In a partially published opinion filed October 31, 2024, the Second District Court of Appeal (Div. 1) held, in light of AB 1307 and the Supreme Court’s decision in Make UC a Good Neighbor v. Regents of University of California (2024) 16 Cal.5th 43 (”Make UC II”), that noise from residents congregating on a USC-area residential housing project’s rooftop decks “do[es] not constitute a significant environmental effect impeding application of the Class 32 exemption[,]” including through attempted invocation of the unusual-circumstances exception. West Adams Heritage Association et al. v. City of Los Angeles (Robert Champion at al, Real Parties in Interest) (2024) 106 Cal.App.5th 395. The Court held that reversal was required for another reason, however, as the City failed to determine the project’s consistency with an applicable redevelopment plan, which the City had by ordinance incorporated into its applicable zoning, prior to granting the exemption. (In the unpublished portion of its opinion, which won’t be further discussed in detail here, the Court also rejected appellants’ CEQA challenges to the infill exemption based on alleged significant traffic safety, historical resources, and cumulative impacts.)
Relevant Factual and Procedural Background
Located on a 2.8-acre site on the southeast corner of West Adams Boulevard and Severance Street, less than one mile from the USC campus, the project would demolish an existing two-story building (used by USC for office, childcare and classroom facilities) and parking lot, and replace them with a 7-building residential apartment complex. Six of the buildings would be three stories tall, would sit atop a single-level podium parking structure, and would collectively contain 102 apartment units, five of which would be restricted affordable units for very low income households. The seventh building would be a four-story clubhouse providing residents with a variety of amenities. Outdoor spaces would include a pool atop the podium structure and spaces atop the apartment building roofs with landscaping and outdoor lounge and cooking facilities.
After review and a hearing, a City zoning administrator approved a Class 32 exemption, a CUP and a density bonus for the project, but denied a site plan review based on incompatibility with surrounding uses due to its size, scale and massing. Among the concerns were that the “rooftop decks” would create active uses potentially adversely affecting surrounding multi-family structures through resident noise and music. After the filing of dueling administrative appeals challenging the various grants and denial, the project was revised to, inter alia, more fully screen the parking podium structure form street views and move the rooftop amenities further away from the building perimeter to minimize impacts on neighboring properties. The planning commission then denied the appeal of the approvals and granted the appeal of the site plan denial, thus determining the project was subject to a Class 32 exemption; the City Council then denied the project opponent’s further appeal.
Appellants, two entities representing project area households and businesses, filed a writ petition in the trial court challenging the CEQA exemption and also alleging the project violated state planning and zoning law and City’s municipal code. The trial court denied the petition, appellants appealed, and (in its initial 2023 decision) the Court of Appeal reversed, holding the zoning administrator’s noise findings precluded use of the Class 32 exemption. The Supreme Court then granted review, vacated that decision, and ordered the Court of Appeal to reconsider in light of AB 1307 and the high court’s Make UC II decision; the Court of Appeal’s instant decision followed.
The Court of Appeal’s Opinion
Residential Project Occupant Noise Is No Longer A Significant Environmental Impact And Thus Cannot Preclude Use of the Class 32 Exemption
The Court of Appeal opinion’s most significant holdings are that resident noise – anticipated from social interactions, including amplified music, in the project’s rooftop areas – no longer provides a basis to find the Class 32 exemption inapplicable, whether on its face or due to application of the unusual circumstances exception. The Class 32 exemption applies to “in-fill development” when the following conditions are satisfied:
(a) The project is consistent with the applicable general plan designation and all applicable general plan policies as well as with applicable zoning designation and regulations. [¶] (b) The proposed development occurs within city limits on a project site of no more than five acres substantially surrounded by urban uses. [¶] (c) The project site has no value, as habitat for endangered, rare or threatened species. [¶ ] (d) Approval of the project would not result in any significant effects relating to traffic, noise, air quality, or water quality. [¶] (e) The site can be adequately served by all required utilities and public services.”
(Slip Opn., at p. 12, quoting CEQA Guidelines, § 15332.)
The exemption is, of course, subject to several exceptions, including (as relevant to arguments made in the instant appeal), “if the cumulative impact of successive projects of the same type in the same place, over time is significant” (CEQA Guidelines, § 15300.2(b); “[if] there is a reasonable possibility that the activity will have a significant effect on the environment due to unusual circumstances” (id., subd. (c)); or if the project “may cause substantial adverse change in the significance of a historical resource[.]” (Id., subd. (f).)
An agency’s determination that a project falls within a categorical (or, for that matter, a statutory) exemption is reviewed by courts for substantial evidence support, with all evidentiary conflicts resolved and all legitimate and reasonable inferences indulged to support the agency’s decision. (Slip Opn., at p. 13, citing Holden v. City of San Diego (2019) 43 Cal.App.5th 404, 410.) By contrast, issues of whether an agency followed proper procedures and questions of statutory interpretation are reviewed de novo. In construing a statute, courts adopt the construction best effectuating the Legislature’s intended purpose, considering first the statute’s words “as the most reliable indicator of legislative intent” and giving them “‘their usual and ordinary meaning’ viewed in the context of the statute as a whole.” (Quoting Make UC II, 16 Cal.5th at 55.) In cases of ambiguity, where statutory language is susceptible to more than one reasonable meaning, courts “consult other indicia of the Legislature’s intent, including such extrinsic aids as legislative history and public policy[.]” (Ibid., citations omitted.)
After rejecting appellants’ arguments that the appeal was moot – based on respondents’ alleged concessions in separate litigation involving an alternative, smaller project approved by City on the site – the Opinion proceeded to address the “rooftop noise” issue and concluded “our original holding cannot stand in light of Assembly Bill No. 1307 and Make UC II.” (Slip Opn., pp. 14-17.)
AB 1307 was enacted while Make UC II – the infamous U.C. Berkeley “student party noise” CEQA case – was under review in the Supreme Court. Codified at Public Resources Code section 21085, it provides that “[f]or purposes of [CEQA], for residential projects, the effects of noise generated by project occupants and their guests on human beings is not a significant effect on the environment.” Make UC II observed that the statute’s legislative history “overwhelmingly establishe[d]” it was enacted to abrogate Make UC I, and also held that the statute applied broadly to land use planning decisions involving housing and not just the approval of specific housing development projects. The concerns of noise and music impacts form the USC-area project’s rooftop decks impacting neighboring properties were akin to the “crowds of people talking, laughing, shouting, and playing music that disturbs neighboring residents” at issue in Make UC I. Under AB 1307 and Make UC II, such noise is not a significant environmental effect for purposes of CEQA and therefore such noise concerns do not preclude application of a Class 32 exemption.
The Court rejected appellants’ attempts to distinguish Make UC II as involving “social noise” from unamplified human voices during social interactions rather than potentially amplified music emanating from rooftop decks. While Make UC II may have involved “social noise” of a different type, it did not limit section 21085’s definition of “noise” to only that type, and its reference to Make UC I showed that it recognized that “playing music” was among the types of noise included in the holding of Make UC I that the Legislature intended to abrogate. Further, the Legislature rejected an originally proposed version of AB 1307 that would have defined noise more narrowly as “unamplified voices of residents,” and thus so defining it would undercut the legislation’s purpose of stemming future litigation against residential projects based on speculation about unwanted resident noise. Nor would limiting the statute’s scope to unamplified human voices fit within the reasonable scope of the statutory language.
Nor did the Court find merit in appellants’ attempts to distinguish the case based on the developer’s private (versus public) identity or as involving a particular design feature (rooftop decks). It also rejected their attempts to interpret the Legislative Counsel’s digest as limiting the statute’s application to EIRs and negative declarations, as opposed to other CEQA proceedings such as those involving exemptions.
It also did not find significant that the legislation did not change the “noise” language of the Class 32 exemption itself, observing that the exemption’s “concern with noise would appear to remain salient in other circumstances, such as in nonresidential projects, or residential projects in which there are significant noise effects apart from the effects of noise generated by occupants and their guests on human beings.”
The Court also rejected appellants’ assertion that AB 1307 should apply only prospectively, noting that courts apply the current law as of the time of judgment in mandate proceedings. It likewise rejected the argument that the statute’s “retroactive” application should be limited to only the Make UC I decision.
The Unusual Circumstances Exception Also Cannot Apply Based On Allegedly Significant Noise Impacts That Are No Longer Cognizable As Such Under AB 1307
The Court went on to address and dispose of appellants’ “unusual circumstances” exception argument, holding that even “[a]ssuming arguendo the rooftop decks are an unusual circumstance, the exception nonetheless would not apply because the only environmental impact appellants identify is neighbors being bothered by noise from people congregating and listening to music on the decks.” Under AB 1307, such noise cannot constitute a significant environmental effect and the exception – which is premised on the showing of such an effect – therefore cannot apply.
City Must Find Project Consistent With Applicable Redevelopment Plan
Before Granting Class 32 Exemption
In the remaining published portion of its opinion, the Court of Appeal held that appellants were correct in contending that the City prejudicially erred by failing to determine whether the project is consistent with an applicable redevelopment plan that City had incorporated into its zoning before granting the Class 32 exemption. (Contrary to respondents’ procedural arguments under the Rules of Court governing supplemental briefing following grants and transfers from the Supreme Court, this previously unreached issue was now properly before the Court of Appeal.)
Because the Class 32 exemption requires that a project be “consistent with the applicable general plan designation and all applicable general plan policies as well as with applicable zoning” (CEQA Guidelines, § 15332(a)), and because the City through a 2019 ordinance effectively incorporated the land use requirements of the applicable redevelopment plan into its zoning ordinance (and even granted them precedence), the City was required to evaluate the project’s consistency with the redevelopment plan and grant the exemption only after finding no conflicts. While the 2019 ordinance was not in effect when the City’s planning department initially granted, and when the planning commission denied an appeal of, the exemption, it was in effect when the commission issued a corrected letter of determination and the Council denied a later appeal, and the Court applied the current law (in terms of the City’s Code) in this mandate proceeding, reasoning that no vested rights had intervened and that CEQA Guidelines § 15007’s rule of prospective application did not apply.
Likewise, the Court rejected respondents’ CEQA arguments against applying current law in this regard based on considerations favoring certainty and finality as expressed in Public Resources Code § 21166 and the Supreme Court’s decision in Friends of College of San Mateo Gardens v. San Mateo County Community College Dist. (2016) 1 Cal.5th 937. Distinguishing San Mateo Gardens as dealing with a situation where an initial EIR or negative declaration has been certified and the time for challenging the document has long expired, leaving the issue as whether circumstances have changed enough to justify repeating a substantial portion of the process, the Court stated: “Rather, the issue in this case is whether the City complied with prerequisite CEQA obligations in granting the Class 32 exemption. Public Resources Code section 21166, and the policy behind it, do not apply here.”
Further, the Court rejected City’s argument that it could postpone the required redevelopment plan/zoning consistency analysis to a future time through imposition of a condition on the project requiring a consistency determination by the City prior to building permit issuance. Because the standard of review required the City’s exemption determination to be supported by substantial evidence, the Court reasoned as to this contention: “A determination that has yet to be made cannot provide substantial evidence of anything, CEQA exemption or otherwise. Respondents cite no authority allowing us to rely on future events to supply prerequisite findings.” Likewise, respondents’ assertion that it was City’s “longstanding practice” to so defer redevelopment consistency determinations was unavailing. Per the Court: “Longstanding practice or administrative convenience cannot override the fact that under LAMC section 11.5.14, the redevelopment plan’s zoning provisions are now part of the City’s zoning ordinance. In the absence of a redevelopment plan consistency determination, then, there is no substantial evidence of zoning consistency, a required element of a Class 32 exemption. Given the substantial evidence requirement, we disagree that CEQA allows the City’s deferred approach.”
The Court likewise brushed aside respondents’ arguments that CEQA favors early environmental review, and does not require the simultaneous conduct of CEQA and other regulatory review processes, and that categorical exemption determinations do not require formal findings. Per the Court: “The fact that findings in support of a CEQA exemption need not be formal or detailed does not negate the requirement that findings must be made in the first place.” As redevelopment plan consistency findings were concededly not made here (as was also confirmed by the record), the City failed to find the project consistent with applicable zoning as required to grant the Class 32 exemption.
The Redevelopment Plan’s Density Provisions Do Not Apply To The Project Under Preemptive State Density Bonus Law
Somewhat cushioning the blow to respondents from the reversal and writ issuance mandated by its redevelopment plan consistency holding, the Court went on to reject appellants’ argument that “the project already is inconsistent with the redevelopment plan because the City calculated the project’s allowable density based on the City’s generally applicable zoning ordinance as opposed to the redevelopment plan.” Rather, the Court held the state Density Bonus Law (Gov. Code, § 65915) preempts the redevelopment plan to the extent it would impose conditions on the project’s density bonus not required by state law, and that it requires the bonus to be calculated as “a density increase over the otherwise maximum allowable gross residential density as of the date of the [project] application[.]” Even if redevelopment plans could ever govern density determinations (an issue the Court found no need to reach), it held that since the redevelopment plan here had not yet been incorporated into the City’s zoning on the date the project application was filed, the state-mandated maximum allowable density applicable to the project here is the 29 units per gross acre allowed by the generally applicable zoning ordinance in effect on the project’s application date, not the 24 units per acre ostensibly allowed under the later-incorporated redevelopment plan. “Maximum allowable residential density” as defined in the Density Bonus Law refers to “the greatest number of units allowed under the zoning ordinance, specific plan, or land use element of the general plan[,]” indicating that where a locality has conflicting density provisions the one allowing for construction of the greatest number of units governs, which is also consistent with the Legislature’s guidance that the law be liberally interpreted to produce the maximum number of total housing units. (Gov. Code, § 65915(r).)
Per the Court: “In sum, under [preemptive] state law the general zoning ordinance, not the redevelopment plan, is the “applicable zoning” ([CEQA Guidelines,] § 15332, subd. (a)) for this particular project on the issue of density. The City’s reliance on the zoning ordinance rather than the redevelopment plan when determining the project’s maximum allowable density therefore is not grounds to deny a Class 32 CEQA exemption.” Further, additional findings required by the redevelopment plan as prerequisites to a density bonus are preempted by state law. (Gov. Code, § 65915(a)(2).)
The Court’s Bottom Line: A Noise Precedent and A Limited Remedy
The Court of Appeal reversed, ostensibly instructing the trial court to grant a very narrow and limited writ setting aside only the Class 32 exemption and directing the City to determine redevelopment plan consistency before reinstating it. The Court emphasized its “scope of remand is cabined by our holdings in this opinion.” Per the Court: “The sole issue upon which the City must make further findings before reinstating the Class 32 exemption is redevelopment plan consistency. Appellants may not raise challenges to the Class 32 exemption beyond redevelopment plan consistency, nor may they relitigate the challenges we have rejected herein. Our opinion further forecloses argument that the project’s inconsistency with the redevelopment plan’s base density or density bonus requirements precludes application of the Class 32 exemption. [¶] As noted, the City has imposed as a condition of approval that the planning department determine redevelopment plan consistency before granting the project a building permit. Our limited remand thus should not impose any additional burden or delay.”
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