AB 890 (Medina – D), recently sent to Governor Brown for action by October 15, seeks to amend Government Code § 65867.5 and to add §§ 65363 and 65850.10 to prevent development agreements and certain types of land use planning and zoning legislation from being enacted by local voter-sponsored land use initiatives. The bill would substantially abridge the local electorate’s constitutionally guaranteed and reserved initiative power by purporting to exclusively “delegate” specified exercises of legislative authority to local governing bodies – city councils and county boards of supervisors – and thus concomitantly eliminating local voters’ long-held and until now unassailable rights to directly legislate in such areas pursuant to California Constitution, Article II, Section 11, and the procedures of the Elections Code.
The bill’s stated purpose is to ensure the enumerated types of local development proposals are subjected to CEQA review – and, implicitly, to provide expanded opportunities for litigation under a flawed CEQA statute the legislature continues to refuse to meaningfully reform – by annulling the constitutional right of local voters to directly legislate in these areas, a presently enjoyed and “jealously guarded” right the exercise of which is not currently subject to CEQA review. Long story short: AB 890 is a bad bill that proposes a cure far worse than the perceived disease. As will be apparent from the discussion of its provisions below, the proposed law is deeply flawed, of doubtful constitutionality, and the opposite of CEQA reform.
Current Legal Status of Local Land Use Initiatives and their Exemption from CEQA
To fully understand the significance of the changes in law proposed by AB 890, some background on California’s home-rule power and its local initiative and referendum powers is helpful.
When California became a state in 1849, the new state constitution gave the Legislature the exclusive power to establish cities and to enlarge or restrict city powers. This imbalanced system inevitably led to abuses and eventually to a constitutional convention at which Article XI, section 7 was added to the California Constitution. That provision provides a broad grant of inherent home-rule power to every city — with or without a charter — to “make or enforce within its limits all local, police, sanitary and other ordinances or regulations not in conflict with the general laws.” The California Supreme Court declared later in People v. Hoge (1880) 55 Cal. 612, 618 that the drafters’ intent was to emancipate municipal governments from the authority and control formerly exercised over them by the Legislature. (See Detweiler, Peter, “Home Rule: An Historical Perspective,” Western City, January 1997).
In 1911, the California Constitution was again amended, this time to reclaim legislative power from “special interests” by enshrining local rights of direct legislation – through the initiative and referendum – as powers reserved by the people, subject to exercise under procedures prescribed by the State Legislature. (Tuolumne Jobs & Small Business Alliance v. Superior Court (2014) 59 Cal.4th 1029, 1035-1036; De Vita v. County of Napa (1995) 9 Cal.4th 763, 795.)
In De Vita, the California Supreme Court upheld a local county initiative (Measure J) that amended the Napa County General Plan’s Land Use Element to make redesignations of existing agricultural and open space lands conditional for a 30-year period, with certain exceptions, on voter approval. The Court recognized that planning is a legislative function under California law that is therefore “presumptively the proper subject of popular initiative” (De Vita, supra, 9 Cal.4th at 774-777); it observed that “[t]he amenability of land use and planning measures, such as the general plan, to the power of initiative and referendum is not a novel issue in this state,” citing decades of its own precedents holding that zoning ordinances can be amended by initiative and that general plan amendments are subject to referendum, and decades of court of appeal decisions holding or assuming that local initiatives could amend the general plan. (Id. at 774.) The De Vita court followed authorities holding “the adoption and amendment of a general plan is a local legislative matter and not of statewide concern” and thus a proper subject of the constitutional initiative power. (Id., quoting Duran v. Cassidy (1972) 28 Cal.App.3d. 574, 583.)
Recognizing “the local electorate’s right to initiative and referendum is guaranteed by the California Constitution, article II, section 11, and is generally co-extensive with the legislative power of the local governing body” (id. at 775), and that courts “jealously guard” these “reserved powers” of the people (id. at 776), Justice Mosk’s majority opinion in De Vita set forth a rebuttable presumption in favor of recognizing the local initiative right absent “a definite indication that the Legislature, as part of the exercise of its power to preempt all local legislation in matters of statewide concern, has intended to restrict that right.” (Ibid, citations omitted.) The Court recognized that the initiative and referendum powers cannot be used where the local legislative body’s discretion is largely preempted by state or federal statutory mandates (e.g., county boards’ duty to provide suitable accommodations for courts, administrative acts/contracts under State and Federal public housing law, etc.), and the legal principle that legislative acts are subjective to the initiative and referendum powers while administrative or executive acts are not. (Ibid.) It held that the Planning and Zoning Law expressly recognized (e.g., Gov. Code, § 65800), and did not alter, local control (under the constitutionally based police power authority) of land use planning or zoning matters traditionally deemed “municipal affairs” (id. at 782), and that “[i]n deciding whether a matter is a municipal affair or of statewide concern, the Legislature’s declared intent to preempt all local law is important but not determinative . . . .” (Id. at 783.)
In dicta, the Court observed that the “probability that general plan amendments will have regional or statewide impacts certainly supports the contention that the Legislature possesses the constitutional authority to limit to the power of initiative in this area if it chose to do so” but its analysis of the Planning and Zoning Law revealed no such intention. (Id. at 784.) It expressly declined to decide the distinct issue whether a general plan’s Housing Element could permissibly be amended by initiative. (Id. at 793, fn. 11.)
Regarding Measure J’s opponents’ arguments that lack of environmental review should preclude general plan amendments by initiative, the Supreme Court noted that the CEQA Guidelines specifically exempt initiatives from environmental review, and that Elections Code § 9111 instead allows for assessment of environmental and other impacts of local initiatives through an elections report (also sometimes referred to as an “abbreviated report”) consistent with the initiative process timeline; it also noted that, despite several attempts, legislation attempting to impose CEQA review requirements on initiatives (as presenting environmental issues of statewide interest due to extra-jurisdictional impacts) was never enacted. (Id. at 794-795.) Per the De Vita Court:
Elections Code section 9111 represents a legislative effort to balance the right of local initiative with the worthy goal of ensuring that elected officials and voters are informed about the possible consequences of an initiative’s enactment. It permits public agencies to conduct an abbreviated environmental review of general plan amendments and other land use initiatives in a manner that does not interfere with the prompt placement of such initiatives on the ballot. Plaintiffs would have us redraw this legislative compromise by concluding that environmental review is mandatory in the case of general plan amendments, and that therefore such amendments cannot be enacted by initiative. We decline to engage in such legislation by judicial fiat.
(Id. at 795.)
An extensive dissent in De Vita, authored by Justice Arabian and joined by Justice Baxter, would have held general plan amendments per se to be matters of fundamental statewide importance, exhibiting genuine extra-municipal concerns, and requiring multi-disciplinary planning expertise in their legislation – and that therefore they are matters beyond the local initiative power. (Id. at 799-823, dis. opn. of Arabian, J.) The dissent emphasized that the planning process for general plans requires multi-disciplinary expertise and coordination with other local and regional agencies and concerns, and cited mandatory provisions concerning a local agency’s accommodation of its fair share of regional housing as an example of local zoning potentially having regional impacts. (Id. at 810-818.) Arguing that “provisions of Measure J were clearly intended to limit and redirect the county’s future development of housing stock, with a view to influencing metropolitan growth patterns throughout the region,” the dissent would have held general plan amendments to be categorically beyond the local initiative power since such planning must reflect local, regional and statewide interests. (Id. at 819-820.)
Fast-forwarding two decades to the Supreme Court’s most recent decision on the local initiative power and CEQA, a unanimous court upheld a city council’s direct adoption, without CEQA review, of a voter-sponsored initiative – signed by more than 20% of the City of Sonora’s registered voters – approving a specific plan for a Walmart Supercenter project to “streamline” approvals from construction to operation. (Tuolumne Jobs & Small Business Alliance v. Superior Court, supra, 59 Cal.4th 1029.) The Court held requiring CEQA review of voter land use initiatives would be inconsistent with and nullify Election Code § 9214’s provisions allowing direct adoption and providing for preparation and consideration of an abbreviated § 9212 report to assess environmental and other impacts. (Id. at 1037-1039.) Observing that the statutory procedures for enacting voter initiatives were firmly in place for 60 years when the Legislature enacted CEQA in 1970 (id. at 1039), it stated that concerns about interested parties’ use of the process – whether to “evade CEQA review” or conversely “to thwart development” – “are appropriately addressed to the legislature. The process itself is neutral. The possibility that interested parties may attempt to use initiatives to advance their own aims is part of the democratic process.” (Id. at 1043.) Per the Court: “The legislature has outlined clear procedures for voters to overturn an ordinance adopted against the majority’s will. Whichever path a city chooses in dealing with a voter initiative, voters have the final say.” (Ibid.)
It is against this legal backdrop that the provisions of proposed AB 890 must be evaluated.
What AB 890 Would Do And Not Do
Per the Legislative Counsel’s Digest accompanying the bill, AB 890 “would require that the city council of a city or the board of supervisors of a county have “exclusive authority” to adopt or amend a general plan, specific plan, or zoning ordinance, that would [do any of the following:]  convert any discretionary land use approval necessary for a project to [a] ministerial approval [see proposed new Gov. Code § 65363(a)(1)(A)];  change the land use or zoning designation of a parcel or parcels to a more intensive designation [proposed § 65363(a)(1)(B)]; or  authorize more intensive land uses within an existing land use designation or zoning designation [proposed § 65363(a)(1)(C)].” (Emphasis, internal quotes, and bracketed material added.) The bill would establish a hierarchy of “intensity” of land uses (from most intensive to less intensive) as follows: industrial, commercial, office, residential, and agricultural or open-space uses. (Proposed § 65363(a)(2).) For non-enumerated uses, more intensity would be defined as increased residential height or density; increased FAR or square footage for industrial or commercial uses; and changes from light to heavy industrial uses. (Ibid.) Because the above legislative actions would be delegated exclusively to the local legislative body (and thus stripped from the electorate) expressly in order to require CEQA review of such actions, local voter-sponsored initiatives would be precluded from legislating in such areas. (See proposed legislative findings in AB 890’s uncodified Section 1(a)-(d).) As stated in one proposed legislative finding: “It is the intent of the Legislature to prevent a [development] project applicant from avoiding enforceable environmental review by using the initiative process to remove the local government’s discretionary authority over the project.” (Section 1(d).)
Significantly, despite the “exclusive authority” the proposed law would purportedly confer on local legislative bodies to enact legislation in the specified areas, it expressly excepts legislation with “the primary purpose or effect of either: (A) Increasing residential densities or building heights in order to incentivize or accommodate the construction or funding of affordable housing units [or] (B) Requiring a percentage of new residential construction to be affordable to households earning at or below moderate income levels.” It also excepts from its “exclusive delegation” legislative action that “[p]rohibits or otherwise mandates denial of any previously permissible land use,” “[e]stablishes an urban growth boundary or urban limit line,” or “[a]ny other action that does not come within the express terms of [the enumerated exclusively delegated legislative actions].” (Proposed Gov. Code, § 68363(b)(l)-(4).)
In terms of what AB 890 would not do, it states that it “does not affect the referendum powers over any ordinance or resolution” (proposed § 65363(c)). It also would not spare charter cities from its terms, stating that “[n]otwithstanding Section 65700, this section shall apply to a charter city.” (§ 65363(f).)
The proposed law’s provisions leaving the local referendum power entirely unaffected and applying the law to charter cities are remarkably flawed. The legislature apparently believes the supposed statewide and regional interests and concerns in mandating CEQA review of the enumerated local legislative actions are sufficiently strong to warrant annulling the local electorate’s long-held and until now unassailable constitutional rights to legislate by enacting intensified-development land use measures in these areas, and to trump local home-rule authority. Yet by allowing the local referendum power to continue to operate even in these areas it inconsistently assumes these statewide interests are not sufficiently important – once the “exclusively delegated” legislative and CEQA processes have been completed by the local legislative body – to preclude the local electorate from intervening at that point and directly legislating to repeal any resulting legislation. As seen in the De Vita majority and dissenting opinions, previous arguments concerning the Legislature’s potential exclusive delegation of local land use legislation authority to the legislative body centered on whether the subject matter of the action at issue required the expertise and procedures employed by the local body to appropriately address matters of statewide concern. In this light, providing that certain legislative actions are “exclusively” delegated to the local council or board for purposes of enactment and environmental review, but that the local electorate still retains a legislative “veto” power to repeal such actions by referendum, makes absolutely no logical or policy sense. Moreover, it raises grave constitutional issues about attempting to split apart the people’s reserved local initiative and referendum powers in this manner.
While, incredibly, not amending or even addressing the provisions of the Elections Code governing local initiative and referendum procedures and providing for abbreviated impact reports (provisions De Vita referred to as reflecting a “legislative compromise” between requiring full CEQA review and protecting constitutional initiative rights), AB 890 would clearly conflict with those statutes and undermine initiative rights under the current “neutral” and “democratic” process described by the Supreme Court in Tuolumne Jobs & Small Business Alliance. Indeed, it would “stack the deck” in a profoundly anti-development manner, such that while local voters could no longer exercise their constitutional initiative powers to adopt legislative approvals for popular local development projects, they could still exercise referendum powers to “veto” any and all development projects – including those legislatively approved after full and thorough CEQA review by local legislative bodies and even where the projects at issue would have no significant unmitigated adverse environmental impacts. In what world does such a “planning” and environmental review policy make any rational or legal sense? In what world is it fair? (The same flaw infects AB 890’s proposed amendment to Section 65867.5 declaring that development agreements may not be approved or amended by initiative, even in charter cities, though the referendum power still expressly applies.)
The reserved initiative and referendum powers are two sides of the same constitutional “coin,” and if “statewide” concerns truly preempt this local power and justify an “exclusive” delegation of discretionary legislative authority to the local legislative body, then it seems the delegation should truly be exclusive. But discretionary legislative power is obviously not “exclusively” delegated when it is parsed into separate “enactment” and “repeal” components, some of which are delegated and some not.
This fundamental legal flaw (and resulting policy imbalance) is amplified by the proposed law’s perverse placement of other legislative subject matters that patently implicate statewide and regional concerns – e.g., affordable housing, urban growth boundaries, and urban limit lines – squarely within the initiative power of the local electorate. Again, if the goals are proper planning and full CEQA review, it makes absolutely no legal or policy sense to authorize the local electorate to directly legislate on affordable housing issues or urban growth boundaries or limit lines affecting regional development patterns, when it will do so without the benefits of inter-agency coordination or CEQA analysis of the potential displaced development impacts it may be causing. (See, e.g., Muzzy Ranch Co. v. Solano County Airport Land Use Commission (2007) 41 Cal.4th 372, 382-383 [observing “population of California is ever increasing” and holding potential “displaced development” impacts of local land use legislation are cognizable CEQA impacts]; Center for Biological Diversity v. California Dept. of Fish and Wildlife (2015) 62 Cal.4th 204, 220 [noting “reality of continued [population] growth” and observing that “CEQA is not intended as a population control measure”].)
These are not the only serious problems with AB 890. Among other unanswered questions it would raise if enacted include: Can it constitutionally be applied to charter cities? Do its carve-outs for initiatives allowing more intensive housing uses or less intensive (but still potentially environmentally impactful) uses without any CEQA review undermine the “statewide purpose” (i.e., increasing the scope of CEQA review to prevent significant environmental impacts) it asserts to justify preempting constitutionally guaranteed local voter rights? How will its provisions “exclusively” delegating legislatively increased residential heights and densities to the local governing body be reconciled with its seemingly conflicting provisions retaining the local initiative power for the very same legislative actions when they have “the primary purpose or effect” of “incentiviz[ing] or accommodat[ing] the construction or funding of affordable housing units”? How will the bill’s housing project provisions ultimately be squared with the Legislature’s other concurrent affordable housing proposals? How can the bill’s exception from exclusive delegation for initiatives that prohibit or “mandate[ ] denial of any previously permissible land use[s]” be reconciled with the fact that many of the “exclusively delegated” legislative actions will no doubt have that same effect? How will it’s characterization of industrial, commercial, office, residential, and agricultural uses affect the ability of local agencies to classify land uses in their general plans, specific plans, and zoning ordinances? And just how much litigation will it take to resolve these numerous and problematic legal issues if AB 890 becomes law?
Flawed in so many respects that it would no doubt engender abundant litigation were Governor Brown not to veto it, AB 890 is, at bottom, a “half-baked,” profoundly anti-development (and likely unconstitutional) attempt to selectively expand CEQA’s reach at the expense of rational planning and voters’ constitutionally guaranteed local initiative rights. It would fail to achieve its stated purposes, perversely split the local initiative and referendum powers in unprecedented fashion in certain areas of local general plan, specific plan, zoning, and development agreement legislation, and distort the legal concepts of “exclusive delegation,” “statewide concern,” and “municipal affairs” in the land use planning and zoning context beyond all recognition.
As a longtime proponent of new development (see, e.g., Elinson, Zusha, “As Mayor, Brown Remade Oakland’s Downtown and Himself,” New York Times, September 2, 2010), and common sense CEQA reform, Governor Brown hopefully will recognize that AB 890 is a truly bad bill and the opposite of meaningful CEQA reform. Fortunately, he still has the opportunity to send this land use legislation abomination back to the Legislature with his veto stamp on it.
Questions? Please contact Arthur F. Coon or Bryan W. Wenter, AICP of Miller Starr Regalia. Miller Starr Regalia has had a well-established reputation as a leading real estate law firm for more than fifty years. For nearly all that time, the firm also has written Miller & Starr, California Real Estate 4th, a 12-volume treatise on California real estate law. “The Book” is the most widely used and judicially recognized real estate treatise in California and is cited by practicing attorneys and courts throughout the state. The firm has expertise in all real property matters, including full-service litigation and dispute resolution services, transactions, acquisitions, dispositions, leasing, financing, common interest development, construction, management, eminent domain and inverse condemnation, title insurance, environmental law and land use. For more information, visit www.msrlegal.com.