportunity to be heard.

The Court reversed the trial court’s ruling denying the petition.

Key Points:

  • The HAA does not violate the constitutional doctrines of Home Rule, nondelegation of municipal functions, or due process.
  • Under the HAA, if a standard is so malleable that it admits multiple potential interpretations then it is not objective.