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In Move Eden Housing v. City of Livermore (2024) 100 Cal.App.5th 263, the First District Court of Appeal overturned the trial court and held that the City of Livermore (City) City Clerk was required to process a referendum challenging the decision by the City to enter into a development agreement (Project) with Eden Housing, Inc. (Eden Housing) for development of affordable housing and a new park in downtown Livermore. The Court also found the trial court erred in requiring the plaintiffs, Move Eden Housing (Move Eden), to post a $500,000 bond as security for costs and damages associated with the action for challenging a project that meets certain affordable housing requirements. 

In 2018, the Livermore City Council approved an agreement between the City and Eden Housing to sell property to Eden Housing and approve the development of the Livermore Village site, which included provisions for the development of a public park, up to 130 units of workforce housing, a science center, a black box theatre, and retail space. A different group previously challenged the development on CEQA grounds, but the petition was denied. (For Downey Brand’s coverage of the case, see this article.)  After an amendment to the agreement between the City and Eden Housing in 2021, which made changes to, among other things, provisions for development of the park, and a 2022 City Resolution executing the amendment (Resolution), Move Eden obtained the required signatures to propose a referendum on the Resolution for the November 2022 ballot. Despite obtaining the required signatures, the City Clerk did not accept the petition for referendum, and notified Move Eden that the Resolution was not eligible for processing as a referendum, because the Resolution was an administrative as opposed to a legislative act.

Move Eden subsequently filed an action against the City and Eden Housing requesting a writ of mandate under the Elections Code for the City Clerk to process Move Eden’s referendum challenging the City Council’s approval of the affordable housing development project. The trial court ordered the plaintiffs to post a bond under California Civil Procedure Code, section 529.2, a statute under which the defendant can request an order for the plaintiff to post a bond as security for costs and damages incurred for delays from a challenge to a housing project. The trial court also denied the petition for writ of mandate on the grounds that the Resolution was not subject to referendum because it was an administrative act or, alternatively, because the City was acting as an administrative agent of the state in adopting it. Move Eden timely appealed.

A referendum gives voters the power to temporarily halt the operation of an existing law until a majority of voters approve it, but a group is required to gather enough signatures from registered voters to place the referendum on the ballot. According to the appellate court, the duties of a city clerk in certifying a referendum are limited to determining whether procedures were met, such as verifying that the required number of signatures were obtained. In this case, Move Eden had the required number of signatures, which, in the Court’s view, should have prompted the City Clerk to accept the referendum. In failing to do so, the City Clerk was in violation of her duties under the Elections Code.

The City asserted that its resolution was not subject to referendum because approving the affordable housing development was an administrative act, not a legislative one, and the City served as an administrative actor for the state. But the Court disagreed, finding that the Project’s inclusion of provisions for the construction of a public park was a policy decision that was political in nature and, therefore, a legislative act. In response to the City’s contention that it was acting as an administrative agent in approving the resolution, the Court determined that its policy decision to construct and improve the park also meant that it was acting outside of a purely administrative function in approving the Project.

With regard to the $500,000 bond that was imposed against Move Eden by the trial court, the Court determined that Move Eden’s writ petition was to enforce the provisions of the elections code and not to challenge the Project. The provisions of Code of Civil Procedure 529.2, which allows the imposition of a bond for actions that challenge affordable housing developments, were therefore not applicable.

The Court reversed the judgment of the trial court and issued an order requiring the City to process the referendum petition as required by the Elections Code.