CEQA’s Class 32 categorical exemption for “infill development” applies to proposed developments within city limits on sites of five or fewer acres substantially surrounded by urban uses, where the site has no habitat value for special status species, can be adequately served by all required utilities and public services, and the project would not have significant traffic, noise, air quality, or water quality impacts. (CEQA Guidelines, § 15332(b)-(e).)  But another important qualification is that the project must be “consistent with the applicable general plan designation and all applicable general plan policies as well as with applicable zoning designation and regulations.” (§ 15332(a).)  A recent Fourth District decision addressed this key requirement of the infill exemption, and upheld application of the Class 32 exemption to the City of San Diego’s approval of a project proposing seven (7) detached residential condominium units on a steeply sloped, environmentally sensitive half-acre site –despite general plan minimum density policies that would ordinarily require 16 to 23 dwelling units on a parcel of that size.  Holden v. City of San Diego (IDEA Enterprises, LP, Real Party in Interest) (2019) ____ Cal.App.5th ____.

The Court of Appeal’s opinion, filed December 3 and certified for publication on December 13, 2019, recited and applied well-established law according great deference to a local legislative body’s general plan consistency determinations in holding: “Because there is substantial evidence to support City’s finding that the Project is consistent with the General Plan and the Community Plan, it follows that there is also substantial evidence to support its finding that the Project is exempt from CEQA as infill development pursuant to Guidelines section 15332 and, in particular, its implicit finding that “[t]he project is consistent with the applicable general plan designation and all general plan policies” within the meaning of Guidelines section 15332, subdivision (a).”

The Project, Environmental Setting, Governing Land Use Regulations, and City’s General Plan Consistency Determination

Real Party IDEA’s project proposed demolition of two single-family homes and construction in their place of 7 detached residential condominium units on adjacent parcels making up an aggregate site totaling 0.517 acres in City’s North Park community.  The project site is located on environmentally sensitive lands – a heavily vegetated urban canyon’s western hillside with 35- to 41‑degree slopes.  The site’s “Medium High” residential density designation under the City’s General Plan calls for multi-family housing with a density range of 30-44 units per acre, and General Plan Policy LU-C.4 seeks to “[e]nsure efficient use of remaining land available for residential development and redevelopment by requiring that new development meet the density minimums of applicable plan designations.”  However, General Plan Policy LU-C.1 also seeks to “[e]stablish each community plan as an essential and integral component of the City’s General Plan with clear implementation recommendations” and provides that City should “[r]ely on community plans for site-specific land use and density designations and recommendations.”  Per the Court, “the density designations and recommendations in the [North Park] Community Plan for site-specific land use are deemed to be an integral component of the General Plan and are therefore effectively integrated with and incorporated into the General Plan.”  The North Park Community plan provided in relevant part that “residential density recommendations may be subject to modification during implementation of this plan”; that “modifications to the…recommended densities for various residential areas may be incorporated into the implementing legislation”; and that “the achievability of the recommended densities may be [predicated] upon the design standards, development regulations and other regulations of the implementing legislation.”  City’s “implementing legislation” includes regulations for development of environmentally sensitive lands (which include premises with steep hillsides), and “steep hillside regulations” limiting encroachment into and development on steep hillsides, which are to be preserved in their natural state.

In applying these conflicting land use regulations to the project site, and approving the 7-unit project pursuant to the Class 32 infill exemption, the City Council found that although General Plan Policy LU-C.4 would ordinarily require new development to meet the Community Plan’s minimum recommended density –16 to 23 units on this site – that policy was not a rigid requirement, and density designations and recommendations could be modified and adjusted as provided in the Community Plan.  Existing site development constraints due to the site’s topography (80% of which was comprised of environmentally sensitive steep hillsides in a heavily vegetated urban canyon) thus allowed for a less dense, more balanced and sensitive urban infill development approach.  The Council found that the uniquely designed 7-unit project, elevated above the terrain on stilts and “cushioned” within the urban canyon’s existing vegetation, would avoid extensive steep hillside grading and vegetation removal and minimize impacts to the natural topography.

The Court of Appeal’s Decision

In affirming the trial court’s denial of a writ petition challenging the project’s CEQA exemption, the Court of Appeal deferred to the City’s findings that the project was consistent with the General Plan and its “incorporated” Community Plan.  It applied the “substantial evidence” standard to what it characterized as the City’s factual findings of project consistency with those plans, and the deferential body of law requiring project compatibility (not perfect conformity) with the general plan’s objectives, policies, general land uses, and programs; further, it noted the rule that a city’s consistency finding “can be reversed only if it is based on evidence from which no reasonable person could have reached the same conclusion.”  (Quoting A Local & Regional Monitor v. City of Los Angeles (1993) 16 Cal.App.4th 630, 648.)  The Court held that the City Council’s “extensive findings…show that it considered the General Plan, the Community Plan, and City’s steep hillside development regulations in approving the Project and, in doing so, expressly balanced the competing interests of the General Plan and the Community Plan’s policies and objectives of providing multifamily housing with a medium-high density at the Project’s site against the purpose of City’s steep hillside regulations to protect such environmentally sensitive lands.  Based on our review of the record, we conclude that City acted reasonably and did not abuse its discretion by balancing those competing, and necessarily (in this case) conflicting, policies and regulations and finding that the Project’s density of seven dwelling units conformed to the General Plan, the Community Plan, and City’s steep hillside development regulations.”

Accordingly, the Court rejected plaintiff/appellant’s contention that the recommended densities were rigid requirements, necessitating a general plan amendment to approve the project and thus precluding use of CEQA’s Class 32 infill exemption.  The Court noted that even if it viewed the issues as pure questions of land subject to de novo review, as appellant urged, its independent interpretation of the City’s General and Community plans and land use regulations would not change its conclusions or the result.

Finally, the Court rejected –as waived and forfeited both in the trial court and on appeal – appellant’s claim that City failed to comply with Government Code § 65863, a housing element inventory law which requires that certain findings be made by the local agency to support actions permitting density reduction below the range of dwelling units identified in its general plan’s housing element.  Because appellant’s housing element law argument was “buried in a footnote” in each of its opening trial and appellate court briefs, and was not supported by substantive legal analysis in either, the Court held it was waived and forfeited, and it thus disregarded the argument and expressly declined to reach its merits.

Key Takeaways and Implications

A local agency’s general plan is its land use “constitution” and a project that is inconsistent with it cannot be approved.  While general plans (like zoning) can be, and often are amended to allow approval of otherwise inconsistent proposed projects, such projects cannot qualify for CEQA’s Class 32 urban infill development categorical exemption.  However, as well illustrated by the Court’s opinion, general plan policies, goals and objectives are typically not drafted as rigid or inflexible requirements, and while the ultimate consistency determination and its legal consequences are binary in nature, the process of determining general plan consistency vests broad discretion in the agency to consider, weigh and balance its general plan’s competing and often conflicting policies in determining whether a particular project is “compatible” with them.  The law affords extreme deference to the local agency’s ultimate consistency determination, particularly where (as here) its findings reflect that it carefully considered and thoughtfully balanced the conflicting policies, and courts will thus not disturb the determination unless, based on the record, no reasonable person could have agreed with it.  That this same analysis applies in determining whether CEQA Guidelines § 15332(a)’s general plan consistency requirement is satisfied is logical and unsurprising.

Lest local agencies misinterpret the Court’s decision to hold that they may ignore applicable requirements of housing law relating to density reduction, however, they should think hard and twice.  The Court of Appeal rejected appellant’s housing element arguments solely on procedural, not substantive, grounds, observing that “issues do not have a life of their own” and that appellant had waived and forfeited these arguments (without regard to their substantive merit) by failing to adequately preserve and develop them in the briefing.

 

Questions? Please contact Arthur F. Coon 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.