Hastings Environmental Law Journal, Vol. 25, No. 1, Winter 2019 Spatial inequality, however, is not limited to exclusive suburbs within metropolitan areas. Gentrification within central cities, for example, is associated with segregation, exclusion, discrimination, 1
99 and the displacement of low-income
communities. 200 Discussing spatial inequality thus requires consideration of exclusionary strong-market cities 20 1 and the growing suburbanization of the poor.20 2 One theory (built on prior legal and economic studies) about exclusionary zoning within the strong market central city might explain the persistence of spatial inequality as more affluent populations move into formerly low-income neighborhoods: Demand for development controls increases as cities become denser and richer, evidenced by the tightening of development controls as affluent individuals return to cities, reversing decades of urban flight. 203 Gentrification, under this theory, would stem from the gradual tightening of restrictions that reflect the preferences of newly arrived affluent urban workers who prefer wealthier established neighborhoods that disallow new development and who flock to the lower-income neighborhoods adjacent to these wealthy anti-development areas, driving up the rents and disrupting the normal filtering process. 2°4 This theory of 1983); S. Burlington Cry. NAACP v. Twp. of Mount Laurel (Mount Laurel I), 336 A.2d. 713 (N.J. 1975). See also BEEN, supra note 89, at 218.
199. See generally john powell, Sprawl, Fragmentation, and the Persistence of Racial Inequality, in URBAN SPRAWL: CAUSES, CONSEQUENCES, AND POLICY RESPONSES, 104 15 (Gregory D. Squires ed., 2002); Elvin K. Wyly & Daniel J. Hammel, Gentrification, Segregation, and Discrimination in the American Urban System, 36 ENV'T AND PLAN. A, 1215 39 (2004) (finding evidence of intensified discrimination in lending and exclusion in gentrified neighborhoods).
200. See The Urban Displacement Project, Executive Summary (2015) (using statistical analysis of demographic and land use datasets to find that "more than half of lowincome households, all over the nine-county region, live in neighborhoods at risk of or already experiencing displacement"); but see Lance Freeman, Displacement or Succession, 40 URB. AFF. REv. 463, 467 (2005) (using longitudinal survey data to find that "there is relatively little in the way of persuasive empirical evidence that suggests [that displacement] is indeed how gentrifying neighborhoods change")
201. See HUTSON, supra note 87, at 13 14; Been, supra note 89, at 219 23 (discussing the scholarly works exploring exclusionary zoning within cities); MANGIN, supra note 197.
202. Elizbeth Kneebone & Emily Garr, The Suburbanization of Poverty: Trends in Metropolitan America, 2000 to 2008, BROOKINGS INST. (2010) (finding that "while poverty has grown on the whole, the most recent data also make clear that American poverty is becoming an increasingly suburban phenomenon").
203. MANGIN, supra note 198, at 92.
204. Id. at 95. Filtering is a theory based on supply-side solutions to the inadequate supply of affordable housing stock, in which the construction of middle- to upper-quality housing stock opens up opportunities for lower-quality housing stock as middle to upperincome households occupy better housing. See William C. Baer & Christopher B.
Williamson, The Filtering of Households and Housing Units, 3 J. OF PLAN. LITERATURE 127, 128 29 (1988). However, economists have noted that filtering may be an inefficient tool to support increased housing for low-income households in markets with high development costs. In such contexts, any gains in affordable housing stock might be accompanied by harms associated with downgrading and abandonment of neighborhood environments providing the low-income housing stock. See Galster & Rothenberg, Filtering in Urban Agenda Item #5.1.
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exclusionary zoning in central cities influences current legal research in this arena.
205
Based on this theoretical framework, by opposing market-rate development in their neighborhoods and rejecting a supply-side solution to the gentrification problem, some anti-gentrific ation advocates, community development, and affordable housing practitioners may be working against their own interests. 20 6 The author did not propose inclusionary housing incentives as a response to the exclusionary zoning within the central city but suggested reducing regulation incrementally-particularly aesthetic and historical preservation. 20 7 Easing local control over land use and supporting a supply-side solution (even for market-rate development) to gentrification and displacement is a dominant theme in California's public policy debate and public discourse about potential solutions to the housing crisis, but it is not without controversy. 208 For some, the term "exclusionary zoning" suggests that the remedy would be more permissive density. But a 2015 study suggests a more complex problem. 20 9 Comparing land use stringency data from the WRLURI survey with a segregation index, Lens and Monkkonen found that the overall WRLURI score-a measurement of local regulatory stringency-did not correlate with income segregation, which suggests that not all land use regulations contribute to class Housing: A Graphical Analysis of a Quality-Segmented Market, 11 J. OF PLAN., EDUC. & RES. 37, 48-49 (1991).
205. See e.g., Been, supra note 89, at 222; Wendall Pritchett & Shitong Qiao, Exclusionary Megacities, 91 S. CAL. L. REv. 34 (2018) (forthcoming). 206. See MANGIN, supra note 198, at 93 94. Others have made similar arguments but acknowledge the methodological challenges of determining whether increasing supply contributes to increased housing costs. See Vicki Been, Ingrid Gould Ellen & Katherine O'Regan, Supply Skepticism: Housing Supply and Affordability, NYU FURMAN CTR (Draft Oct. 26, 2017), https://perma.cc/YDU7-PJNX; see also Been, supra note 89, at 244-45. 207. MANGIN, supra note 198, at 119 20.
208. The Yes In My Backyard (YIMBY) movement is an example. See Let's End California's Housing Crisis: Support SB 827 - Sen. Wiener's Transit Rich Housing Bonus Bill, CAL. YIMBY (Oct. 27, 2018), https://perma.cc/J5LA-3G6A; see also LAO REPORT, supra note 5 (using data from The Displacement Project to conclude that increasing supply of market-rate housing would curtail displacement of low-income households); but see Miriam Zuk & Karen Chapple, Housing Production, Filtering and Displacement:
Untangling the Relationships, BERKELEY IGS RES. BRIEF (May 2016), https://perma.c c/SJX5-YP3S (responding to this report and offering a more nuanced analysis: the data showed market-rate and subsidized housing reduce displacement pressures at the regional level, but not at the block level, at least not in San Francisco, and that market-rate production is associated with higher housing costs for low-income households, but lower median rents, in subsequent decades). See also Miriam Zuk, Ian Carlton, & Anna Cash, SB 827 2.0, What are the implications for communities in the Bay Area? THE URB. DISPLACEMENT PROJECT (Oct. 1, 2018) https://perma.cc/3H9A-AJKT (finding that the SB-827 proposal, to reduce discretionary review of certain types of infill development near transit, would have resulted in a six-fold increase in feasibility of market-rate housing in affluent areas, and a seven-fold increase in inclusionary housing in moderate income areas, but that 60% of the financially feasible development was located in gentrifying or low-income areas, and over 65% of residential demolitions for development would have occurred in these neighborhoods). 209. LENS & MONKKONEN, supra note 129, at 12.
Agenda Item #5.1.
Hastings Environmental Law Journal, Vol. 25, No. 1, Winter 2019 segregation. 210 Density restrictions are strongly correlated with income segregation and seclusion of the super elite. 211 But the correlation was equally strong for jurisdictions that mandated high minimum densities as well as those that kept densities low. 212 Understood within the context of the Rothwell & Massey work, this suggests that other restrictive forces are at play even in areas with permissive density-like central cities. Notably, income segregation is higher where local governments are more involved in entitlement approvals and communities put more pressure on the government to control growth213 and lower in places with a higher degree of state involvement in local planning decisions. 214 Jurisdictions that require multiple levels of government approvals to build are more segregated. 215 Finally, the authors observed higher levels of income segregation in MSAs with central cities that regulate land use more stringently than surrounding suburbs. 216 The authors concluded that inclusionary incentives and reduced local control might be the most effective at reducing segregation.217
There is little research that aims to identify which land use regulations may be contributing to exclusion within cities generally, and insufficient recent research that focuses specifically on California. 218 There are two recent reports that explore the role of CEQA litigation as a tool to block infill development, although both examine CEQA's impact on more than housing development. In 2015, the law firm Holland & Knight produced a widely circulated report analyzing all CEQA lawsuits filed within a fifteen-year period and found that eighty percent of CEQA litigation in the past fifteen years targeted infill development. 219 While scholars have criticized this report for its overly inclusive definition of infill development, 220 this observation finds some support in earlier studies that found most CEQA litigation to occur in large cities.221 Although it does not focus 210. Id. at 11.
211. Id.
212. Id. at 11-12.
213. LENS & MONKKONEN, supra note 129, at 12.
214. Id.
215. Id.
216. Id.
217. Id. at 11-12.
218. Anika Singh Lemar, Zoning as Taxidermy: Neighborhood Conservation Districts and the Regulation of Aesthetics, 90 IND. L. J. 1525, 1563 (2015). Lemar, for example, explored the use of aesthetic regulations within walkable "conservation neighborhoods" with close proximity to the urban center and transit specifically conservation districts to constrain supply, but none within California. Lemar posits that urban residents are using conservation districts as a new public law form of private Covenants, Conditions, and Restrictions ("CC&Rs")-a hypothesis she finds support for in factual findings from published state opinions. Unlike CC&Rs, however, which must be adopted unanimously, a vocal minority of the neighborhood can organize to form a conservation district.
219. Jennifer Hernandez, David Friedman & Stephanie DeHerrera, In the Name of the Environment, HOLLAND & KNIGHT (2015).
220. See Sean Hecht, Anti-CEQA Lobbyists Turn to Empirical Analysis, but are Their Conclusions Sound?, LEGAL PLANT (Sept. 28, 2015), https://perma.cc/B7P3-7MB8. 221. See LANDIS, PENDALL, OLSHANSKY & HUANG, supra note 42, at 110 11 (1995).
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exclusively on housing development, it appears consistent with the observations of Mangin 2014 and Lens & Monkkonen 2016 that dense cities are using land use regulation as an exclusionary tactic. The 2016 report from BAE Economics, however, found low rates of litigation and infrequent use of EIRs.222 C. How the limits of past research make it challenging to inform proposed legal reform
Past research tells us that stringency in land use regulation is correlated with certain outcomes-be it reduced housing supply and increased housing costs, or increased income segregation and spatial inequality. But it does not establish causation, nor does it identify which land use regulations, specifically, are correlated with these outcomes. It may be that increasing housing supply across multiple income levels or redressing spatial inequality within our urban communities is not as simple as drastically reducing regulation. And yet proposed legal reforms continue to target process, advancing solutions like reducing the number of approvals, more state oversight over local zoning decisions, 223 and CEQA reform. 224 Each of these elements of process serve important goals, like open government, public participation, and disclosure and mitigation of potential environmental harms. If we are uncertain which element of process increases 222. See JANET SMITH-HEIMER ET AL., supra note 194. A much earlier study used a survey and found that responses indicated CEQA litigation is relatively rare, with fifty-eight percent of the responding communities reporting no CEQA litigation between 1985-1990.
See LANDIS, PENDALL, OLSHANSKY & HUANG, supra note 42, at 90. Eighty percent of jurisdictions reported zero or one lawsuits within that five-year timeframe. The authors estimated that across California, there is one lawsuit per 354 CEQA reviews. Attempts to find demographic variables driving the variation across communities were unsuccessful; the only statistically significant correlation showed that CEQA litigation is more common in larger cities, in white-majority cities, and in Democratic-majority cities. But this data predates recent CEQA streamlining initiatives as well as case law that made business, rather than environmental interests, easier to leverage. See e.g., Save the Plastic Bag Coalition 254 P.3d at 1011-12 where the California Supreme Court refused to apply the federal "zone of interests" test for CEQA litigation.
223. For example, decisions at the state-level although perhaps less biased towards local political power players could take much longer than decisions at the local level. See e.g., FISCHEL, supra note 5, at 276 (regional governance structures in Oregon and Washington have had mixed results, and New Jersey Mt. Laurel Fair Share requirements have failed to yield integrated demographic mixes). Research shows that Massachusetts Chapter 40B has been effective, although it is difficult to disentangle the coercive threat of state action with local incentives to construct affordable housing. See Carolina K. Reid, Carol Gallante & Ashley F. Weinstein-Carnes, Borrowing Innovation, Achieving Affordability: What We Can Learn from Massachusetts Chapter 40B, TERNER CTR. FOR HOUSING INNOVATION (2016).
224. See Dan Walters, Brown Talks CEQA Reform, but Hasn't Done It, CALMATTERS (Aug. 2, 2018) https://perma.cc/EF2X-VD2Y (discussing Governor Brown's call for comprehensive CEQA reform). Moderate reforms have succeeded in the legislature.
See e.g., A.B. 2341 2017 2018 Leg., Reg. Sess. (Cal. 2018) (reducing significance of certain aesthetic impacts); A.B. 2782 2017 2018 Leg., Reg. Sess. (Cal. 2018) (allowing an EIR to discuss non-environmental benefits of a proposed project).
Agenda Item #5.1.
Hastings Environmental Law Journal, Vol. 25, No. 1, Winter 2019 housing costs, or exacerbates or contributes to segregation or gentrification, eliminating or curtailing process may sacrifice one set of policy goals without achieving another.
The research showing that permissive density does not equate with spatial equality is particularly troubling for California. California's signature housing legislation, the Housing Element of the General Plan, requires jurisdictions to plan for and zone for density to accommodate their portion of their regional housing need. 225 In addition to well-noted problems, (for example, Housing Element law places no affirmative production requirement on the jurisdiction beyond rezonings),2 26 this model implicitly assumes that density is a proxy for affordability. 227 As the most recent work around exclusionary central cities suggests, zoning for density does not necessarily result in opening up access to cities, as there are likely non-zoning barriers to development within exclusionary central cities.
More inquiry into how the land use approval process plays out within individual cities is therefore necessary to implement effective state-level reform.
In essence, we are grappling with a series of local problems that have regional and statewide implications. Unlike surveys that often depend on generalizations across multiple jurisdictions and necessarily depend on perceptions of the regulatory process by the surveyed stakeholders, case studies can effectively unpack the local variation and the potential impacts of specific regulations within these local contexts and ground-truth actual outcomes of land-use regulatory processes. And because land use planning has changed over the past twenty years, current data that reflects these changes is needed to explore these issues.
Part II: Methods
Crafting effective and targeted policy interventions to promote equitable infill development requires understanding what legal barriers to increased housing production exist; what legal tools afford meaningful participation in land use planning; and how current development patterns are affecting affordable housing opportunities within TOD areas or areas receiving substantial transit investment.
Our study seeks to address these issues by examining whether local land use law and/or environmental regulations governing infill development individually, or in conjunction, present significant obstacles to equitable infill development. Based on our review of existing research (discussed in Part I) we hypothesized that:
225. See CAL. Gov'T. CODE § 65583 et seq. The affirmative rezoning obligation only applies, however, if a jurisdiction has failed to meet certain obligations for example, by failing to zone for sufficient sites to meet its share of the Regional Housing Needs Assessment (RHNA) for the prior planning period.
226. Paul G. Lewis, California's Housing Element Law: The Issue of Local Noncompliance 10, PUB. POL'Y INST. OF CAL. (2003).
227. Id. (finding that "cities with significant housing unit goals are left with ... rezoning existing neighborhoods for higher density housing").
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1. There are significant legal, planning, and regulatory barriers to advancing equitable infill development within transit-accessible neighborhoods in high cost coastal cities;
2. The most significant barriers will emerge in local land use regulations that limit or slow infill development in transit-accessible neighborhoods and not in state environmental regulation; and,
3. State law aimed at incentivizing infill development in transit-accessible neighborhoods is applied differently (and sometimes ineffectually) within these local contexts.
Based in part on these descriptive hypotheses, we also began with a baseline hypothesis that future policies to advance state-level GHG reduction goals in a way that also promotes equitable infill development will require policy interventions that meet a number of important requirements, including (a) accounting for the heterogeneity of local regulations; (b) accounting for varied application of state streamlining provisions (or varied planning practice) in relationship to the political culture and revenue demands of the specific local context; and (c) either are (i) constructed at the local level to advance equitable infill development in transitaccessible locations; or (ii) are carefully targeted approaches to reducing local discretion over proposed infill development in transit-accessible locations that nonetheless protect the voice of vulnerable communities, minimize or prevent displacement of existing low-income residents, and ensure access to transit for future low-income residents. To test our hypotheses, we employed a case study approach that joins qualitative 22s and legal research methods, employing overlapping phases of data collection and sequenced analysis. 229 A. Choosing study sites: focusing first on the Bay Area Our first phase of research involved selecting strong market charter cities 230 of various sizes within California major metropolitan areas (specifically, urban core cities and first ring suburban communities) experiencing robust 228. See JOHN W. CRESWELL, RESEARCH DESIGN: QUALITATIVE, QUANTITATIVE, AND MIXED METHODS APPROACHES, 185-204 (Vicki Knight et al. eds., 4th ed. 2014). 229. See ROBERT K. YIN, CASE STUDY RESEARCH: DESIGN AND METHODS (SAGE Publications, Inc. 6th ed. 2014); BRUCE L. BERG & HOWARD LUNE, QUALITATIVE RESEARCH METHODS FOR THE SOCIAL SCWNCES 325 (Pearson ed., 8th ed. 2011). 230. Charter cities within California enjoy some freedom to legislate at the local level over "municipal affairs" even if a conflict with state law may exist under Article XI, section 5 of the California Constitution. Although the California Constitution does not expressly define "municipal affair," land use and zoning are consistently classified as exempt from the planning and zoning provisions of the California Government Code, unless the city's charter indicates otherwise. See e.g. CAL. GOV'T CODE §§ 65803, 65860(d); City of Irvine, 30 Cal. Rptr. 2d at 799 800.
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Hastings Environmental Law Journal, Vol. 25, No. 1, Winter 2019 economic growth. The cities also needed to have transit accessibility or have capacity for TOD 231 and be in high demand. 232
We began our work within the Bay Area, with a focus on San Francisco and San Jose. In 2015, the California Legislative Analyst's Office attributed high housing costs statewide in large part to the lack of housing supply in California's coastal communities. 233 This report identified the San Francisco-Metropolitan Division ("MD") and the San Jose-Sunnyvale-Santa Clara MSA as having the first and second highest housing costs in the state in 2015, respectively. Using American Community Survey data and California Department of Housing and Community Development's State Income Limits for 2017, we selected additional cities within the San Francisco-Oakland-Hayward MSA and San Jose-Sunnyvale-Santa Clara MSA using multiple criteria, including: demographic criteria, (population size, average household income, percentage of the population living in poverty, and area median income), land area, and population density.234 To be considered for the study, each city needed a minimum population of 50,000 people and a minimum land area of 7 square miles. 235
We used California's Regional Housing Need Allocation ("RHNA") 236 to steer us towards jurisdictions that have transportation and other infrastructure in place or planned, and can sustainably support increased housing supply237 including infill development. 238 All of our first five selected cities face acute 231. PETER CALTHORPE, URBANISM IN THE AGE OF CLIMATE CHANGE (Island Press ed., 2d ed. 2010).
232. MALO HUTSON, supra note 87, at 20; PAUL KNOX & LINDA MCCARTHY, URBANIZATION: AN INTRODUCTION TO URBAN GEOGRAPHY (Pearson, 3d 2012). 233. LAO REPORT, supra note 5, at 3.
234. Area Median Incomes, or AMI, are provided by California's Department of Housing and Community Development State Income Limits, which provides income eligibility criteria for affordable housing programs. See generally, Memorandum from Jennifer Seeger, Assistant Deputy Director Division of Housing Policy Development to Interested Parties (June 9, 2017), https://perma.cc/T9EU-AK4E. 235. Cities that are too small (in population or land area) may not provide enough data for any meaningful analysis.
236. RHNA is a goal of housing production that each jurisdiction within the state is mandated to achieve through the local jurisdiction's Housing Element of its General Plan. 237. Senate Bill 375 mandates that each of the state's 18 Metropolitan Planning Organizations develop a Sustainable Communities Strategy that links housing development with transportation investments. The Association of Bay Area Governments' (ABAG) Regional Housing Need Plan: San Francisco Bay Area 2014-2022, states its RHNA allocation methodology complies with SB-375 because it uses factors that "aim to expand housing and transportation options; increase access to jobs, particularly for low-income workers; and promote housing growth in places with high quality services, such as parks and schools. ... [with] a fair share distribution between large cities and medium cities with high job growth and transit access." Regional Housing Need Plan for San Francisco Bay Area: 2014-2022, ASS'N OF BAY AREA GOv'TS at 3, https://perma.cc/B2V6-9UCP. 238. We used the RHNA to identify areas with adequate infrastructure (or planned infrastructure) but are mindful of the potentially disparate racial impact of housing allocation. See Press Release, Haas Institute for a Fair and Inclusive Society, New Research Shows Racial Disparities in Bay Area Housing Allocation Methodology (Aug. 23, 2017), https://perma.cc/VRL8-BWED.
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affordability issues, and all cities have complex land use approvals processes that typify the type of "stringent" regulation called out by existing research. Our first five cities were San Francisco, San Jose, Oakland, Redwood City, and Palo Alto. 239 B. Analyzing the law: creating planning and development ordinance summaries
We first researched local ordinances and planning code provisions most relevant to residential/mixed use development approvals, starting with the most macro planning tools (the General Plan) and then drilling down to the micro level (use and development controls). We created a summary of planning and development controls in each jurisdiction, including permitted and restricted uses, height limitations within specific neighborhoods, maximum commercial and residential density and lot coverage, minimum parking requirements, exactions, and other dedication requirements. We also identified and cataloged all characteristics of local processes that would appear to increase affordable housing supply within the city, or preserve existing affordable housing, including inclusionary housing ordinances, local referenda to generate affordable housing supply, rent stabilization ordinances, anti-demolition ordinances, and neighborhood planning that taps into state-level streamlining initiatives. This step also identified the extent of a jurisdiction's "as of right" development-meaning development that does not require a discretionary permit from a local approval body. For the vast majority of developments that require a discretionary approval, these code summaries also helped identify general approaches to density and other building form controls that drive the discretionary approval process, the internal process for obtaining a building entitlement, and the extent to which cities use long term planning to expedite environmental review. These summaries informed development data collection, later analysis, and interview questions.
C. Analyzing the projects: building the entitlement database After completing the planning code summary for a city, we built a database for each selected jurisdiction that allows us to analyze land use and environmental review requirements for residential developments along with important characteristics, such as time to entitlements completion and size. This process required an emergent design, and went through three iterations to address variation in data access across cities and newly available data.
1. Defining five or more residential units
We chose the five-unit threshold in order to capture projects that most impact California's housing and climate goals. The five-unit threshold does not 239. We limit our findings in this article to these five cities, but are currently completing research within Los Angeles, Long Beach, Pasadena, and Santa Monica.
Agenda Item #5.1.
Hastings Environmental Law Journal, Vol. 25, No. 1, Winter 2019 capture scattered site single-family homes, duplexes, or accessory dwelling units that are not developed as part of a larger development project. These scattered developments move through entitlement differently; they do not consistently present the type of dense infill development that can be the subject of the policy or political debate, and likely warrant their own research study.2t 0 We have gathered data on single-family subdivisions or duplexes where they are part of a larger development that produces more than 5 units of housing because on net they are adding substantially more housing and density than what was there before (typically vacant or commercial land in our project years). This in turn, potentially advances housing supply and climate goals. For example, Oakland's mini lot ordinance allows a developer to subdivide a single lot to create "mini" lots that would not otherwise satisfy minimum lot requirements. 241 Developers in our data years used this process frequently to subdivide a lot that would normally only permit one or two single-family homes to create five or more single-family homes. This is an important process that significantly densifies neighborhoods.
We included all projects that contained an addition of five units to the housing stock. We did not net out demolished units from the new addition of units.
Frequently, the exact number of units being demolished was not available, so for consistency, we chose to capture that the project would include demolition but disregard demolished units for the purposes of total unit count. For example, a proposal to demolish a duplex and replace it with a ten-unit building would be counted as ten units, not eight units, although we would also capture that the prior use was residential and involved demolition. If the proposal was to add five or more units to an existing residential development, we would not count the existing units in the total unit count. This would apply where there was a proposal to the convert commercial space to residential units in an existing mixed-use building, or build new units on a vacant portion of a residential site. These types of developments occurred infrequently in our database years.
We defined residential units broadly, encompassing live-work spaces, single room occupancy hotels, deed-restricted affordable housing, and student housing. We did not include facilities for the elderly dedicated to providing medical care or hospice care. We also did not include residential facilities constructed by hospitals to house patients' families.
240. The entitlement processes for individual single-family homes and duplexes are quite different than for larger projects. Individual homes and accessory dwelling units go through more streamlined processes than larger developments, frequently because they don't require the land divisions that a larger single-family subdivision would require. See infra Figure 4; see also S.B. 1069,2015-2016 Leg., Reg. Sess. (Cal. 2016); A.B. 2299, 2015- 2016 Leg., Reg. Sess. (Cal. 2016) (streamlining approval processes for accessory dwelling units).
241. OAKLAND MUNI. CODE § 17.142.010.
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2. Defining project years: 2014, 2015, and 2016
We included projects that received all the entitlements necessary to file for a building permit in 2014, 2015, and 2016. Entitlement includes any discretionary planning approval, including subdivision approvals.
We chose our project years in order to minimize impact from the Great Recession years, but many jurisdictions extended pre-Great Recession entitlements during our study years. We did not count entitlements that were extensions of prior approved projects in our database. Post-entitlement developer-initiated modifications present a related issue. Sometimes a developer will receive an entitlement and then seek to modify it months or years later. We do not include the modification in our time frame calculations because it may not be reflective of planning process or law, but instead external factors related to the developer. Some data related to the Great Recession impacts could not be excluded. San Jose frequently uses the PUD Process, which begins with a rezoning later follow by a Planned Development Permit. In some instances, the delay between the rezoning and the permit was many years. This might be related to the Great Recession, but without more data it was impossible to solely attribute the delay to economic circumstances.
For appealed projects, we used the date of the original approval and not the date the project was upheld on appeal. Some jurisdictions have large appeals dockets and appeals are not always heard within a certain statutory timeframe. We wanted to ensure we were measuring the planning process, not how long it takes to schedule and hear an appeal. That being said, we are analyzing timeframes for appeals resolutions that will be forthcoming in future publications.
For jurisdictions that bifurcate more than one project approval-San Jose for example-we use the earliest application date and the latest approval date to bookend the entire process. San Francisco also differs from the other Bay Area jurisdictions in two important respects. The San Francisco Planning Code gives the Planning Commission the power to hear an appeal of a building permit application. 242 This process is known as Discretionary Review, and it was initiated for ten projects during our timeframe. Unlike the appeals process, Discretionary Review is internal to the approvals process in that it remains within the purview of the Planning Commission, as opposed to the Board of Supervisors or the Board of Appeals. The Planning Commission did not resolve Discretionary Review for six of these projects during our timeframe, which means none of them could have filed for a building permit in our project years. Thus, we could not include these projects in our final database. These projects are also small, 38 units on average, and highly unlikely to affect our overall data. Subdivision presents an additional issue. Unlike other jurisdictions that typically approve the Tentative Map (for both horizontal subdivision and condominium/airspace subdivision) concurrently with the underlying land use approvals, in San Francisco, we frequently observed Tentative Map approvals for condominiums that occurred months to years after the approval of the underlying entitlements. Unlike other jurisdictions where the Planning 242. S.F. MUNI. CODE §§ 311(d); 312(e).
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Hastings Environmental Law Journal, Vol. 25, No. 1, Winter 2019 Department usually manages subdivision review, in San Francisco the Department of Public Works primarily manages the Tentative Map approval process.243 While Tentative Maps are an important part of the residential development process, we did not want to inflate planning approval timeframes due to factors outside the Planning Department's control. Thus for San Francisco, we only included subdivision approvals necessary to pull a building permit (for example, lot merger or horizontal subdivision) and not condominium maps that can be approved after obtaining a building permit. While projects that obtained condominium maps figure in our total approval counts, they do not factor into our overall approval timeframes.
San Francisco's response to the dissolution of the Redevelopment Agencies in 2011 also creates a distinct entitlement path that differs from the other selected jurisdictions. 244 San Francisco designated a successor agency-the Office of Community Investment and Infrastructure ("OCII")-after the dissolution of the Redevelopment Agencies in 2011 to fulfill the former Redevelopment Agency's outstanding obligationsit4
5 These obligations include development in
redevelopment areas like Mission Bay, Transbay, and Bayview Hunters Point. 246 This entity is legally distinct from the City of San Francisco. 247 OCII approves the entitlement of new developments within these plan areas pursuant to protocols 243. See S.F. Department of Public Works, Subdivision Regulations § IV(D)(2015) (describing that once Planning issues the CEQA determination, "the Director of Public Works shall approve, conditionally approve, or deny the application within 50 days... "). 244. The Community Redevelopment Act gave local governments the authority to declare areas as blighted and in need of urban renewal, which enabled the city or county to distribute most of the growth in property tax revenue for the project area to the relevant Redevelopment Agencies as tax-increment revenues. See CAL. HEALTH & SAFETY CODE §§ 33020 et seq. In 2011, the California legislature dissolved the Redevelopment Agencies. See A.B. X126, 2011-2012 (Cal. 2011). Dissolution has severely constricted local governments' ability to finance affordable housing. See Casey Blount et al., Redevelopment Agencies in California: History, Benefits, Excesses, and Closure 7 (Working Paper No. EMAD-2014- 01, 2014). https://www.huduser.gov/portal/publications/RedevelopmentWhitePaper.pdf (estimating a statewide average annual loss of 4,500 to 6,500 new affordable units). 245. San Francisco, Cal., Ordinance 11-12 (Jan. 26, 2012) (resolution transferring Redevelopment assets to successor agency); San Francisco, Cal., Ordinance 215-12 (September 25, 2012) (resolution designating Office of Community Investment and Infrastructure as successor agency).
246. See Office of Community Investment and Infrastructure, Affordable Housing Production Report Fiscal Year 2016-2017 2, https://sfocii.org/sites/default/files/2017% 20ANNUAL%20REPORT%20-%20FY%2016%20-17%20FINAL.pdf. Outstanding obligations include the major approved developments in Hunters Point Shipyard/Candlestick Point, Mission Bay North and South and Transbay; disposition of former Redevelopment assets; and ensuring the development of affordable housing in the major approved developments.
247. See San Francisco, Cal., Ordinance 215-12 §3 (September 25, 2012).
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outlined in each plan area document. 8 OCII also utilizes remaining tax increment funds within the plan areas to fund affordable housing development. 249 The OCII approval process differs from projects approved through the Planning Department. The process varies depending on the Redevelopment Area, but generally OCII in partnership with a horizontal developer-which can be a public or private entity-selects the vertical developer for each parcel within the plan area. 250 Once the developer is selected, the developer submits a Basic Concept Plan that is responsive to the highly prescriptive design standards set forth in the area plan.251 After approval of Basic Concept Plan, the developer submits for Schematic Review, which the agency must approve within 45 days of its submission.25 2 In approving the schematic design, OCII makes CEQA determinations based on the master EIR for each Redevelopment Area.253 248. See generally, San Francisco Office of Community Investment and Infrastructure, Mission Bay North Design Review and Document Approval Procedure, https://sfocii.org/sites/default/files/FileCenter/Documents/771-DRDAP%20MBN.pdf; San Francisco Office of Community Investment and Infrastructure, Mission Bay South Design Review and Document Approval Procedure, https://sfocii.org/sites/default/files /FileCenter/Documents/772-DRDAP%20MBS .PDF.
249. See Office of Community Investment and Infrastructure, Affordable Housing Production Report Fiscal Year 2016-2017 2.
250. A horizontal developer builds out all the required infrastructure for a development; the vertical developer constructs the improvements. See e.g., Transbay Redevelopment Project Implementation Agreement 3, https://sfocii.org/sites/default/files /FileCenter/Documents/4039-TB%20mplementation%20Agreement_5.2006Fully%20Exe cuted.pdf ("Under the Cooperative Agreement, City and Authority title to the State-Owned Parcels is subject to a deed restriction requiring that any such parcel may be sold for development only when" certain financial conditions are met); First Amendment to Mission Bay South Owner Participation Agreement (Feb. 17, 2004), https://sfocii.org/sites/default /files/FileCenter/Documents/4089-15%20MBS%200PA%20 Amendments%201%262.pdf (detailing obligations of Redevelopment Agency and Master Developer for Mission Bay South).
251. San Francisco Office of Community Investment and Infrastructure, Mission Bay South Design Review and Document Approval Procedure 7-10; https://sfocii.org/ sites/default/files/FileCenter/Documents/772-DRDAP%2OMBS.PDF. These prescriptive design standards are known as the "Design for Development." 252. See e.g., San Francisco Office of Community Investment and Infrastructure, Mission Bay South Design Review and Document Approval Procedure 7-9, https://sfocii. org/sites/default/files/FileCenter/Documents/772-DRDAP%20MB S.PDF. 253. San Francisco Office of Community Investment and Infrastructure, Mission Bay South Design Review and Document Approval Procedure 3, https://sfocii .org/sites/default/files/FileCenter/Documents/772-DRDAP% 20MB S .PDF.
Agenda Item #5.1.
Hastings Environmental Law Journal, Vol. 25, No. 1, Winter 2019 OCII is approving a substantial number of units,254 including the majority of San Francisco's affordable housing units. 255 Our calculations in this paper do not include this process for several reasons. First, within our selected jurisdictions, no other successor agency is approving residential development entirely outside the jurisdiction's Planning Department. Omitting this pipeline of units enables us to provide a comparison of planning and entitlement processes by type and number of approvals; the OCII process would be a standalone process within our analysis.
Second, this process is slowly being discontinued. By law, successor agencies cannot continue beyond the current redevelopment plan areas; redevelopment dissolution law requires obligations to sunset once the outstanding obligations are fulfilled. 256 Finally, these projects are not tracked within the Planning Department, and OCII has more limited data tracking than the Planning Department, so the type of data required to attempt analysis (in terms of number of total units entitled, number of approvals and timelines) is unavailable. 257 OCII's unique approval process will, however, be discussed in future publications as we continue to gather the required data, as it may be an example of expeditious approvals of affordable housing development that should be contemplated (even as redevelopment is being discontinued).
Phased projects present an additional complexity for measuring project time frames. Most notably Oakland entitles many projects under a single master EIR and Development Agreement that is phased over many years; in some cases phased projects crossed decades. Prior to filing for a building permit for each phase, the developer must obtain final design review from the City. For these projects, we did not measure the entire process from the date of the application for the master EIR and Development Agreement because the project was intentionally designed to be phased. In other words, the delay is not a product of law or planning process but rather market economics. This is consistent with the way we measure 254. See San Francisco Office of Community Investment and Infrastructure, Transbay Neighborhood (Transbay Project Area), https://sfocii.org/sites/default/files/T B%20Project%20Area%20Summary%20Sheet%20010418.pdf (stating that the Transbay redevelopment plan will lead to 4,150 new housing units, 35% of which will be affordable); San Francisco Office of Community Investment and Infrastructure, Bayview Hunters Point Redevelopment Projects and Rezoning FEIR Summary S-3, https://sfocii.org/sites/default/ files/ftp/uploadedfiles/Projects/BVHPFEIRSum.pdf (estimating 3,700 net new units in the Bayview plan area); See San Francisco Office of Community Investment and Infrastructure, Mission Bay, https://sfocii.org/mission-bay (stating Mission Bay redevelopment area will produce 6,404 new housing units, 1,806 of which are affordable). 255. See Office of Community Investment and Infrastructure, Affordable Housing Production Report Fiscal Year 2016-2017 4 (noting that 552 funded affordable housing units and 51 inclusionary units were completed in fiscal year 2016-2017). 256. See Cal. Health & Safety Code § 34179.7 (specifying final conditions for completion of enforceable obligations and Redevelopment dissolution). 257. The data is unavailable primarily because the current data tracking system in San Francisco tracks planning entitlements not approvals from OCII. Although overall production counts are available for these redevelopment plan areas, additional work is needed to identify timelines and to disaggregate approvals on annual basis. We note that San Francisco has worked to make all relevant data points available to facilitate future comparative analysis of housing production..
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time frames for projects entitled under a Specific Plan-the developer's entitlement application kicks off the entitlement process, not the adoption of the Specific Plan.
Finally, some developers will obtain a project approval and later withdraw it, with the intent of filing for a new application. Despite the fact that this approval was later withdrawn, we still count the entitlement in our database because it successfully completed the planning process, regardless of whether it will ever be built.
3. Extracting the project data
To collect this data, we reviewed a jurisdiction's website to see what information could be readily obtained by reviewing public notices for all environmental review documents, lists of approved developments, parcel information maps, among other relevant information. We also searched property addresses within a jurisdiction's database to gather parcel-level information, such as lot size, census tract, and assessor data. To obtain information on property tax assessment and land transaction records, we searched by street address in Lexis/Nexis Public Records. We tracked any obvious holes in the data to confirm with planning department staff, and in some cases, we requested additional data through public records requests.
To analyze how each residential development of five or more units navigated the entitlement process, we gathered approximately twenty-five characteristics per development, relating to current site usage, proposed project characteristics, types of entitlements and environmental review, and approval timeline, including appeals. Where projects received more than one entitlement, we noted all entitlements, which is why the total land use approvals per jurisdiction are far greater than the number of projects. Similarly, many jurisdictions processed projects under more than one CEQA pathway-combining multiple project-based exemptions or a project-based exemption with review that tiered off a prior document. Depending on the accessibility of public data, these characteristics are drawn from project approval documents, zoning geographic information systems ("GIS"), tax assessor records, and city council and planning commission meeting minutes. This data revealed how local governments apply their planning code and other relevant ordinances at a micro level.
We entered this project specific data into an excel spreadsheet, retaining assigned project identifiers, all original descriptors, dates, and all unit counts. We then assigned a numeric code to specific project characteristics, use of local land use processes, and types of environmental review documents/exemptions to enable analysis of timeframes and frequency of certain approval types. To determine timeframes, we counted days from the application file date through the approval of the last discretionary entitlement, and then converted them into months by dividing by 30.5.
To provide a comprehensive assessment of all litigation against the entitled development projects of five or more units, we searched state and county records to identify all writs filed against each of our selected cities in the timeframe Agenda Item #5.1.
Hastings Environmental Law Journal, Vol. 25, No. 1, Winter 2019 of 2014 through 2017. We then pulled the records associated with litigated projects of five or more residential units entitled during our study period.
To spatially analyze this data, we mapped all city boundaries using data available from the city (San Francisco, Oakland) or Stanford's Digital Repository (San Jose, Redwood City, Palo Alto). Mapping of San Francisco plan areas uses GIS data from the San Francisco Planning Department. Area plan polygons for Redwood City, Oakland, and San Jose use georeferencing planning documentation maps to street centerline data for each municipality. BatchGeo provided geocoding for project addresses.
Figure 2: Project Characteristics
Address
Parcel Number
Parcel Size
Census Tract
Current Zoning
Currrent General
Plan Designation
Specific Plan or
Communtiy Plan
Area
Council District
Description of
Current Use
Demolition
Rent Control
Historic Resources
Lot Size
* Residential Units
* Commercial Square
Footage
* Product Type
* Bedroom Mix
* Vehicle and Bicycle
Parking
* Building Height
* Affordability
Percentage, Level,
and Duration of
Restrictions
Type of CEQA
Review [Exempt
(and statutory basis
for exemption),
Mitigated Negative
Declaration, EIR]
Types of
Entitlements [e.g.,
Design Review,
Conditional Use
Permit, Rezone,
General Plan
Amendment,
Planned Unit
Development,
Density Bonus,
Historic
Resources]. Also
track reason for the
entitlement [e.g.,
height increase,
FAR increase, etc.]
* Time from
Entitlement
Application to
Approval; segment
approvals of
entitlements and
CEQA if not
combined
* Appeals (if any),
date of appeal,
appeal outcome
* Building Permit
Status
We then conducted initial analysis of our residential development database to identify possible entitlement patterns and inform the scope of interviews. We identified the land use characteristics that appeared to be associated most frequently with protracted development approval timelines, as well as the development characteristics that appeared to be associated with contentious approvals processes. This analysis yielded potential patterns of either accelerated timelines, protracted timelines, or contentious approval processes for residential development within certain areas.
We supplemented gaps in available online data with requests to planning staff officials. After the publication of our first working paper in February 2018,258 San Francisco Planning Department provided us with more data, which enabled us to add ten developments that were not previously in our database. While 258. Moira O'Neill, Giulia Gualco-Nelson & Eric Biber, Getting it Right: Examining the Local Land Use Entitlement Process in California to Inform Policy and Process (Working Paper Feb. 2018), https://perma.cc/P68H-XY5E.
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researching appeals, we discovered another large discrepancy with Oakland, which led us to add twenty-three new developments to our database that were not available to us when performing our initial search. Still, for reasons described in Part III, Oakland data access is limited. Of the ninety total developments in Oakland, we were only able to obtain final approval documents for forty-nine of these developments. San Jose also dropped two projects since the time of our prior paper due to duplicate projects that had separate entitlements filed under different addresses. While these new projects influenced the entitlement rates in these jurisdictions, they did not significantly alter our findings.
D. Diving deeper into local context: in-depth interviews with key informants
To explore how law is applied in ways that project-level data could not, alone, reveal, we conducted in-depth interviews with key informants from each jurisdiction we chose to study. Building on our professional expertise in the field of land use, we used purposive sampling25 9 to generate a list of potential participants across four stakeholder groups across all five cities: (1) public agency staff (including local planning staff, housing and community development staff, and city attorneys), (2) developers (market-rate and non-profit affordable), (3) community-based organizations and advocates, and (4) consultants (design, legal, and entitlement). 260 We identified seventy potential interview participants through examination of websites, professional reports, and project-level data. We successfully recruited twenty-nine participants for in depth interviews, with at least one participant within each stakeholder group and within each city. Some participants sat for more than one interview and had more than one role, which is why the totals do not add up to twenty-nine.
259. Although not engaging with a survey tool, we wanted to make sure that the participants were in some way representative of both stakeholders that directly interact with entitlement processes and stakeholders engaged with local-level policy reform that directly influences entitlement processes within these five cities. We therefore considered various forms of "sampling" used in survey methods when constructing our research design. See Purposive Sampling, in ENCYCLOPEDIA OF SURVEY RESEARCH METHODS (Paul J. Lavrakas ed., 2008), http://methods.sagepub.com/reference/encyclopedia-of-survey-research-method s/n419.xml.
260. In some cases, a single participant could represent more than one stakeholder group. In some instances, individuals we interviewed worked in, or for, two or more of the cities within our group of five.
Agenda Item #5.1.
Hastings Environmental Law Journal, Vol. 25, No. 1, Winter 2019 Figure 3: Research Interviews by Category
Public Developers Community- Consultants Total
Agency Based
Staff Organizations
/Advocates
San
Francisco 3 4 2 3 12
San Jose
3 2 3 4 12
Oakland
3 3 2 1 9
Redwood 3
City
Palo Alto
3 3 3 4 13
Total
15 15 13 14 57
We conducted semi-structured interviews 261 with open-ended questions to collect perceptions of: the jurisdiction's approvals process, land use taxonomies that contribute most to delays and cost, the role of community in the public approvals process, social-economic-political factors that shape development patterns including important context (such as the local political climate and community tensions at play), and technical details not immediately obvious in the development data. We concluded interviews by sharing preliminary findings from our datasets with participants to gather feedback.
We transcribed our interviews verbatim and used open coding 262 to identify themes that emerged from the interviews. We then analyzed the interviews to identify perceptions about both local and state-level obstacles to advancing equitable infill development and whether proposed (and relevant) statewide legislative action might succeed in reducing time lags caused by local regulatory processes and the potential trade-offs (if any) of reducing those time lags. We then triangulated the data from our planning and development code summaries and development database (including identified patterns within the project-level data) with the themes emerging from interviews to test potential explanations of patterns and themes that we extracted from the interviews.
261. See BERG &LUNE, supra note 229, at 112 14.
262. See BERG & LUNE, supra note 229, at 364 72.
Agenda Item #5.1.
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Part III:Findings
While our research continues, and we will be adding jurisdictions to our data set, we can provide an overview of completed research within our first Bay Area jurisdictions.
A. All residential development of five or more units is discretionary in these cities, and each city imposes
discretionary review at multiple points in the entitlement process
All five jurisdictions we examined require discretionary review for residential developments of five or more units. These discretionary review processes apply even if these developments comply with the underlying zoning code. 263 Four of these cities use aesthetic controls as a primary discretionary review mechanism. Oakland uses Design Review, 264 whereas Redwood City and Palo Alto employ Architectural Review. 265 San Jose chooses to use a Site Development Permit. 266 Among these five cities, San Francisco is unique in that it does not impose design or site development review on all projects. But San Francisco, through its city charter, imposes discretionary review on all proposed projects. 267 Absent its city charter that renders building permits discretionary, San Francisco would have permitted as of right nine projects - each ranging from eight to sixtyseven units. As Figure 4 shows, no other planning code in our case studies would permit this level of development without a discretionary approval. This is an example of how a charter city can impose discretionary review through a mechanism outside of the formalized planning and zoning process. 263. For a discussion of discretionary review, see Part I supra note 34. 264. OAKLAND MUNI. CODE §§ 17.136.040(3) (4), 17.136.025(B)(1)(d). 265. REDWOOD CITY MUNI. CODE § 45.2(A); PALO ALTO MUNI. CODE §
18.76.020(b)(2)(B).
266. SAN JOSE MUNI. CODE § 20.100.010.
267. A city charter is the constitution for that local government. The provision of San Francisco's charter rendering all permits discretionary can be found in S.F. Bus. AND TAx REGULATIONS CODE § 26(a).
Agenda Item #5.1.
Hastings Environmental Law Journal, Vol. 25, No. 1, Winter 2019 Figure 4: Discretionary Review of Developments Consistent with Zoning San Francisco Building Permits None
San Jose Site Development Permit Single-family homes in limited circumstances. 268
Redwood City Architectural Permit One-story single-family homes and duplexes
Palo Alto Design Review Up to two single-family
homes and two duplexes.269
Oakland Design Review Secondary units
It is also notable that within these five cities, the total numbers of land use/planning approvals are greater than the number of overall development projects in each jurisdiction. A single project might need to obtain Design Review approval and a Minor Variance from the Director of the Planning Department and a rezoning from the City Council. 270 Figure 5 illustrates. This requires a project to navigate multiple levels of local government review, which means that there is more than one step in the approval process that would pull the project within the scope of local discretion and trigger environmental review. It should also be noted that if development requires the subdivision of land into smaller parcels, additional discretionary review by local governments generally applies as well, which is accounted for in these numbers. 271 As Figure 5 also shows, the number of discretionary reviews per project does not differ dramatically across our jurisdictions, with Redwood City requiring, on average, the highest number of discretionary approvals. 272
268. To be exempt from site development permits, single-family homes must meet height, FAR, and lot size requirements and cannot be located in riparian areas. SAN JOSE MUNI. CODE § 20.100.1030(A) (C).
269. To qualify for design review exemption, the proposed development cannot be located in a conservation zone. PALO ALTO MUNI. CODE § 18.76.020(b)(2)(D). 270. See S.F. MUNI. CODE § 305 (limiting review of variances to the Zoning Administrator and Board of Appeals). In practice, many jurisdictions do permit concurrent review of entitlement applications. See e.g., SAN JOSE MUNI. CODE § 20.100.140 (permitting concurrent review of multiple entitlement applications); OAKLAND MUNI. CODE § 17. 136.040(D) (permitting the Director to refer design review applications to the Planning Commission when coupled with certain types of variances). 271. For more information on subdivision, see supra notes 38 39. 272. To determine the number of discretionary approvals required per jurisdiction, we calculate total approvals and divide by the number of projects and then add one extra approval for CEQA.
Agenda Item #5.1.
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Figure 5: Types of Discretionary Review per Jurisdiction San San Pailo Redwood
E~ntitlement TN ps jose Francisco Oaklanid Alto Cit
Site Development
Permit/Design
Review 13 0 89 5 9
Planned
Development Permit 50 5 9 0 4
Conditional Use
Permit ("CUP") 0 33 55 0 1
Tentative Map
Permit 36 59 33 4 8
Rezoning 46 4 1 0 0
Historic
Preservation
Permit/Certificate of
Appropriateness 3 2 0 1 4
GP Amendment 5 1 0 0 0
State or Local
Density Bonus 1 3 2 0 1
Specific Plan Permit 0 50 0 0 4
Specific Plan
Exception 0 32 0 0 0
Variance 0 34 39 3 1
Development
Agreement 0 0 0 0 4
Other Approval 4 6 1 0 0
Total 158 229 229 13 36
Average Approvals
per project 2.43 2.41 2.54 2.60 2.77
Average Approvals
with CEQA 3.43 3.41 3.54 3.60 3.77
B. Four of these cities are all employing state-level statutory provisions to facilitate and expedite environmental review for developers
State law allows cities to take a diverse range of approaches to comply with CEQA requirements. 273 EIRs-the most onerous form of CEQA review273. For a discussion of the various environmental review options, see supra Part I.A.2.
Agenda Item #5.1.
Hastings Environmental Law Journal, Vol. 25, No. 1, Winter 2019 occurred infrequently across all jurisdictions. 274 Relatively few projects within these five cities require a full EIR process primarily because jurisdictions are taking advantage of project- or tiering-based exemptions. 275 The figure below demonstrates that exemptions are the most common type of CEQA review for projects in most jurisdictions, with EIRs and MNDs in second and third place, respectively. 276 The most common forms of project-based exemptions included the Class 32 (infill), Class 3 (small structures), and Class 1 (existing facilities) exemptions discussed in Part I supra.
Figure 6: Percentage of Projects by CEQA Review Type
Exempt
(Tiering) 46% 69% 106% 69%
Exempt
(Project
Based) 3% 11% 83% 15% 40%
ND 2% 2% 0% 0% 0%
MND 46% 9% 0% 8% 20%
EIR 22% 8% 3% 8% 40%
Even when adjusting by number of units, relatively few units go through EIRs with the exception of Palo Alto; however, more units are going through EIRs than MNDs. Additionally, more units go through tiering than project-based exemptions, with the exception of Oakland.
274. These are similar findings with LANDIS ET AL., supra note 168, at 99, 105. 275. For a discussion of tiering, see supra Part I.A.2. 276. As discussed below, a single project can undergo more than one type of CEQA review. Figures 6 and 7 do not back out these projects that receive multiple exemptions, which is why the percentages exceed 100 percent of the total number of projects and units.
Oakland in particular will apply multiple tiering and project-based exemptions to a single project.
Agenda Item #5.1.
O'Neill, Gualco-Nelson, Biber, 2019
Figure 7: Percentage of Units by CEQA Review Type
Sill Rzedwood Palo
$au jose Francisco Oakland Cit* Alto
Exempt
(Tiering) 54% 64% 89% 89% 0%
Exempt
(Project
Based) 0% 3% 52% 9% 7%
ND 0% 3% 0% 0% 0%
MND 14% 11% 0% 1% 3%
EIR 49% 24% 9% 1% 90%
Four of these jurisdictions appear to be making good faith efforts to engage in strategies that link housing and jobs to transportation and facilitate environmental review for developers. This means that each of these four cities is tapping into state-level statutory provisions designed to promote sustainable development by doing the bulk of the work to comply with CEQA, rather than imposing additional time and costs on developers. For example, the vast majority of relevant projects entitled within San Francisco and Oakland are also within specific plan areas that rely on these state-level statutory provisions to facilitate environmental review. 277
277. For similar findings in the prior literature, see LANDIS ET AL., supra note 168, at 107 08.
Agenda Item #5.1.
Hastings Environmental Law Journal, Vol. 25, No. 1, Winter 2019 Figure 8: San Francisco Project Locations and Prior Uses 278 U
1N
Prior PVacant Commercial Residential 0 Unknown
=Area Plans
I mile
278. This map does not include residential development that OCII would be responsible for; however, this development is occurring in the eastern part of San Francisco, which does not alter our analysis that permissive density is not spread across the City evenly.
Agenda Item #5.1.
O'Neill, Gualco-Nelson, Biber, 2019
Figure 9: San Jose Project Locations and Prior Uses
Prior Parcel Use: NVa..nt CoimmerciaI Residential tUnknown Figure 10: Oakland Project Locations and Prior Uses
Prior Parcel Use: oVacant ACommercial Residential 2miles Specific Plan Areas Lake Merritt i__]West Oakland Broadway Valdei Downtown Agenda Item #5.1.
Hastings Environmental Law Journal, Vol. 25, No. 1, Winter 2019 Figure 11: Redwood City Project Locations and Prior Uses Prior Parcel Use Vacant (Commercial PResidential t Unknown Dovtown Precise Plan
Figure 12: Palo Alto Project Locations and Prior Uses
Prioi Parcel Use. Vacant Cmmercia ResidentialI mie
Agenda Item #5.1.
O'Neill, Gualco-Nelson, Biber, 2019
C. Use of CEQA exemptions varies across cities
Like the discretionary review mechanisms discussed above, many projects in Oakland are receiving multiple CEQA exemptions, which leaves open the question of why planners take these additional measures. Interview data suggests planners are doubling up on CEQA exemptions to forestall against perceived political challenges to the project. If a project qualifies for more than one CEQA exemption, planners will evaluate the project under each possible exemption. Other jurisdictions, however, rarely make use of exemptions outside of tiering situations. For example, given that most development in these jurisdictions is infill, the fact that so much development receives the Class 32 exemption in Oakland, but not San Francisco or San Jose, is peculiar. Interview data also indicates that within Palo Alto, Redwood City, and San Jose there may be some confusion within planning departments and amongst developers about which types of CEQA documents are the most legally vulnerable on appeal. Perception of legal defensibility may in turn inform decisions on which type of CEQA review to undertake.
Analyzing project size as a function of CEQA, data shows that projects with EIRs in these five cities generally tend to be larger than projects that undergo other types of CEQA review. All jurisdictions with the exception of Redwood City prepared an EIR for their single largest project. Nonetheless, the projects going through the exemption process are not small, averaging over fifty units for four of our five jurisdictions. 279
Yet significant inter-jurisdictional variations still persist. 280 Projects that received a project-based exemption in Oakland are on average, twice the size as projects that received a project-based exemption in San Francisco. In Redwood City, projects that use tiering are larger than projects that use tiering in both San Francisco and Oakland. Figure 7 shows that even with a larger mean size for EIRs, EIRs are a small fraction of the total capacity being entitled in most jurisdictions. 279. Cf. Hernandez, Friedman & DeHerrera, supra note 219, at 31 ("the overwhelming majority of CEQA compliance documents, however, involve the use of restricted regulatory exemptions for extremely minor projects, such as repairing singlefamily homes, acquiring park lands, making minor modifications to existing uses such as modifying signage or repairing piping or other infrastructure, etc."). 280. The variability in environmental review processes is consistent with Gyourko, Saiz & Summers, supra note 113, at 694, who found significant variability in local land use regulation.
Agenda Item #5.1.
Hastings Environmental Law Journal, Vol. 25, No. 1, Winter 2019 Figure 13: Mean Project Size By CEQA Type
$~ J Se Fanict Oafd Redwood Palo
Sanloe Faniso Oklnd Cit Alto
All Types of
Exemption 193 84 93 98 10
Tiering
Exemptions 205 94 96 109 0
Project Based
Exemptions 8 24 67 51 10
ND 10 125 0 0 0
MND 69 117 0 12 8
EIR 403 291 282 8 125
D. There is substantial variation in entitlement timelines across these five cities that does not appear to correspond with stringency in either environmental regulation or local entitlement processes, or project size
Timeframes for entitlements vary significantly across jurisdictions for similar projects and across different project sizes within the same jurisdiction.
Focusing first on environmental review processes, the difference in timeframes does not appear immediately attributable to environmental review legal requirements. Instead, it appears these cities apply the same environmental review provisions to similar projects in different ways-with significant variations in the total timelines for entitlement. For example, both the City of Oakland and the City of San Francisco use the section 15183 Community Plan Exemptions ("CPE") to reduce CEQA compliance obligations for proposed projects within plan areas 281 that have a relatively recent full EIR that the respective city completed. However, Oakland's CPE process moves much faster than San Francisco's. The median CPE entitlement in Oakland is seven months. In San Francisco, a CPE takes over twenty-four months. In contrast, a full EIR in San Jose, for which there is no prior study, takes nearly thirty months, just six months longer than a CPE in San Francisco. 28 2
281. Plan Area terminology varies according to jurisdictions and the size of the plan area. Redwood City refers to these plans as "Precise Plans," San Jose and Oakland both use the terms "Area Plans" and "Specific Plans," and San Francisco calls them "Area Plans." 282. Some jurisdictions apply different types of CEQA review to a single project. A CPE in Oakland is often combined with a section 15332 exemption. EIRs in San Jose are often paired with later addendums or supplemental EIRs. A CPE in San Francisco can be paired with a Focused EIR. The numbers above do not control for these multiple types of CEQA review due to the small sample sizes that would result. Even controlling for multiple types of CEQA review, the general trends hold true. Projects that only received a CPE in Oakland took 7 months; projects in San Francisco that only received a CPE still take 23 Agenda Item #5.1.
O'Neill, Gualco-Nelson, Biber, 2019
Interview data attributes the delay in environmental review within cities to planning practice and the level of attention put into staff reports, rather than the complexities of particular project proposals. Jurisdictions vary in a developer's ability to manage and communicate with their CEQA consultants during the preparation of the environmental documents. Interview participants shared the perception that the inability to directly select or manage consultants can lead to lower quality environmental documents, as well as time delays. 2 3 These results also indicate the potential importance of political context in the approval process.
28 4
Figures 14 and 15 together indicate that the number of approvals required (often used as one important metric for stringency) does not necessarily correspond to entitlement timelines. 2 5 All five cities impose discretionary review on all projects through multiple local regulations, and all require, on average, more than three approvals (including environmental review). But, the variability in timelines for similarly sized projects is great. Redwood City had shorter timeframes for entitlement, particularly compared to San Francisco and San Jose. Interview participants highlighted how variability in entitlement timelines tends to be related to local practice. Examples include staff-level variations in performing application intake, to higher-level decisions on the amount of commercial development that must occur before a developer-applicant can even propose residential development in certain neighborhoods. 28 6 These choices in practice may be a response to political and fiscal pressures that prompt cities to embed discretionary review into the entitlement process.
Project size also does not appear to explain delay in approval timelines.
Large projects do not always take longer to entitle than small projects. In San Jose, months; projects that only received an EIR in San Jose took 14 months (measuring by the median).
283. See e.g., SAN FRANCISCO PLANNING DEP'T, Environmental Review Process Summary 5 (2011), https://perma.cc/8BLP-B4T4 ("While the project sponsor pays all costs for preparation of the necessary consultant-prepared documents, the Department scopes, monitors, reviews, and approves all work completed by consultants"). 284. See John Quigley, Raphael & Rosenthal, supra note 14, at 281 282. 285. These results are consistent with Jackson, supra note 130, at 141, who found that regulatory stringency did not affect supply elasticity, and are in tension with Gyourko, Saiz & Summers, supra note 113, at 695, who found that regulatory stringency did correlate with timeframes. See also, supra Figure 5.
286. San Jose's Urban Villages, for example, are transit-oriented, mixed-use neighborhoods that aim to balance job and housing growth. San Jose, Envision San Jose 2040 General Plan, Chapter 1 at 18 (2018). To achieve this, Urban Villages utilize "Growth Horizons" that stipulate certain commercial and office targets before residential development can be unlocked (with the exception of 100% affordable housing developments). Id. at Chapter 7 at 6, 19. While San Jose has long shouldered much of the region's housing burden without commensurate increases in job growth, these policies can impede residential growth in transit-accessible locations. See Memorandum from Harry Freitas and Kim Walesh to Honorable Mayor and City Council (Apr. 3, 2015), https://perma.cc/LM39-GC3T (noting that San Jose is the only major city in the US with more residents leaving San Jose during the day to go to work than non-residents commuting in for work).
Agenda Item #5.1.
Hastings Environmental Law Journal, Vol. 25, No. 1, Winter 2019 projects between five to twenty-five units take nearly seven months longer to entitle than projects with more than 150 units. In Redwood City the difference is about five months, which is significant given Redwood City's entitlement timeframe is seven months across all projects. Figure 14 shows the mean and median entitlement timeframes across jurisdictions by project size. 28 7 The extreme intra-jurisdictional variation skews mean timeframes higher.
Figure 14: Total Entitlement Time Frames by Project Size inttlement Iim I r eut Siz _(M srd i ill j flI%
ri
S., Zr V
Figure 15 below narrows the approval timeframe to sixty months-in the process removing some outlier projects visible in Figure 14-but provides a better representation of means and medians across all jurisdictions. 287. When referencing timeframes in this Article we refer to the median unless otherwise noted.
Agenda Item #5.1.
O'Neill, Gualco-Nelson, Biber, 2019
Figure 15: Entitlement Timelines Within 60 Months by Project Size "Il
Although we are pursuing additional research to better understand issues with project size, multiple explanations for the different outcomes emerged in interviews. One potential explanation is that smaller projects are occurring in areas that do not benefit from prior environmental review and thus cannot tier off a prior environmental document. Another potential theory is that the type of developer building in the twenty-five-unit range lacks the capital and sophistication to navigate the approval process as efficiently as developers undertaking larger projects. In interviews, small developers expressed feelings of being shut out from the Bay Area development boom because of a lack of access to key planning departmental staff or the inability to afford the right consultants with wellestablished relationships in the planning department.
E. Substantial variation in housing project entitlement across these five cities exists despite regulatory stringency Similarly, housing entitlement-bot as a measure of land area and population-varies dramatically. As a measure of land area, San Francisco entitles the most housing despite it having the longest approval timeframe. 288 San Francisco is also the most geographically constrained jurisdiction in our dataset years; when measuring land area as a function of population, San Francisco has the densest existing development. This is not entirely consistent wit research in Part I that linked more geographically constrained regions with supply constraints. 2 9 288. As discussed in Part 11, entitlement numbers for San Francisco do not include units approved trough OCIJ the successor to the former Redevelopment Agency-in Redevelopment Plan Areas. This data is still unavailable. 289. See Saiz, supra note 129, at 1254.
Agenda Item #5.1.
Hastings Environmental Law Journal, Vol. 25, No. 1, Winter 2019 Redwood City has the second-fastest approval timeline, but entitles less housing per square mile than San Francisco, Oakland, and San Jose. Redwood City is also one of the least geographically constrained cities. Interview data suggests that market barriers, such as the differential cost of construction and sale or rental prices, do not entirely explain this discrepancy. In low-density communities, developers are also factoring in the political feasibility of proposing a denser product, even where that density is permissible under the base zoning. This suggests that in jurisdictions with overall low-density development patterns, a streamlined approval process may be insufficient to entitle substantial housing, if barriers like lack of appropriately zoned land and/or lack of political will are present. 290
Figure 16: Entitlement Production by Land Area and Population Intensity San
Francisco 9,768 870,887 18,581
San Jose 177 11,463 65 1,025,000 5,806
Oakland 56 8,958 161 420,005 7,528
Redwood
City 19 1,100 57 84,950 4,374
Palo Alto 24 277 12 67,024 2,807
Adjusting on a per capita basis, Oakland and Redwood City-the two jurisdictions with the fastest timelines-are on top in terms of output, with Oakland in a distant lead.
290. This appears consistent with Kristoffer Jackson, supra note 130, at 141, who found that regulatory stringency did not affect supply elasticity, and is in tension with Gyourko, Saiz & Summers, supra note 113, at 695.
291. Land areas taken from the 2010 Census. See, QuickFacts, U.S. CENSUS BUREAU, https://perma.cc/L97A-BD8T (last visited Oct. 23, 2018). 292. Population taken from American Communities Survey 2012-2016 estimates.
See American Community Survey Data Profiles, U.S. CENSUS BUREAU, https://www.ce nsus.gov/acs/www/data/data-tables-and-tools/data-profiles/2016/ [https://perma.cc/3T9K8RPQ] (last visited Oct. 23, 2018).
Agenda Item #5.1.
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Figure 17: Units Entitled Per 1,000 People Over 3 Years Units per
1,000) people
Population Entitled Units over 3 vears
San Francisco 870,887 9,768 11
San Jose 1,025,000 11,463 11
Oakland 420,005 8,958 21
Redwood City 84,950 1,100 13
Palo Alto 67,024 277 4
Potential explanations for Oakland's lead may be both local context293 and local government initiatives to accelerate dense infill development. 294 The community's response to concerns of gentrification, increasing housing costs, and displacement have included community based organizations advocating and collaborating with the regional transit agency to support dense TOD with major affordability components. 295 These combined factors involved major phased developments, some beginning in the 1990s, with phases in the 2014, 2015, 2016 data years contributing to the number of units entitled during our study years.
Interview participants also shared perceptions of differing political and community pressure around development outcomes and processes across these cities.
Interview participants described Oakland as generally welcoming development, San Francisco as welcoming of affordable development but not as favorable to major market-rate development projects, and Palo Alto as welcoming of very little dense development. Some participants who work in multiple cities also shared the perception that the political and community responses to development in Oakland will begin to mirror their observations in San Francisco. 293. Oakland experienced decades of population decline and disinvestment distinguishable from the other cities and has historically had a lower median household income and higher rate of poverty. See generally Robert 0. Self, AMERICAN BABYLON: RACE AND THE STRUGGLE FOR POSTWAR OAKLAND (2005); Chris Rhomberg, No THERE THERE: RACE, CLASS, AND POLITCAL COMMUNITY IN OAKLAND (2007). We draw comparisons of rate of poverty and median household incomes from 2010 census data and American Community Survey estimates. See QuickFacts, U.S. CENSUS BUREAU, supra note 291. 294. The City of Oakland began its 10K program in the 1990s under former Mayor Jerry Brown, who Professor Rhomberg described as having "offered Oakland as a haven to private developers fleeing overbuilt conditions in San Francisco and promised to expedite approval for market-rate apartments and condominiums built without city subsidies or requirements for affordable housing." Rhomberg, supra note 293, at 189. The 10K initiative generated controversy and exacerbated existing concerns about increasing housing costs, gentrification, and the displacement of people of color. Rhomberg, supra note 293, at 183 94. 295. For example, the Unity Council in the Fruitvale neighborhood took the lead on several major TOD development projects around the Fruitvale BART station with affordability and community use components work that began as early as 1992.
Rhomberg, supra note 293, at 190-92.
Agenda Item #5.1.
Hastings Environmental Law Journal, Vol. 25, No. 1, Winter 2019 F. Most of the projects entitled within these three years involve the development of housing where there was none Whether proposed development risks displacement through the conversion or elimination of affordable housing-including rent controlled, deed restricted, or naturally affordable housing-presents an important equity consideration. This also implicates important climate concerns if residential demolition is reducing overall density. During these project years, the majority of residential developments of five or more units or more entitled within all cities are on vacant or commercial land, 296 rather than land with a prior residential use. These results are summarized below and displayed in Figures 8-12 above.
Figure 18: Prior Parcel Uses
Kesulentat i Z ) 11 1 4
Residential % 35% 2% 12% 20% 31%
Commercial 24 87 45 3 5
Commercial % 37% 92% 50% 60% 38%
Vacant 15 5 34 1 1
Vacant % 23% 5% 38% 20% 8%
Redwood City and San Jose have higher occurrences of entitlement where the prior use was residential. Of the four projects that replaced residential uses in Redwood City, at least two were multifamily structures. In San Jose, the vast majority of these residential uses are single-family homes-and the new developments were substantially denser than the single-family homes that were demolished. In San Jose, four of the twenty-three projects that replaced residential uses were multi-family structures that could potentially have been subject to rent control. One of these multi-family buildings was a 216-unit rent-controlled building whose demolition left many long-time residents with few other affordable rental options. 297 These rent-controlled units were not replaced in the new development, nor did the new development contain inclusionary housing units. 298 From our limited data, it seems this scale of rent-controlled demolition is rare in these cities; however, more research is needed to investigate other potential rent296. Vacant land includes lots with no improvements or lots that contain a surface parking lot with no permanent structures. Commercial land includes lots with commercial or industrial uses, such as warehouses, restaurants, storage facilities, or retail. Residential lots include single-family homes, mobile homes, multifamily buildings, single room occupancy hotels, and residential motels.
297. Ramona Giwargis, San Jose council denies appeal to stop Reserve apartment demolition, THE MERCURY NEWS (June 22, 2016), https://perma.cc/EN52-FXDE. 298. Ramona Giwargis, San Jose: Tempers .flare over The Reserve displacement, THE MERCURY NEWS (Mar. 16, 2016), https://perma.cc/5HCX-28AL.
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controlled demolitions in our jurisdictions. Lastly, we found no deed-restricted affordable housing that was demolished during our project-years.
G. Deed-restricted affordable housing entitlement is low across all jurisdictions; however, deed-restricted
affordable housing benefits from faster approval time
frames
Entitlement rates (in terms of units) to support affordable housing production across all jurisdictions are low for these years. San Francisco-the only jurisdiction to apply inclusionary housing requirements to both rental and for sale housing during the project years 299-has the highest rates of entitlement of affordable housing by units, with 11% of all new units deed-restricted to low and middle income households. 100% of deed-restricted affordable housing in San Francisco is entitled in just over twelve months, which is thirteen months faster than market rate development. In San Jose, an affordable development is entitled nearly ten months faster than market rate development. In Oakland-where the process is compressed relative to San Francisco and San Jose-affordable development is approved about two months faster than market rate development.
Unlike other Bay Area jurisdictions, most of the affordable housing units entitled in San Francisco outside of former Redevelopment Areas came through inclusionary obligations imposed on market-rate developers.300 While we do not have complete data on inclusionary housing compliance for all our developments in San Francisco, at least twenty-eight developments-30% of projects-elected to pay the in-lieu fee rather than build the housing on-site. As our interviews highlight, the in-lieu fees are important sources of gap finance for nonprofit affordable housing developers especially after the dissolution of the Redevelopment Agency.30' Interestingly, the jurisdictions with the fastest 299. San Jose's inclusionary housing ordinance was on hold during the first two years of our research due to ongoing litigation. See Cal. Bldg. Indus. Ass'n v. City of San Jose, 61 Cal. 4th 435, 443 (2015) (noting that the California Superior Court enjoined implementation of the ordinance). Though the California Supreme Court upheld the inclusionary housing ordinance against a takings challenge, the ordinance only applied to for-sale developments during our project years. See id. at 442, 461. The ordinance currently applies to both for-sale and rental developments. See SAN JOSE MUNI. CODE § 5.08.400. 300. The opposite is likely true in former Redevelopment Areas managed by OCII.
See Office of Community Investment and Infrastructure, Affordable Housing Production Report Fiscal Year 2016-2017 (noting that 552 funded affordable housing units and 51 inclusionary units were completed in fiscal year 2016-2017). Funded projects refer to 100% affordable housing developments as opposed to inclusionary housing units, where the affordable housing units are a smaller percentage of the total units. This also underscores the importance of redevelopment for affordable housing production. 301. The Community Redevelopment Act gave local governments the authority to declare areas as blighted and in need of urban renewal, which enabled the city or county to distribute most of the growth in property tax revenue for the project area to the relevant Redevelopment Agencies as tax-increment revenues. See CAL. HEALTH & SAFETY CODE §§ 33020 et seq. In 2011, the California legislature dissolved the Redevelopment Agencies. See Agenda Item #5.1.
Hastings Environmental Law Journal, Vol. 25, No. 1, Winter 2019 entitlement time frames-Oakland and Redwood City-also have the lowest rate of entitlement of affordable units, which may suggest affordable housing developers need more than an efficient process to make deals feasible. Interview data also suggests that high land and labor costs, coupled with the loss of funding from Redevelopment Agency tax increment programs 302 are primary barriers to developing more affordable units within these cities. The interviews yielded differing accounts as to whether discretionary approval imposed significant challenges to affordable development. Notably, interview data indicated that an increasingly elaborate building permit process also poses barriers to the timely completion of affordable developments. While the scope of this study does not address the length and complexity of the actual building permit process, this is an important area for future study.
Figure 19: Affordable Units by Jurisdiction
# Units 11,463 9,755 9,555 277 1,100
# Affordable
Units 613 1,110 333 70 11
Affordable
% 5% 11% 4% 25% 1%
Given the three-year timeframe of our study, and because 100% affordable housing developments are so infrequently entitled, the rate of entitlement (in terms of percentage number of units entitled) is by itself insufficient to determine a jurisdiction's policy on affordable housing. Palo Alto is emblematic.
While Palo Alto had the lowest rate of entitled units across all our Bay Area cities, it had the highest rate of affordable housing entitlements (25%), because a large affordable development happened to be entitled during our project years. Instead, looking at the planning and development codes for the presence of local ordinances that directly incentivize affordable development, the overall rate of entitlement in terms of units entitled, and entitlement timeframes provides a more accurate assessment of a city's affordable housing policy.
A.B. X126, 2011-2012 (Cal. 2011), https://perma.cc/5FSN-AMNH. Dissolution has severely constricted local governments' ability to finance affordable housing. See Casey Blount et al., Redevelopment Agencies in California: History, Benefits, Excesses, and Closure (2014), https://perma.cc/3QUD-FPTY (estimating a statewide average annual loss of 4,500 to 6,500 new affordable units).
302. These tax-increment revenues were a large source of affordable housing finance. See Blount, supra note 301.
Agenda Item #5.1.
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H. San Francisco, Redwood City, Oakland, and San Jose all provide for density and development incentives to
promote transit-oriented development that have caused
developers to site most development in these growth
incentive zones
Most jurisdictions in our study are easing density and parking restrictions in targeted growth areas near transit and are drawing on Specific Plans to facilitate development in targeted growth areas. Downtown San Jose-with its proximity to Caltrain and light rail-is one example. San Jose's General Plan lifted height limitations in most downtown areas, giving developers more flexibility in design and construction type.3 03 The General Plan also allows for up to 800 dwelling units per acre and a 30.0 FAR for mixed-use projects in the downtown area. 3 4 These are high densities relative to San Jose's Mixed-Use Commercial Districts where residential developments max out at six stories and fifty dwelling units per acre.30 5 Parking reductions of up to fifty percent are also available for certain mixed-use projects in downtown.30 6 Additionally, San Jose's Diridon Station Area Plan rezoned land including portions of downtown and areas adjacent to the Diridon Caltrain station, to allow for residential use at higher densities than previously allowed, with the goal of connecting transit-accessible housing to jobs.30 7 While Redwood City's historic pattern of land use development is largely auto-centric, the City's current General Plan focuses growth and development in mixed-use activity centers and along pedestrian-friendly transportation corridors that are connected to the regional transit system. The General Plan allows for more intense development (40 to 60 dwelling units per acre) along major thoroughfares, particularly Veterans Boulevard, Broadway, and El Camino Real.308 Redwood City's Downtown Precise Plan ("DTPP") also seeks to create a "pedestrian friendly, walkable district [with] good transit access. '30 9 Instead of focusing solely on increased development incentives, like reduced parking or open space requirements or more permissive density, Redwood City accomplishes its vision by improving processes that facilitate faster review and approvals for development 303. SAN JOSE MUNI. CODE § 20.70.200. Because of the downtown area's proximity to the airport, no building can be permitted with a height that exceeds the elevation restrictions prescribed under Federal Aviation Regulations Part 77 (14 C.F.R.
Part 77) unless certain conditions are met.
304. See City of San Jose, supra note 286, at Chapter 5 at 9. 305. Id. at Chapter 5 at 6.
306. SAN JOSE MUNI. CODE § 20.70.330.
307. See CITY OF SAN JOSE, DIRIDON STATION AREA PLAN, Appendix B (last visited Oct. 26, 2018) https://perma.cc/D9E5-53ZE.
308. See CITY OF REDWOOD CITY, GENERAL PLAN, Urban Form and Land Use at BE39 (2010), https://www.redwoodcity.org/departments/community-development-department /planning-housing/planning-services/general-plan-precise-plans/general-planl. 309. See REDWOOD CITY, DOWNTOWN PRECISE PLAN, Introduction at 3, (2011), https ://www.redwoodcity.org/departments/community-development-department/planninghousing/planning-services/general-plan-precise-plans/downtown-precise-plan.
Agenda Item #5.1.
Hastings Environmental Law Journal, Vol. 25, No. 1, Winter 2019 projects within the DTPP. Conformance with the DTPP's prescriptive design and development standards is mandatory; however, participants share the perception that conformance with the guidelines ensures swifter approvals, which is also shown in our project data.310
Like Redwood City, San Francisco has used specific planning to concentrate growth in key transit-accessible neighborhoods. The City has lifted traditional density limitations by shifting to a form-based code in these areas so that building envelope and bedroom mix are the primary limitation on density. 311 San Francisco has also attempted to facilitate development in infill, transitaccessible neighborhoods outside the boundaries of these specific plan areas through the use of local density bonus programs like HomeSF that can provide up to an additional two stories of height outside of the specific plan neighborhoods. 312 Since most development is indeed occurring within these growth areas, we can infer that these efforts have been successful overall-consistent with prior research that found that Specific Plans can facilitate approval processes. 313 Much can also be inferred based on where projects are not sited in these jurisdictions, as shown by the maps in supra Part III 4. Indeed, cities are not relaxing density and development standards uniformly within their boundaries. Interviews suggest that the political will to allowing dense development only extends to certain geographic areas. Interview participants from Redwood City, San Francisco, and San Jose have characterized this as the "grand bargain," in which constituents consent to increased density in growth in key areas in return for "leav[ing] the low-density residential neighborhoods alone."
In addition to the obvious equity implications of refusing to site dense development in lower-density areas, 314 the lack of political will also has ramifications in cities like San Francisco, that may undermine efforts to address climate change. San Francisco's western side sees virtually no development, yet is linked to the city's downtown via high quality light rail and bus lines.315 Interviews have also raised examples of transitional single-family home neighborhoods where a denser residential product could be possible on paper, but not politically. The lack of development in these areas supports the presence of political-not necessarily planning or zoning-barriers.
I. Very few of these entitled projects were challenged in court
A close examination of the projects entitled during our study period in these five cities suggests litigation rates are quite low. At a basic level, our data 310. Id.at 25.
311. See e.g., COUNTY OF SAN FRANCISCO, EASTERN NEIGHBORHOODS PLAN: EAST
SOMA AREA PLAN,
312. S.F. MUNI. CODE § 206.3.
313. See LANDIS ET AL., supra note 168, at 95-96.
314. See Mangin, supra note 198, at 92.
315. See e.g., J.K. Dineen, In a wealthy SF neighborhood, residents fight low-income housing, S.F. CHRONICLE (Nov. 16, 2016), https://perma.cc/YN4X-3YNR.
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reveals that lawsuits challenging residential and mixed-use projects over five units is more common than the generic CEQA litigation rates reported in prior studies (all estimated at below 1%).316 Nonetheless, the overall litigation rates are low regardless of whether they were measured with respect to number of projects or number of units. This directly conflicts with the perceptions of our interview participants, many of whom perceived CEQA litigation rates to be much higher within each city.
Figure 20: Litigation Rates by Project and Unit Counts
All
Jurisdictions 31.566 1.994
San
Francisco 95 9,768 3 3% 1,273 13%
San Jose 65 11,463 2 3% 583 5%
Oakland 90 8,958 1 1% 47 0%
Redwood
City 13 1,100 1 -- 91 8%
Palo Alto 5 277 0 -- 0 0%
The total number of projects litigated across all five cities is low. We have omitted the litigation rates by projects in Redwood City and Palo Alto because of the limited number of projects within each city (Palo Alto had no litigated projects; it had only a handful of projects.). For example, in Redwood City, one out of thirteen projects lead to a litigation rate of 8%. Comparing San Francisco (95 entitled projects), Oakland (90 entitled projects), and San Jose (65 entitled projects) gives us more information on the potential impact of CEQA litigation.
Notably, the variation in the number of lawsuits within these jurisdiction does not appear to coincide with overall housing entitlement approval timelines, at least not in these project years. San Jose's environmental review process appears faster than San Francisco's, which is one of the slowest among our jurisdictions.
Moreover, not a single CPE was litigated in San Francisco nor in Oakland, therefore the litigation rates likely cannot explain the stark differences in CPE timeframes in these two jurisdictions.
It also appears that only two of the nine litigated projects had affordable housing units within them (one with 11% and the other 33%). Both were located in San Francisco. Notably, none of the 100% affordable housing developments entitled during the study period within these five cities were litigated; however, 316. See CAL. OFFICE OF SENATE RESEARCH, POLICY MATTERS (2018), https://perma.cc/34HL-K8SX; Smith-Heimer et al., supra note 194; CAL. ST. SENATE ENVTL. QUALITY COMM., CEQA SURVEY (2017), https://perma.cc/9HXP-RFYR.
Agenda Item #5.1.
Hastings Environmental Law Journal, Vol. 25, No. 1, Winter 2019 affordable housing developments have been litigated outside our time frames and remain the subject of substantial press coverage.
3 17
Excluding settlement, CEQA defendants have frequently won more cases than plaintiffs.3 18 Settlement could be treated as a partial victory for plaintiffs, in which case success rates are about twice as high than for defendants. Of the ongoing cases, the plaintiff lost in the trial court in all three cases and then appealed. The success rates do not appear to vary substantially by type of claim.
Of the six lawsuits including CEQA claims, three settled and defendants won once.
Of the five lawsuits including non-CEQA claims, three settled and defendants won one.
CEQA and non-CEQA claims were approximately equally likely to be raised by plaintiffs in the lawsuits. Of the seven lawsuits, six raised CEQA claims, but four of those six also raised planning and zoning claims. One lawsuit also raised planning and zoning related claims but did not raise CEQA claims. This means that six projects raised CEQA claims, five projects raised non-CEQA claims, two lawsuits raised CEQA claims only, and one lawsuit raised non-CEQA claims.
There are two potential explanations for this. Once a plaintiff decides to sue a project based on planning and zoning violations, the marginal cost of adding an additional CEQA claim is likely not prohibitive. But the reverse is also true-the marginal cost of adding a planning and zoning claim to a CEQA suit is likely not great either. Regardless, non-CEQA claims (for example, that project approvals violated state or local zoning or planning codes) appear to be just as common as CEQA claims. This suggests that CEQA is not the only driver of litigation in this context. It also suggests that eliminating CEQA might not eliminate legal challenges to most of the projects that were litigated during this study period in these cities. 319
317. The lawsuit against Habitat for Humanity in Redwood City is illustrative. Two attorneys filed suit against an approved affordable housing development, alleging that the height of the building would block sunlight in their office windows. The project was only half of the allowable height in the Downtown Precise Plan area. The lawsuit eventually settled. See Press Release, Holland & Knight, Holland & Knight Achieves Favorable Settlement for Habitat for Humanity in Legal Battle over Proposed Affordable Housing Development (July 26, 2018), https://perma.cc/ZST9-UG3B; See also Zachary Carr, Settlement reached over height of downtown affordable housing, THE DAIY J. (Jul. 21, 2018) https://perma.cc/UUD8-W9X3.
318. We note that given the small sample size of our litigation data set (seven lawsuits), any conclusions we draw about the nature and resolution of litigation will be limited. We expect to draw firmer conclusions after collecting additional litigation data from the Los Angeles area.
319. One caveat to this conclusion is that different levels of judicial scrutiny to different kinds of claims may mean that non-CEQA land use lawsuits may be less (or more) likely to succeed in court than CEQA lawsuits. If this is the case, then eliminating one kind of lawsuit may have some impact on litigation outcomes and impacts on development.
Again, our limited data set from the Bay Area does not allow us to draw firm conclusions on this point, but we will gather more data on this from the Los Angeles area.
Agenda Item #5.1.
O'Neill, Gualco-Nelson, Biber, 2019
Figure 21: Types of Legal Claims
Lawsuits with CEQA claims 6
Lawsuits with non-CEQA claims* 4
Projects that raised only CEQA claims 2
Projects that raised only non-CEQA claims* 1
*non-CEQA claims include procedural violations or violations of planning and zoning law.
J. Administrative appeal rates are much higher than CEQA litigation rates within these five cities
We recognize that litigation rates do not tell the entire story of the threat of litigation and how it impacts the residential development process. CEQA critics have discussed how the threat of litigation may deter developers from even filing entitlement applications; this threat can also lead developers to capitulate to a plaintiff's demands even before a lawsuit is filed. While it is difficult to empirically measure the threat of CEQA litigation given existing datasets, project administrative appeals provide a useful proxy in several ways. First, under state law a project appeal is a prerequisite to filing a CEQA lawsuit, since a plaintiff must first exhaust administrative remedies. 20 Second, a project appeal can provide a potential plaintiff with a hook to leverage settlement before filing suit.
We found that appeals rates in Oakland, San Francisco, and San Jose are significantly higher than the litigation rates across all three of these jurisdictions for these study years. Notably, the appeals rates also more closely approximate our interview participants' estimations of the frequency of CEQA litigation-however, in some cases, interview estimations were still significantly higher. When adjusting for appeals as a percentage of total units entitled, the appeals rate increases in every jurisdiction, showing that larger-than-average projects are being challenged. One potential explanation for the higher rate of appeals is that projects expend significant resources in making projects "bulletproof' in anticipation of future litigation. The lower litigation rates might reflect the fruit of those labors, with the higher appeals rates proxying for the threat of that litigation.
The success rates for administrative appeals are more difficult to determine than litigation, due to the limitations in how certain jurisdictions track appeals in the meeting minutes for their appellate bodies. From the high appeals rates relative to litigation rates, it can be inferred that developers are settling with potential plaintiffs before a lawsuit is filed. An alternative explanation is that if appeals usually fail, that failure may discourage some plaintiffs from filing lawsuits. Further data on how these appeals are resolved will help distinguish between these possibilities. We will be collecting that data in our future research, as well as data on the types of claims raised in appeals. 320. CAL. PUB. REs. CODE § 21177 (2016).
Agenda Item #5.1.
Hastings Environmental Law Journal, Vol. 25, No. 1, Winter 2019 Figure 22: Appealed Projects Per Jurisdiction
Provjeet San San Palo Redwood
Chaaceristics jose Francisco Oaklan 4 Alto"" CitN
# Projects 65 93 93 5 13
# Appealed Projects 6 15 13 -- 2
% of total projects 9% 16% 14% -- 15%
# Units 11,463 9,768 8,958 277 1,100
# Appealed Units 1,631 2,996 1,941 -- 493
% of total units 14% 31% 22% -- 45%
Part IV: Discussion
Our findings reveal that all the jurisdictions studied provided for dense infill development but retained discretionary control over new residential developments of five or more units, primarily through aesthetic control. All five cities required a similar number of approvals. Despite these similarities, the local processes yielded widely different results in rates of entitlements, length of approval periods, and implications for equity. These findings are both consistent and in conflict with past research and leave open important questions for future exploration. They also directly inform current political and policy debates.3 22 A. In these cities, time lags in entitlement (and associated costs) are most likely driven by local factors and not
CEQA or its requirements
CEQA reform continues to hold the attention of politicians and policymakers.3 23 Data collected from these five cities (some of the most expensive cities in the state) suggests that reforming CEQA does little to address time lags in entitlement (and associated costs) within these cities, primarily because the time lag variations across cities does not appear to be driven by CEQA or its 321. We were not able to obtain Palo Alto appeals data at the time of publication. 322. In these conclusions, we emphasize that we will continue to collect data from cities around the state. We limit our conclusions to these five cities and will present comparative analysis across the Bay Area and Los Angeles in future work. 323. Most recently in the 2018 Gubernatorial debate, the Republican candidate (with experience developing housing in the Midwest) attributed the high costs of housing to the law "for slowing project approvals and adding to costs of development" but focused his attention on "overhauling" CEQA as a potential solution to California's persistent housing crisis, noting that the power that cities and counties currently have over land development "is appropriate." See Liam Dillon, Newsom, Cox split on how California governments should respond to the housing affordability crisis, L.A. TIMES, (Oct. 8, 2018), http://www.latimes.com/politics/essential/la-pol-ca-essential-politics-may-2018-newsomcox-split-on-how-california- 1539020247-htmlstory.html.
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requirements. First, data indicates these cities often employ tools to facilitate CEQA compliance, and that neither entitlement timelines nor production appears to coincide with the type of land-use approval processes or environmental review employed. For example, an exempt project in San Francisco takes twice as long as in Oakland, and nearly as long as a full EIR in San Jose. Thus, local practices and context (such as staffing levels, political dynamics and leadership, or planning department practices that respond to political dynamics and directives), appear to more strongly influence environmental review and entitlement timelines, rather than CEQA requirements.3 24
Based on our initial findings, a better focus for the state to improve housing production and reduce delay in approval processes would be changing the local regulatory systems that cities develop for land-use approvals. This might include altering the processes or discretion of local governments to structure and administer local land-use review processes, changing the political and fiscal incentives around housing approval by local governments, and providing stronger and more enforceable legal obligations against cities to use their land use approval processes to facilitate housing entitlements.3 25
Second, it is unclear whether CEQA reform would address the impact of litigation on the housing entitlement process. Some of our interview participants discussed the necessity of "bullet-proof EIRs" 326 to forestall CEQA litigation from neighborhood groups. Nonetheless, we have not observed many of these projectlevel EIRs in the five cities, which suggests that variations in entitlement process timelines between these five cities may not be easily attributable to neighborhood groups abusing state regulation in response to proposed project characteristics.
While op-eds, research, and reform proposals often focus on EIRs and CEQA litigation, 327 the data from these five cities indicates that some of the largest projects, those most likely to have significant environmental impacts, do not 324. See Christopher S. Elmendorf, Beyond the Double-Veto: Land Use Plans as Preemptive Intergovernmental Contracts 9 (Draft Oct. 10, 2018) ("the actual intensity of regulation is a function not just of the rules that exist on paper but of the interest groups that have organized to enforce them, and the attitudes and priorities of the local officials who implement them.").
325. In this last category, we particularly have in mind continuing efforts to strengthen the obligations of local governments under state law to provide Housing Elements in their general plans that facilitate issuance of housing entitlements. Here the state legislature could build on its efforts in the housing package it enacted in 2017. See, e.g., CAL. GOV'T CODE §§ 65400, 65883.2, 65884.09; see also Elmendorf, supra note 324, at 41-8. 326. This refers to our interpretation of statements from interview participants, describing the need for an EIR document that has sufficient analysis of environmental impacts and technical information to withstand judicial review should the project be challenged in court in terms similar to the term "bullet-proof' used by Barbour & Michael Teitz, supra note 63, at 15.
327. Hernandez, Friedman & DeHerrera, supra note 219, at 8; Jennifer Hernandez, California Environmental Quality Act Lawsuits and California's Housing Crisis, 24 HASTINGS ENVTL. L. J. 21, 23 (2018), https://perma.cc/J7GV-TB48; see also supra note 11.
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Hastings Environmental Law Journal, Vol. 25, No. 1, Winter 2019 require EIRs (although EIR projects are on average larger than non-EIR projects), and that CEQA litigation is infrequent.3 28
Finally, comparing our findings to the HCD Landis Report reinforces our conclusion that targeting CEQA may not achieve intended policy goals-at least not in these cities-and shows the importance of the increase in discretionary review as a potential driver of timeframes. Landis found a lower overall instance of EIRs in California-about 4% of multi-family developments or 9% of singlefamily home developments. Our EIR rate is comparatively higher, with around 10% of all projects across all jurisdictions. Our average approval times are also notably longer at 25 months across all cities (with a range of 10 to 34), versus the 11 months for a single-family and 6.7 months for multi-family developments in the Landis study. However, the use of project-based tiering is dissimilar from the rate of 26% in the Landis study; we found a rate of 55% in our project years. Notably, the number of approvals per project is also distinguishable. The Landis study found
2.8 approvals per project on average while our research shows 3.6 on average. Our data suggests that despite more frequent streamlined CEQA review, overall approval time frames within certain cities are increasing as numbers of approvals per project increase. This further illustrates the inability of state CEQA reform to address the issue of time lags in entitlement processes. The local land use regulatory process in general-and the imposition of discretionary review by local governments in particular-is therefore a key issue for policymakers and researchers to consider.
B. Variability and uncertainty in the entitlement process across these jurisdictions may be a more critical factor influencing entitlement timelines than stringency
Our findings generally conform to national surveys like Pendall and WRLURI. These five cities are highly regulated coastal communities that have permissive density, high (and similar) numbers of approvals, and affordable housing incentives. Our findings are also somewhat consistent with the BLURI, in that the BLURI found that the timeframe to complete "permit-review" was about 2 years for multi-family housing and 2.5 years for single-family housing.3 29 We found a 25-month review period on average in our jurisdictions across all project types, which is roughly consistent with BLURI's findings, provided their 328. However, we again note the limitations of our current data which can only assess to a limited extent how important the threat of litigation is to whether projects are proposed and how projects are modified in the approval process. We hope to further investigate those questions once we gather additional data on litigation and administrative appeal data from across the state. In particular, one question is whether projects go through EIRs not because of higher environmental risk, but because of higher political risk. Projects that face significant community opposition require EIRs because of the nature of the entitlement process that political opposition creates. Those projects in turn are therefore more likely to be litigated. Again, with additional data from more projects, we hope to explore this question.
329. Quigley, Raphael & Rosenthal, supra note 14, at 289.
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timeframes do not include the issuance of building permits, 330 but again, we found that the range is great (10 to 34 months). We also found, similar to the Pendall study, that aesthetic controls can be an important factor in the number of units entitled.
However, these are general consistencies that say little about how local regulation, discretionary review, or local process operates. BLURI found that larger cities have more required approvals, which is not entirely supported by our data, as smaller cities like Palo Alto, Redwood City, and Oakland required more approvals than San Francisco and San Jose, which are larger in size.331 Also, although four of the five cities use aesthetic controls (considered subjective) 332 as the primary mechanism for discretionary review, while also providing for density within the base zoning, and all cities required approximately the same number of approvals, Oakland and Redwood City had comparatively shorter entitlement timelines.33 3 This tells us that stringency, if defined by the type and number of discretionary approvals, appears to operate in Redwood City and Oakland in very different ways than in neighboring cities. This also cautions against generalizing state-level policy reform proposals from how land use processes operate within a single city, or even a single region.334
In addition, the variation in entitlement processes across these jurisdictions may factor into constraining supply or increasing costs. This variation appears to present informational barriers for newcomers to the market-even for some working within the same region. Variation may impede a developer from navigating the development process within each of these cities without substantial local knowledge. This complexity and variation could also impact the capacity of planning staff to help developers understand the entitlement process. Our interview data confirms that well-capitalized developers with existing relationships and experience in specific jurisdictions are the best situated to navigate these complex local contexts, giving them a competitive advantage. Also, project-level data indicates that larger projects do not necessarily take more time, but often take less time, than smaller projects. If the complexity and requirements of environmental review were the issue, this is not intuitive. This suggests that larger market-rate projects-to the extent that they benefit from expertise and better capitalizationcan navigate the processes in these cities in less time than smaller-scale developments. This raises concerns about monopolization, as the cost of acquiring local knowledge forces new market participants out, which could also contribute 330. The BLURI is unclear about whether it is measuring the entire development process from entitlement application to building permit issuance or just the process to obtain a land use entitlement. Depending on how the survey was itself phrased, the vague terminology might have also influenced participants' responses. If the BLURI is including building permit issuance, our timeframes would be much longer. 331. Id. at 282. Note that BLURI might have been measuring approvals to obtain a building permit, which might also skew this response.
332. See Blaesser, supra note 36, at xix.
333. Oakland and Redwood City also had median timelines on certain size projects that were also closer to the 6 months average.
334. This last point emphasizes the importance of collecting additional data from Los Angeles and other areas in California, which we are in the process of collecting.
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Hastings Environmental Law Journal, Vol. 25, No. 1, Winter 2019 to increased housing costs. The difficulty in accessing this data for our research purposes also supports this proposition.
A second related issue is the lack of predictability in the process within specific cities. Interviews suggest that unpredictability, as opposed to stringency, in process imposes costs that may keep developers from advancing a project. As discussed in Part III, Redwood City successfully mitigated this unpredictability issue by its Downtown Precise Plan, which imposes more prescriptive development requirements to help with certainty and reduced timeframes.
Although prescriptive design requirements have drawbacks,3 35 if a jurisdiction is going to impose aesthetic review, explicit design standards can reduce the inherent subjectivity of aesthetic review.33 6 As project-level data across all five cities demonstrates, Redwood City moves comparatively quicker, although all five cities have stringent local ordinances. This suggests that Redwood City's approach, which maintains local discretion and a high number of approvals (compared to national averages), could potentially reduce approval timeframes and increase production yields.33 7
Redwood City therefore provides a compelling case study of how to incorporate improvements in discretionary processes in the planning of a new, dense transit-oriented neighborhood, and how to maintain discretionary review and stringency while also expediting entitlement processes. San Francisco, on the other hand, illustrates how the benefits of specific planning tools that promote infill development might be significantly outweighed by the costs of a protracted approval process. This approval process appears related to either San Francisco's unique charter provision (that renders even building permits discretionary actions) or a political culture that influences (and slows) planning practices. 335. Interview participants have noted that highly prescriptive design standards generally give architects less ability to maneuver around building form. They can also have cost impacts if the regulations prescribe more expensive materials, more open space, or a more expensive construction type.
336. See e.g., Lemar, supra note 218, at 1563 (noting that "whether a building is visually appealing is a subjective inquiry. Whether a building is consistent with the existing architectural context is a supposedly objective one) (emphasis added); Brian Soucek, Aesthetic Judgment in Law, 69 ALA. L. R. 382, 417 (2017) (noting that aesthetic judgment in land use regulation extends beyond the question of "what types of buildings or uses of land are the prettiest" to judgments about an area's identity and social cohesion). 337. Litigation is another potential source of uncertainty for entitlement processes that can increase costs. However, at least in our current data, litigation occurs at relatively low rates, while all projects go through ambiguous and uncertain design review. Thus, at least initially it appears to us that providing certainty in the design review process is more important for improving the entitlement process than reducing litigation (again with the caveat identified in note 311, supra, about the threat of litigation). This is the approach taken by the state legislature when it enacted SB 35, which eliminates much discretionary review for certain qualifying affordable housing developments in cities that have not met their housing goals. See CAL. Gov'T CODE § 65400 (West 2018).
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C. Uneven land use regulation across a city may operate as a tool of exclusion
Lens and Monkkonen's research indicates that stringency in land use regulation correlates with income segregation, but that this correlation still exists in jurisdictions with permissive density.338 This suggests that other land use controls, beyond base zoning, contribute to income segregation. Our findings may contribute to an understanding of what may be occurring-at least within these five cities.
As discussed in Part 111, 339 all these cities move affordable housing development through entitlement much faster than market rate development. None of the 100% affordable housing developments within our data set were the subject of litigation. This suggests that entitlement processes (in terms of timelines) and environmental review (in terms of opportunity for legal challenge) were likely not the constraint on affordable housing supply during these three years. We emphasize, however, that because these cities approved so few 100% affordable housing developments within our dataset years, it is difficult to ascertain too much about timelines. Moreover, it is possible that opposition to affordable housing might shift if these cities approved substantially more 100% affordable housing developments or approved them in different areas.
Planning and zoning analysis indicates that four of our five cities provide for permissive density and employ tools to incentivize dense residential development near transit, but that permissive density and incentives for growth are not evenly distributed in these same cities. 340 This can create a scarcity issue (in terms of appropriately zoned land within cities) even though these same cities presumably have permissive density. Interview data suggests that the increasing cost of appropriately zoned land presents a major obstacle to affordable housing supply. This combined with drastic reductions in financing available for affordable housing impacts production, because combined, they create fewer opportunities for affordable housing development within these cities. Study participants across all categories repeatedly emphasized that legislative efforts must target both issues, as they operate together to limit deed-restricted affordable development, particularly after the loss of redevelopment funds.
Project data also confirmed that very few affordable units were entitled in our study years across all cities. San Francisco had the highest rate of affordable units entitled, at 11%, which came primarily through its inclusionary ordinance (outside of the former Redevelopment Areas). The lack of financing and suitable zoning for affordable housing developments, along with the importance of affordable housing mandates on market-rate developments in producing affordable units, lends some support to Lens and Monkkonen's recommendation for inclusionary zoning. 34 1 Still, inclusionary housing is insufficient to solve the 338. See Lens and Monkkonen, supra note 129.
339. See supra Part 111.7.
340. See supra Part 111.8.
341. See Lens and Monkkonen, supra note 129, at 12.
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Hastings Environmental Law Journal, Vol. 25, No. 1, Winter 2019 affordable housing crisis for all segments of the population. The formerly homeless, for example, require service-enriched housing 342 as do other special needs populations.3 43 Inclusionary housing aside, the fact that San Francisco had essentially no development of 5 or more units outside of specific plan areas and former Redevelopment Areas indicates inadequately zoned land may be a barrier to future dense development, both for affordable and market-rate.
D. More data is needed about the risk of displacement
through new development
Supply-side solutions have been proposed repeatedly in both the academic and policy literature, as well as proposed legal reforms, with some research identifying potential displacement as an immediate and direct consequent of development. This poses difficult questions for policymakers at both the local and state level on how to promote dense infill development without displacing existing residents, and whether or how local or state proposals are avoiding a tradeoff of displacement for increased future supply.344 Most of the proposed development in these five cities was on vacant, commercial or industrial land, except San Jose which had one entitled project involving the demolition of a 216 unit rent-controlled building subject to rent stabilization. However, these findings are limited. We only observed five cities in a region, and not all these cities had rent stabilization ordinances. More data across high cost cities with minimal vacant land, particularly those with rent stabilization ordinances, is needed to evaluate the potential impact of any proposed policy that may implicate this issue.
E. State-level reform proposals that would reduce local authority require better data
In these five cities, legal reform to promote equitable infill development may come in the form of state legislative reductions in local discretion over specific types of development; alternatively, legal reform may originate in the electorate or city council of these cities by choosing to reduce the amount of discretionary review for development. State-level action is difficult; there have been successful efforts to reduce local discretion, 345 but two major recent proposals for by-right or 342. See e.g., Kevin Fagan, Solution to SF's homeless problem starts with supportive housing, S.F. CHRONICLE (June 29, 2016), https://perma.cc/9EFH-J4U2. 343. The California Tax Credit Allocation Committee defines these special needs populations as "[i]ndividuals living with physical or sensory disabilities and transitioning from hospitals, nursing homes, development centers, or other care facilities; individuals living with developmental or mental health disabilities; individuals who are survivors of physical abuse; individuals who are homeless ... ; individuals with chronic illness, including HIV; homeless youth .... See 4 C.C.R. § 10325(g)(3) https://perma.cc/J3R4-9SWP. 344. See e.g., Zuk and Chapple, supra note 208.
345. See S.B. 35, 2017 2017-2018 Leg., Reg. Sess. (Cal. 2018).
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limited by-right development have failed.3 46 While our case studies suggest that some political will to increase affordable housing supply exists in at minimum four of these cities, it is unclear how broad that impulse extends across the state or how strong it may be.
Assuming a new proposal limiting local discretion over infill development with affordability is politically feasible, the variation in local processes observed in these five cities in a single region is substantial enough that without good data across multiple cities and regions, there is a high risk that statelevel reform of local process may not advance intended policy goals.
For example, recent legislation such as SB-35 347 attempts to eliminate the CUP requirement for certain projects consistent with zoning, but the complexity of the entitlement processes may prevent this legislation from accomplishing what is needed in these five cities. For instance, some cities impose a myriad of specific plan approvals on zoning-compliant projects that happen to be located within a specific plan area.3 48 Although these approvals are functionally similar to CUPs, on paper they are different processes. HCD has drafted proposed regulations that appear to cover specific plan permits within the ministerial process.3 49 San Jose provides another example. Most projects in San Jose go through the PUD process, which requires rezoning and thus renders a project ineligible for SB-35. Yet the same PUD process in San Francisco and Oakland can occur without rezoning. Even though the PUD process accomplishes the same goals in these jurisdictions, the application is significantly different. Without knowledge of these nuances, lawmakers cannot draft legislation that accurately addresses the problem and provides clear guidance to local stakeholders. Moreover, without an understanding of the distribution of non-zoning compliant projects entitled each year, lawmakers may find their legislative tools unable to solve the right problems. Even legislation that is effective when enacted may quickly become ineffective due to local government efforts to restore control over new development. For instance, SB-35 may be unable to avoid cities downzoning or enacting more inflexible design criteria to force all approvals through rezoning or variance processes that are not subject to state streamlining. SB 166-California's "no net loss" law-prohibits jurisdictions from reducing residential density to a lower residential density than what was utilized to determine compliance with housing element law.35 0 While this helps mitigate unintended impacts of SB-35, it is unclear if the provision applies 346. See CAL. DEP'T OF FIN., STREAMLINING AFFORDABLE HOUSING APPROVALS:
TRAILER BILL TECHNICAL MODIFICATIONS (6-10-16) (2016), https://perma.cc/GDS6-XVCR, at 5 6; S.B. 827 Reg. Leg. Sess. (2017-2018) (Cal. 2018). 347. See S.B. 35, 2017 Leg., Reg. Sess. (Cal. 2018).
348. Examples of this include the Large Project Authorization in certain use districts of San Francisco's Eastern Neighborhood plan area or the Planned Community Permit in Redwood City's Downtown Precise Plan. See S.F. MUNI. CODE § 329; REDWOOD CITY MUNI. CODE § 47.1-47. 5.
349. See Memorandum from Cal. Dep't. Housing & Community Dev., Draft SB-35 Regulations § 301(a), Sept. 28, 2018, https://perma.cc/J5U7-KDKN (defining the ministerial process as "non-discretionary and cannot require a conditional use permit or other discretionary local government review or approval"). 350. See CAL. GOV'TCODE § 65863 (2018).
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Hastings Environmental Law Journal, Vol. 25, No. 1, Winter 2019 to charter cities.35 1 Moreover, SB-35 may be ineffective in jurisdictions where base zoning has not been updated to reflect General Plan updates.3 52 Finally, jurisdictions are increasingly regulating density based on height and building form.
In many places, height-not a limit on dwelling units per acre or FAR-is the major barrier to building more units. Future state legislation should consider these evolving zoning standards. 353
F. The state should not only mandate, but directly support good data reporting
Perhaps the single most important finding explored in this article is also the most obvious-poor data access to project approvals in many jurisdictions.
Results are only accurate to the extent that data provided to the public through public portals and commission minutes are accurate. While better-resourced jurisdictions have advanced parcel information tools and sophisticated websites, many rely on outdated online permit systems that are not updated with current data.
Oakland is an extreme example of what can result from inadequate resourcestheir online permit system often contains incomplete information and has no link to approval documents. While we supplemented these shortfalls with minutes from Planning Commission and City Council meetings, some projects go through an administrative, department-level review for which complete data was not available.
While we erred on the side of caution and included six projects in our database that do not have complete data, we caution that it is possible that these six projects skew the total number of approved projects higher than what it actually is. Additionally, Oakland's pre-application process that some projects utilize prior to submitting a formal application was also inconsistently logged in their online system, which could influence approval timelines. We cannot infer that Oakland's poor data access is either deliberate or a reflection of local policy; the city's continued work to supplement state requirements around open government suggests the opposite.3 54 It is more likely that Oakland, which faces a uniquely persistent budget 351. Section 65803 exempts charter cities from compliance with §§ 65800 65912 of the Planning and Land Use Code unless explicitly stated otherwise. The text of SB 166 does not explicitly apply its requirements to charter cities. All of the jurisdictions studied are charter cities. See CAL. Gov'T CODE § 65803 (2018). For a legal interpretation that the new requirements do apply to charter cities, see Public Interest Law Project, SB 166 (2017) Memorandum at 6, https://perma.cc/TK7V-AMYD. Without an amendment to the Government Code, determining applicability will likely require litigation. 352. See discussion of San Jose, supra Part I n.33.
353. We note that SB 827, which failed, attempted to do this. See S.B. 827, 2017- 2018 Leg., Reg. Sess. (Cal. 2018) (the proposed legislation exempted eligible applicants from certain height requirements).
354. In 1997 Oakland passed its own Sunshine Ordinance to supplement Brown Act requirements around open government, developed in partnership with the League of Women Voters and the California First Amendment Coalition. This ordinance covers meeting minutes and agendas relevant to discretionary approvals of residential development. See OAKLAND MUNI. CODE §§ 2.20.010 et seq. (Oakland Sunshine Ordinance).
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crisis, 3 55 is severely under-resourced given city initiatives to accelerate development and the growing demand for housing.
In contrast, cities like San Francisco have excellent data access that allows us to determine precisely what was approved each year according to our parameters. However, even good publicly accessible data does not fully reflect the complexity of the planning process. San Francisco employs a streamlined application process 356 that integrates processes that constitute distinct approval pathways in other jurisdictions, like design review. The fact that there are no formal design review approvals in San Francisco does not mean these processes are not happening. San Francisco's various specific plan permits also combine what is essentially a CUP and variance process into one, reducing the number of CUPs and variances in that jurisdiction. More projects are receiving variances than these numbers suggest. Jurisdictions like San Jose, on the other hand, employ very distinct approval processes, which also influences timeline. The majority of developments in San Jose go through the PUD process, which involves a rezoning and a permit approval that happen sequentially, rather than in tandem. Our interviews suggest that developers often complete the rezoning and then sell the land to different developers who later secure the permit. The time lag between these two milestones may slightly exaggerate approval timelines in San Jose for PUD projects.
Although top-down state reform of environmental regulations (or local regulation over land use) may encounter substantial difficulties, improving data access is an important first step to accurately understand the problem. Extracting project-level data is very time and resource intensive. There are few jurisdictions statewide that have development approval data in one centralized repository.
Supporting jurisdictions to provide access to project-specific data on land use approvals, CEQA compliance, and overall time frames will help inform top down policy making in critical ways. Improving the quality of data and access to data can also help researchers and policymakers identify how long processes take and identify inefficiencies and redundancies that exist in local processes. This could also immediately help affordable housing developers determine what funding is required for the entitlement process. Finally, publicly available data about approval timeframes and processes may increase public and political pressure on local governments to make processes more effective and efficient.
SB 35 has somewhat advanced this issue some, in that it requires annual data reporting (which includes reporting total number applications received, projects entitled, building permits issued, and total number of certificates of occupancy issued).35 7 The state could build on this requirement to support this 355. See Daniel Borenstein, Despite booming economy, Oakland finances deteriorate, THE MERCURY NEWS (March 3, 2017), https://perma.cc/8MT4-7X3P. 356. In early 2018, San Francisco overhauled its entitlement application process.
While this new process would likely impact data collection for projects applying for entitlements post-2018, this new process does not affect our data years. CITY AND COUNTY OF SAN FRANCISCO, CHANGES TO PRELIMINARY PROJECT ASSESSMENT, Apr. 2, 2018, https://pe rma.cc/AEE5-LD4T.
357. See CAL. GOV'T CODE § 65400 (2018); see also Elmendorf, supra note 324, at 47.
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Hastings Environmental Law Journal, Vol. 25, No. 1, Winter 2019 work through two additional mechanisms. The first would be funding to support existing data reporting requirements (including those proposed here). As discussed previously, not all jurisdictions are equally resourced, and this appears to have a significant impact on the quality of a city's data. We anticipate that without additional support, at least some city reports will be unreliable. The second would be an enhanced housing element reporting obligation that requires jurisdictions to log information on approval processes and timeframes in a centralized repository with consistent terminology across jurisdictions. To the extent that processes are so dissimilar that they cannot be analogized, this centralized repository could contain explanations. This will aid not only in understanding entitlement processes, but will also help legal organizations to enforce housing element obligations.
Housing issues present regional concerns, and current data accessibility and quality presents obstacles to comparative and regional analysis on both trends (rate of entitlement), and processes (which processes may work better).
Smaller steps would also be beneficial. For example, linking existing GIS or zoning data with assessor parcel information and building permit systems is a great first step to understanding how entitlements and building permit processes interact. Linking these systems to provide this data can make housing element reporting obligations more robust. Ideally, improved data access can illuminate more of the internal planning process, by providing detail that is not immediately apparent from approval documents (like the amount of time environmental review adds to the approval process). Interview data suggests that improved entitlement reporting and data can particularly benefit affordable housing developers.
Financing affordable housing requires artful layering of state, local, and federal finance-each with their own set of eligibility requirements. 358 Funding applications also happen in cycles. For example, in California, the 9% Low Income Housing Tax Credit has two funding rounds per year. 359 For most of these programs, the site must already be entitled in order to be eligible for funding. 360 Thus, timing entitlements with the funding cycles is very important to affordable housing developers. In an era of limited funding, timing the cycle correctly maybe the difference between a project being funded or not. Improved data can assist developers to improve their predevelopment strategy, especially in areas where they have less experience developing. As discussed above, we observed that these jurisdictions appear to process affordable housing faster than market rate housing. 358. See e.g., Affordable Housing and Sustainable Communities Program, CAL.
DEP'T OF HOUSING AND COMMUNITY DEV. (last visited Oct. 26, 2018), https://perma.cc/ TBV2-E759; Low Income Tax Credit Programs, CAL. TAx CREDIT ALLOCATION COMM. (last visited Oct. 26, 2018), https://perma.cc/C6NE-7N2Q; See also Affordable Housing Trust Fund, CITY OF Los ANGELES AND CMTY. INV. DEP' T. (last visited Oct. 26, 2018), https:
//perma.cc/99KB-SK5S.
359. See e.g., Application Information, CAL. TAx CREDIT ALLOCATION COMM. (last visited Oct. 26, 2018), https://perma.cc/D8CS-8S7H (detailing deadlines for two funding rounds).
360. See e.g., 4 C.C.R. § 10325(f)(4) (2018) ("Applicants shall provide evidence, at the time the application is filed, that the project as proposed is zoned for the intended use and has obtained all applicable local land use approvals which allow the discretion of local elected officials to be applied...").
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From this, we can infer that some jurisdictions treat affordable housing differently, and nuances in process should be made publicly available. This is especially true in jurisdictions where affordable housing entitlement is slower than comparable market-rate development.
Conclusion: Complex issues require a multi-pronged research approach
Our work continues and we are exploring how entitlement operates within other cities throughout the state. At each turn we are reminded there is no single solution to this perplexing problem. Even within land use regulation, entitlement is not the only issue for housing production in California. Increasingly onerous building safety regulations-ranging from seismic standards to renewable energy mandates-may also impose substantial costs on development. The building permit process itself is highly variable by jurisdiction, and interviews suggest it is another source of time delay. Interview participants also referenced construction and labor costs as a major barrier to feasibility. Labor costs, however, do not stem solely from Project Labor Agreements36' or prevailing wage requirements;3 62 developers have also noted a drop in skilled tradespeople post-Great Recession, which has created labor scarcity and implicates workforce development issues.
Further study on these factors is necessary. More information is also required on the demand side of the equation-specifically how income and preferences influence where people live and whether they use transit. In sum, we need a better understanding of both sides of the equation (supply and demand), with a clear focus on equity in order to reduce GHG emissions through equitable infill development. 361. Project Labor Agreements are collective bargaining agreements between building trade unions and contractors that govern terms and conditions of employment for all workers on a construction project. See Project Labor Agreements, AFL-CIO, (last visited Oct. 26, 2018), https://perma.cc/C8VX-UC8G.
362. See, e.g., CAL. Gov. CODE § 65913.4(a)(1)-(10) (2004) (defining prevailing wage to be the "general prevailing rate of per diem wages for the type of work and geographic area, as determined by the Director of Industrial Relations pursuant to Sections 1773 and 1773.9 of the Labor Code").
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Getting it Right:
Examining the Local Land Use Entitlement Process in
California to Inform Policy and Process
Working Paper
February 2018
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ACKNOWLEDGEMENTS
AUTHORS
FUNDING
Moira O’Neill, JD
Associate Research Scientist, Law and City & Regional Planning, Institute of Urban and Regional Development, University of California at Berkeley; Adjunct Associate Research Scholar, Graduate School of Architecture Planning and Preservation, Columbia University.
Giulia Gualco-Nelson, JD
Anticipated JD 2018, University of California at Berkeley, Berkeley Law.
Eric Biber, JD
Professor of Law, University of California at Berkeley, Berkeley Law.
The Silicon Valley Community Foundation and the Graduate School of Architecture, Planning and Preservation at Columbia University provided financial support for this research.
Graphic design assistance provided by Stephanie Yee-Kay Chan.
All images are used with appropriate licenses.
We want to thank law students Heather Jones, Rachel Kramer, Erin Lapeyrolerie, and Nathan Theobald, and undergraduate research apprentices Madeline Green, Dulce Walton Molina, Adrian Napolitano, Maxwell Radin, Alicia Sidik, and Dean Wyrzykowski, for all of their assistance with this study.
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Through collaborative, interdisciplinary research and practice, IURD supports students, faculty, and visiting scholars to critically investigate and improve processes and outcomes that shape urban equity around the world. IURD defines urban equity as focused efforts to address avoidable inequalities by targeting resources and improvements for populations and places that have experienced socioeconomic, racial, gender and/or other injustices.
One of IURD’s research areas is Urban Governance, which includes the Law and Governance Research Group. This research group is collectively engaged in research at the intersection of planning, environmental and land use law, and local government. The research group pursues engaged scholarship to advance IURD’s mission of promoting urban equity and support informed policy making.
The Urban Community and Health Equity Lab is based in the Graduate School of Architecture, Planning, and Preservation (GSAPP) at Columbia University. The mission of the Urban Community and Health Equity Lab is to conduct interdisciplinary research to transform institutions, policies, and practices that cause health inequities, both domestically and internationally. Specifically, its research uses a social justice framework, and is at the intersection of architecture, law, public health, public policy, and urban planning.
The Center for Law, Energy & the Environment (CLEE) channels the expertise and creativity of the Berkeley Law community into pragmatic policy solutions to environmental and energy challenges. We work with government, business, and the nonprofit sector to help solve urgent problems that require innovative and often interdisciplinary approaches. Drawing on the combined expertise of faculty, staff, and students across UC Berkeley, we strive to translate empirical findings into smart public policy solutions that better our environmental and energy governance systems.
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TABLE OF CONTENTS
Executive Summary
What is at stake?
What are we studying?
What have we learned so far?
Key Finding #1: All residential development over five units is discretionary in each jurisdiction.
Key finding #2: The mechanisms by which cities require discretionary review are extremely different, and usually redundant.
Key finding #3: How these jurisdictions apply environmental review under the California Environmental Quality Act varies.
Key finding #4: There are significant variations in timeframes for entitlements across jurisdictions and across project sizes within the same jurisdiction.
Key finding #5: Even when jurisdictions use similar state law provisions to facilitate environmental review, the timeframes can vary.
Key Finding #6: There is significant variability across jurisdictions in terms of total projects entitled, total number of units entitled, total number of units entitled per capita, and density of dwellings entitled per acre.
What are the implications?
What do we recommend right now?
Table of Figures
Figure 1. Discretionary Review of Developments Consistent with Base Zoning Figure 2. Types of Discretionary Review Mechanisms
Figure 3. Instances of Discretionary Review across Jurisdictions Figure 4. Types of CEQA Review Mechanisms
Figure 5. Instances of CEQA Review across Jurisdictions Figure 6. Percentages of CEQA Review Type by Project
Figure 7. Mean Project Size (Units) by CEQA Review Type Figure 8. Total Number of Units Per CEQA Review Type
Figure 9. Mean Approval Time by Project Size
Figure 10. Median Approval Time by Project Size
Figure 11. Project and Units Entitled Per Capita
Figure 12. Dwelling Units Per Acre
2 3
4 6
6 7
9 12
13 13
16 20
6 7
8 10
10 11
11 11
12 12
14 14
Agenda Item #5.1.
EXECUTIVE SUMMARY
California’s housing affordability crisis has rightly received a great deal of attention by state lawmakers, the press, academics, and ordinary Californians. Important questions raised in this discussion are: What laws or regulations might impede housing construction in high-cost areas? What solutions might help reduce those barriers with a minimum impact on other important values, such as environmental protection, public participation, and equitable treatment of low-income communities of color? More specifically, does state environmental law (the California Environmental Quality Act, CEQA), or local land-use regulations, constrain housing development?
To help answer that last question, we collected data on all residential development projects (of more than five units) over a three-year period in five Bay Area cities (San Francisco, Oakland, San Jose, Redwood City, and Palo Alto). We analyzed the law applicable to these residential development projects, including the local zoning ordinances, and interviewed important actors in the residential development process in each of these five cities.
We found that these local governments are imposing discretionary review processes on all residential development projects of five or more units within their borders. That means even if these developments comply with the underlying zoning code, they require additional scrutiny from the local government before obtaining a building permit. This triggers CEQA review of these projects. In other words, what drives whether and how environmental review occurs for residential projects is local land-use law. Our data shows that in many cases, these cities appear to impose redundant or multiple layers of discretionary review on projects.
We also found that the processes by which local governments review residential development projects under their zoning ordinances and under CEQA varies from city to city. As a result, developers seeking to construct residential projects often must learn to navigate very different and complicated land-use systems, even if they work in the same region. This appears to particularly burden smaller development projects. Our data also shows that these cities rely on streamlined CEQA procedures for the majority of their residential projects, including many large projects. The effectiveness, however, of those streamlined procedures in terms of reducing timeframes for project approval varies greatly from city to city, indicating that a range of non-legal factors (such as practices in planning departments, or the amount of resources dedicated to planning) may impact development timelines.
Finally, our own research process also revealed that the kind of project level data that we collected, while essential to crafting effective solutions to the California housing crisis, is not easily available. We therefore recommend that the legislature develop a consistent and uniform data reporting program for this data, which will benefit policymakers, developers, and the public as a whole.
Agenda Item #5.1.
WHAT IS AT STAKE?
Housing costs throughout California continue to rise—particularly in metro areas. As the state legislature responded last fall with the passage and signing of housing bills1 meant to address escalating housing costs, legislators and others acknowledged that more is needed to address California’s housing crisis.2 One recurring theme in the ongoing coverage and discussion of the housing crisis is an argument that state-mandated environmental review under the California Environmental Quality Act (CEQA) is a significant contributor to the housing crisis because it adds time and money to the development process.3 Local land-use regulations might also play a significant role. Existing research correlates the overall stringency of a jurisdiction’s land use regulations with high housing costs.4 While this research recognizes that multiple components contribute to increased costs, it does not identify which specific elements of local land use regulation or state environmental review contribute disproportionately to housing costs. As economists have observed, the “heterogeneity in land use restrictions across localities is so extensive that it is almost impossible to describe the full complexity of the local regulatory environment.”5 Despite these limitations, the impact of this research and similar work has been far reaching, surfacing in statewide policy briefs.6 We assume that regulation of land-use development in California contributes to the state’s housing crisis by increasing development approval timelines, which in turn drives up the cost of development. But that still leaves the question of which aspects of state and local regulation are the primary barriers to additional residential development. Answering that question is essential to developing effective legal reforms, and it requires careful analysis of how individual land-use regulations operate within local contexts. CEQA is only one part of the overall regulation of California’s land-use development. In general, constructing a major housing development requires local government approval at multiple stages. The approval process to obtain a building permit is referred to as the entitlement process, and CEQA applies to a development if the local government’s entitlement process is discretionary. If the development is “as of right”—meaning a development meets certain zoning and planning requirements and does not need any additional scrutiny by the local government to get a building permit—as a general matter, no CEQA compliance is required.
In addition, CEQA can take a range of forms and impose different levels of burden on the developer. Local governments often have significant ability to shape the kinds of CEQA compliance that individual developments must satisfy.
If CEQA poses a significant obstacle to housing development, then legal reform that minimizes the loss in environmental protection while allowing for increased housing production might be the right approach.
But because CEQA comes into play where a local government has the discretion to approve/disapprove a proposed project, targeting a state environmental review statute may do little to address the housing supply crisis if local regulation of land-use development through planning and zoning is the real issue. Misguided CEQA reform could undermine environmental protection throughout the state without providing meaningful improvements to our housing situation.
Agenda Item #5.1.
WHAT ARE WE STUDYING?
Determining whether a state law like CEQA drives delays in entitlements within local jurisdictions requires answering two important questions: (1) How much development is actually occurring as of right, and how much development is subject to discretionary government review within local jurisdictions? (2) If CEQA environmental review is occurring, in what form does it take? To answer these questions, we used case studies7 to better understand a local problem with regional and statewide implications. For our first set of case studies, we selected charter cities* of various sizes within the same strong market region—the Bay Area in Northern California.
All five cities, Oakland, Palo Alto, Redwood City, San Francisco, and San Jose, are located within the same regional economy characterized by robust economic growth, high housing demand that outstrips supply and acute affordability issues.8 All of the cities have the capacity for Transit Oriented Development (TOD).9 Housing development within this region would therefore promote sustainable growth goals.
We also chose our first cities from the Bay Area because the California Legislative Analyst’s Office has attributed high housing costs statewide in large part to the lack of housing supply in California’s coastal communities.10 That report specifically identified the San Francisco Metropolitan Division (MD) and the San Jose-Sunnyvale-Santa Clara Metropolitan Statistical Area (MSA) as having the first and second highest housing costs in the state in 2015, with the Oakland-Hayward-Berkeley MD having fourth highest housing costs statewide. And all five cities have complex local land use ordinances that typify the type of stringent regulation called out by existing research. These five cities therefore offered an excellent starting point for this research.
Each of our case studies began with a review of local ordinances11 that contain planning and zoning rules, followed by careful analysis of how each residential development of five or more units navigated the entitlement process in 2014, 2015, and 2016.12 Next, we completed a total of 29 in depth interviews with city planners, market rate and affordable housing developers, consultants, private counsel, city attorneys, and representatives from community-based organizations, across these five cities.13 These interviews uncovered local perceptions of the approvals process, the role of community in the public approvals process, and important project context (including the local political climate and community tensions at play) not immediately obvious in the specific project data. While we are continuing our research and adding jurisdictions to our data set, we present initial findings from our research on these five cities below. This is only the first in a series of reports that will detail our findings, and these findings are limited to data pulled from our first set of cities. We are collecting additional data from other cities throughout the state. * Charter cities within California enjoy some freedom to legislate at the local level over “municipal affairs” even if a conflict with State law may exist under Article XI, section 5 of the California Constitution. Although the California Constitution does not expressly define “municipal affair,” land use and zoning are consistently classified as exempt from the planning and zoning provisions of the California Government Code unless the city’s charter indicates otherwise. See e.g., CAL. GOV’T CODE §§ 65803, 65860(d); City of Irvine v. Irvine Citizens Against Overdevelopment, 25 Cal. App. 4th 868, 874 (1994). 4 Agenda Item #5.1.
Agenda Item #5.1.
6 WHAT HAVE WE LEARNED SO FAR?
Key Finding #1: All residential development over five units is discretionary in each jurisdiction.
All of the jurisdictions we examined require discretionary review for residential developments of five or more units. In fact, in four of our five Bay Area jurisdictions, residential developments of two or more units require discretionary approval. That means even if these developments comply with the underlying base zoning district’s use and density requirements, they require additional scrutiny from the local government before obtaining a building permit. The table in Figure 1, below, provides an overview.
Figure 1. Discretionary Review of Developments Consistent with Base Zoning Jurisdiction Primary Discretionary
Review Mechanism
Residential Developments
Exempt from Discretionary Review
San Francisco Building Permits None
San Jose Site Development Permit Single-family homes in limited circumstances14
Redwood City Architectural Permit One-story single family homes and duplexes
Palo Alto Architectural Review Up to two single-family homes and two duplexes15
Oakland Design Review Secondary units
Agenda Item #5.1.
Key Finding #2: The mechanisms by which cities require
discretionary review are extremely different, and usually redundant.
California land use
law offers cities a range
of tools to review and
approve housing
development. Cities
typically choose among
these tools to ensure
discretionary review
of residential development. These five cities
demonstrate how varied those choices are.
Though cities generally
draw on land-use law
tools to ensure discretionary review, San
Francisco’s city charter
imposes discretionary
review on all new developments.16
The first column lists tools that impose discretionary review that are applied even where a proposed project is consistent with the underlying base zoning district’s use and density requirements. The second column lists requirements for discretionary review for categories of projects that are built within the framework of the zoning ordinance—in other words, the zoning ordinance itself contemplates that some projects must obtain one of these types of permits. The third column provides categories of discretionary review that attach to a project when the proposed project would not comply with the zoning ordinance; this includes when the developer is seeking an exemption from the zoning ordinance (variance), or asking the city to zone the project site differently (rezoning), or change or update the General Plan to allow for the proposed project.
Figure 2. Types of Discretionary Review Mechanisms
Consistent with
zoning
Consistent but
zoning requires
discretionary
approval
Inconsistent and
requires
discretionary
approval
Design Review
Architectural Review
Site Development
Permit
Historic Preservation
Review / Certificate of
Appropriateness
Conditional Use
Permit (CUP)
Specific Plan
Permits
Planned Unit
Developments
(PUD)
Variance
Rezoning
General Plan
Amendment
7 Agenda Item #5.1.
8 As the table in Figure 3 shows above, the total numbers of land use/planning approvals (such as rezonings, conditional use permits, or General Plan amendments) are greater than the number of overall development projects in each jurisdiction. This suggests there are significant redundancies in the way these jurisdictions map discretionary review to residential developments. A single project might need to obtain Design Review approval and a Minor Variance from the Director of the Planning Department and a rezoning from the City Council.17 This requires navigating multiple levels of local government where only one approval process would be sufficient to pull the project within the scope of local discretion. It should also be noted that if the development requires the subdivision of land into smaller parcels, additional discretionary review by local governments generally applies as well.
Figure 3. Instances of Discretionary Review across Jurisdictions Design /
Site Plan
Review
Historic
Preservation
CUP Specific
Plan
Permit
PUD Variance Rezoning General Plan
Amendment
Total
Number of
Projects
San Francisco N/A N/A 26 46 2 29 1 1 85
San Jose 13 3 0 N/A 52 0 48 5 67
Oakland 66 0 31 N/A 1 26 2 0 67
Palo Alto 5 1 0 N/A 0 3 0 0 5
Redwood City 9 4 0 4 4 2 0 0 13
Agenda Item #5.1.
9 * Tiering is way to streamline environmental review under CEQA by allowing environmental review of a proposed project to focus on a narrow set of issues that have not already been evaluated in a prior EIR. It necessarily requires a prior EIR that is usually connected to a prior and large-scale planning approval (for a community plan or specific plan, for example). ** A Mitigated Negative Declaration is a CEQA document where a developer recognizes that a project as originally proposed would have had significant environmental impacts, so the developer proposes modifications that instead will take certain steps to eliminate the risk of significant environmental impacts.
Key Finding #3: How these jurisdictions apply environmental review under the California Environmental Quality Act varies.
These cities take a diverse range of approaches to comply with CEQA requirements. As Figures 5 and 6 show, relatively few projects within these five cities require a full Environmental Impact Report process (or EIR). Many of these jurisdictions appear to be making good faith efforts to increase their supply of housing by engaging in specific planning strategies that link housing and jobs to transportation and facilitate environmental review for developers. This means that the city is tapping into state-level sustainable development initiatives and doing the bulk of the work to comply with state environmental review requirements, rather than imposing additional time and costs on to developers to comply with CEQA. Like the discretionary review mechanisms discussed above, many projects are receiving multiple CEQA exemptions, which leaves open the question of exploring why planners take these additional measures.
Analyzing project size as a function of CEQA, our data shows that projects with EIRs in these cities generally tend to be larger than projects that undergo other types of CEQA review (see Figure 7).
Nevertheless three jurisdictions—San Francisco, Oakland, and Redwood City—did not prepare an EIR for their single largest project in our dataset years. Significant variations in other categories also persist. Project and Tiering-Based Exempt* projects in San Jose tend to be larger on average than EIR projects in Oakland. Projects with (Mitigated) Negative Declarations** in San Jose are smaller than Exempt projects in all jurisdictions but Palo Alto.
Because so many projects complete CEQA review via mechanisms other than EIRs, a large majority of all approved units did not require an EIR for project-level CEQA review. Our data indicates that compliance routes other than EIRs are not reserved for extremely minor projects, and are a key component of infill residential development in California.
Agenda Item #5.1.
Figure 4. Types of CEQA Review Mechanisms
Figure 5. Instances of CEQA Review across Jurisdictions Project-Based
Exemption
Tiering-Based
Exemption
(Mitigated) Negative
Declaration
Environmental Impact
Report
Full review
requirements
pursuant to
CEQA
Reduced review requirements because of the
minimal environmental
impacts of the project
Exemptions or reduced
review because there
has been prior
CEQA review
Exemptions based on
location and project
characteristics
§ 15332 Infill Housing
§ 15303 New
Construction of Small
Structures
§ 15183 Community
Plan Exemptions
§ 15164 EIR Addendum
or § 15168 Program EIR
§ 21064 Negative
Declaration
§ 21064.5 Mitigated
Negative Declaration
§ 21061 EIR
Project- Based
Exemptions
Tiering-Based
Exemptions
Mitigated
Negative
Declaration
Negative
Declaration
EIR Total Number of
Projects
San Francisco 4 68 7 2 6 85
San Jose 1 30 23 4 13 67
Oakland 56 66 0 0 2 67
Palo Alto 2 1 1 0 1 5
Redwood City 2 9 1 4 1 13
10 Agenda Item #5.1.
Figure 8. Total Number of Units Per CEQA Review Type19
ProjectBased
Exemptions
Tiering-Based
Exemptions
MND/ND EIR Total Number
of Units
San Francisco 269 5,885 1,260 1,121 8,534
San Jose 15 5,310 1,778 4,473 11,575
Oakland 1,797 4,071 0 284 6,152
Redwood City 102 696 268 8 1,074
Palo Alto 19 70 8 180 277
Total 2,202 16,031 3,314 6,065 27,612
11 Figure 6. Percentages of CEQA Review Type by Project Project-Based and Tiering Exemptions MND/ND EIR
San Francisco 82% 11% 7%
San Jose 44% 38% 18%
Oakland 98% 0% 2%
Redwood City 65% 29% 6%
Palo Alto 60% 20% 20%
Figure 7. Mean Project Size (Units) by CEQA Review Type Project-Based and Tiering Exemptions MND/ND EIR
San Francisco 92 140 229
San Jose 186 66 382
Oakland 78 0 172
Redwood City 96 105 8
Palo Alto 30 8 18018
Agenda Item #5.1.
Key Finding #4: There are significant variations in timeframes for entitlements across jurisdictions and across project sizes within the same jurisdiction.
Figures 9 and 10 show the mean and median approval timelines for projects of varying sizes in each jurisdiction. Projects that experienced unusually slow or fast approval timeframes heavily influence the mean approval timeline. Median time frames more accurately reflect the time frames a typical project would experience.
Figure 10. Median Approval Time by Project Size
MONTHS
Redwood City Palo Alto San Jose San Francisco Oakland
Figure 9. Mean Approval Time by Project Size
MONTHS
0 5
10 15
20 25
30 35
40 45
50 Redwood City Palo Alto San Jose San Francisco Oakland 0-25 Units 26-50 Units 51-100 Units 101+ Units 12
0 5
10 15
20 25
30 35
40 45
50 Agenda Item #5.1.
Key Finding #6: There is significant variability across jurisdictions in terms of total projects entitled, total number of units entitled, total number of units entitled per capita, and density of dwellings entitled per acre.
Measuring the time it takes to entitle a project is one way to understand how entitlement processes enable development in a jurisdiction. Counts of actual projects and units are another. The table below provides a summary of how many projects and how many units these five cities entitled in 2014, 2015, and 2016. Project and unit count alone cannot convey a complete picture of how entitlement processes operate within each city. By calculating how many units each city is entitling per capita,21 we can get a better sense of how many units each city is entitling relative to their respective sizes measured by population. Examining the data this way, we see that Oakland entitles the most units given its population size, followed by Redwood City, then San Jose, San Francisco, and Palo Alto (see Figure 11).
Calculating both the mean and median number of dwelling units per acre in each jurisdiction can also allow us to compare projects entitled in each jurisdiction in terms of density, which has important implications for state level sustainability goals.22 Our data indicates that projects entitled in San Francisco, generally, during this three year period are of a higher density than the other jurisdictions we examined (see Figure 12); however, high mean density values observed in jurisdictions like Oakland suggests that there are a small number of very dense projects being approved, despite lower overall density. San Jose— which on average entitles the largest projects of our case study jurisdictions—has relatively low density even when compared to smaller jurisdictions like Redwood City.
Key Finding #5: Even when jurisdictions use similar
state law provisions to facilitate environmental review, the timeframes can vary.
These cities apply the same environmental review provisions in different ways—with significant variations in the timelines for entitlement. For example, the City of Oakland and the City of San Francisco both use the § 15183 Community Plan Exemptions (CPE) to reduce CEQA compliance obligations for proposed projects within plan areas* that have a relatively recent full EIR that the respective city completed. But Oakland’s CPE process moves much faster than San Francisco’s. The median CPE entitlement in Oakland is 7 months. In San Francisco, a CPE takes 23 months (nearly two years). In contrast, a full EIR in San Jose, for which no prior study has occurred, takes 24 months. 20 * Plan Area terminology varies according to jurisdiction and the size of the plan area. Redwood City refers to these plans as “Precise Plans,” San Jose and Oakland both use the terms “Area Plans” and “Specific Plans,” and San Francisco calls them “Area Plans.” 13 Agenda Item #5.1.
14 Figure 11. Project and Units Entitled Per Capita
Figure 12. Dwelling Units Per Acre
Total Projects Total Units Units Per 1,000 People
Oakland 67 6,152 15
Redwood City 13 1,074 13
San Jose 67 11,575 11
San Francisco 85 8,534 10
Palo Alto 5 277 4
UNITS PER ACRE
0 50
100
150
200
250
300
Redwood City Palo Alto San Jose San Francisco Oakland
Mean Density Median Density
Agenda Item #5.1.
Agenda Item #5.1.
16 WHAT ARE THE IMPLICATIONS?
In these cities, the pace of housing development appears to be driven by the amount and sequence of discretionary review, not the CEQA process. These five local governments are choosing to opt into CEQA through their choice to embed discretionary review into the entitlement process. The problem (and potential costs) associated with environmental review do not appear to originate with state environmental regulation. Also, some of our interview participants discussed the necessity of “bullet-proof EIRs”* to forestall CEQA litigation from neighborhood groups. But we have not observed many of these EIRs in these five cities, suggesting that the variation in entitlement process timelines between these five cities may not be easily attributed to neighborhood groups abusing state regulation in response to proposed project characteristics. While op-eds, research, and reform proposals often focus on EIRs and CEQA litigation,23 the data from these five cities indicates that some of the largest projects, those that are the most likely to have significant environmental impacts, did not require EIRs (although EIR projects do tend on average to be larger than non-EIR projects).
This data also shows how these cities, while preserving their discretionary review, are often employing tools to facilitate CEQA compliance. As Figures 9 and 10 above show, large projects do not always take longer to entitle than small projects, which suggests local practices in a given jurisdiction—rather than project-specific characteristics—are driving the entitlement timeline. These practices vary, but they tend to be outside the control of the developer-applicant. Examples we observed in our cities range from stafflevel variations in performing application intake and departmental pre-selection of environmental consultants, to higher-level decisions about the amount of commercial development that must occur before a developer-applicant can even propose residential development. These choices in practice might also be a response to political and fiscal pressures that also prompt cities to embed discretionary review into the entitlement process. We are pursuing additional research now to better understand this issue, and to explore what is occurring in other jurisdictions throughout the state.
The lack of consistency in the entitlement process across these jurisdictions makes it difficult to navigate development within each of these cities unless you have substantial local knowledge.
Though entitlement processes remain fairly consistent within a given jurisdiction, the variation across these jurisdictions presents informational barriers for newcomers to the market—even for some working within the same region. This complexity and variation may also impact the capacity of planning staff to help developers understand the entitlement process. Our interview data also confirms that well-capitalized developers with existing relationships and experience in specific jurisdictions are the best situated to navigate these complex local contexts, providing them a competitive advantage. Also, as noted, larger projects do not necessarily take more time, and often take less time, than smaller projects. If environmental review were the issue, this is not intuitive. This suggests that larger projects—to the extent that they benefit from expertise and better capitalization—can navigate the process in these cities in less time than smaller-scale developments. This could raise concerns about monopolization as the cost of acquiring local knowledge keeps new market participants out. The difficulty in accessing this data for our research purposes, described below, also lends support to this proposition. * “Bullet-proof” refers to an EIR document that has sufficient analysis of environmental impacts and technical information to withstand judicial review should the project be challenged in court.
Agenda Item #5.1.
Dealing with process is a necessary but insufficient approach to reform. There is variability in outcomes across jurisdictions because of different local processes and local planning practices. The data shows that even where two cities use identical state law provisions to facilitate the environmental review process, the approval timelines still vary considerably. The example provided above, comparing San Francisco and Oakland, illustrates this. Oakland’s code, while similar to San Francisco’s, appears more inflexible.* And yet the entitlement process employed in Oakland still takes considerably less time. Interview data also suggests that local politics informs local interpretation and application of state law and local land-use ordinances. This suggests that proposed reforms should contemplate standardizing more planning practices across jurisdictions.
In other cases, local process and planning practice are not even the issue. San Francisco, for example, is unique in that it does not impose design or site development review on all projects. Absent its city charter that renders building permits discretionary, San Francisco would have permitted as of right eight projects — each ranging from 8 to 22 units. As Figure 1 shows, no other planning code in our other four case studies would permit this level of development without a discretionary approval. This is an example of how a charter city can impose discretionary review through a mechanism outside of the formalized planning process.
The variation in processes at the local level is substantial enough that without good data, there is a risk of unintended negative consequences when attempting to reform local process at the state level.
Extracting project-level data is time and resource intensive. We know from our ongoing research that few jurisdictions statewide have development approval data in one centralized repository. Requiring jurisdictions to provide access to project-specific data on land use approvals, CEQA compliance, and overall time frames will help inform top down policy making in critical ways.
For example, recently enacted legislation such as SB-3524 attempts to lift the Conditional Use Permit (CUP) requirement for certain projects consistent with zoning, but the complexity of the entitlement processes may prevent this legislation from accomplishing what is needed in these five cities.
One such example is the myriad of specific plan approvals imposed on zoning compliant projects that happen to be located within a specific plan area.25 Though these approvals are functionally similar to CUPs, on paper they are different processes. San Jose provides another example. Most projects in San Jose go through the Planned Unit Development (PUD) process, which requires a rezoning and renders a project ineligible for SB-35. Yet the same PUD process in San Francisco and Oakland can occur without a rezoning. Even though the PUD process is accomplishing the same goals in these jurisdictions, the application is markedly different. Without knowledge of these nuances, lawmakers cannot draft legislation that accurately targets the problem and provides clear guidance to local stakeholders. Moreover, without an understanding of the distribution of non-zoning compliant projects entitled each year, lawmakers might find their legislative tools are not solving the right problems. Also, our data shows that local governments want to retain discretion over new development.
SB-35 may not be able to avoid cities downzoning or enacting more inflexible design criteria to force all approvals through a rezoning or variance process that is not subject to state streamlining. * Flexibility refers the degree to which developers must obtain relief from the zoning use and design controls to build their projects. The high occurrence of variances and CUPs in Oakland — both of which provide relief from design controls — are indicative of an inflexible code in that developers must frequently obtain relief from its requirements.
17 Agenda Item #5.1.
18 The risks of policymaking without access to data also implicate broader concerns than a simple housing production metric. The recently proposed SB-82726 targets all local land use discretion for certain kinds of infill development near transit. Though this is arguably the most effective approach to address the constraints that local land use regulation imposes on housing production, our data also highlights potential shortcomings. Here, we identify two. First, there is a potential impact on environmental protections. A significant number of projects are subject to CEQA processes that impose mitigation measures.* In some instances, this environmental review and mitigation process is much more than a formality. The classic example of this is the Mitigated Negative Declaration (MND) process. Jurisdictions like San Francisco and San Jose use tiering or community plan exemptions to impose project-level mitigations; this suggests that infill developments are having impacts on air, water, and traffic significant enough for jurisdictions to require mitigation. Unless there are environmental protections already embedded in local ordinances or state law to address the environmental impacts requiring these mitigations, eliminating discretionary review might allow for environmental impacts that these mitigations would have prevented. If discretionary review goes away, lawmakers should contemplate how to replicate these protections at a state level or mandate that local governments address these issues through non-discretionary local regulatory standards.
Second, there is a risk of harming the least empowered and most vulnerable within cities.
Eliminating discretionary review impacts community voice. Discretionary review typically requires a public hearing, which enables community participation. Existing research shows that updating the General Plan or enacting specific plans are costly endeavors typically funded from a city’s general fund.27 For jurisdictions that do not regularly engage in these macro-level planning processes, project-level approvals provide one of the few mechanisms for the community to participate in the development of their city. And even in jurisdictions that do use these planning processes, not all community members are equally empowered to participate in the planning process.
So long as issues of inequity in the planning process persist because some residents and neighborhoods have substantially more political power than others, any proposed reform that targets discretionary review without a clear focus on equity risks disproportionately harming vulnerable populations with the least amount of political power.
To be clear, our interview data suggests that contemplating equity in a proposed reform does not mean that retaining all current local discretion over development is the best path forward. Our interview data suggests that in some instances, taking away a measure of local control can offer a shield to local officials that have demonstrated a willingness to approve sustainable affordable housing development despite substantial pushback from affluent and powerful neighborhood groups unwilling to contemplate any development within their community. But not all of our five cities are situated similarly. They are diverse in not just in terms of population size, but in terms of land values, public resources, and demographics. Just as some cities cannot afford to engage community in the same way as others, some cities must pursue cost-sharing with developers to promote affordable housing development and infrastructure improvements. Thus, legal reform should not be blunt; it should be carefully tailored to address the imbalance of power that exists within cities and within the region (between cities).
* Mitigation is a feature of a proposed project design that reduces what would have been a significant environmental impact by avoiding, minimizing, or compensating for a potential adverse effect that would have otherwise created a significant environmental impact.
Agenda Item #5.1.
Agenda Item #5.1.
20 WHAT DO WE RECOMMEND
RIGHT NOW?
The value of improving access to good data cannot be overstated. Although top-down state reform of environmental regulations (or local regulation over land use) may encounter substantial difficulties, something the state could do now would be to provide guidance to jurisdictions on how to provide better access to accurate project-specific data on land use approvals, and require all jurisdictions to maintain relevant data in a central repository. Improving the quality of data and access to data would help researchers and policymakers identify how long these processes take, and identify inefficiencies and redundancies that exist in local processes. Being able to determine how long each process takes could in turn immediately help affordable housing developers determine what necessary funding is required for the entitlement process.
Each jurisdiction we studied readily provided any requested data to the extent they had it (without a public records request), and it was clear that each jurisdiction works to make data publicly accessible. Still, we discovered in our own research process that our findings are limited both by the availability and accuracy of data in the various planning databases of any given jurisdiction. In Oakland for example, some projects elect to go through a preapplication process prior to formally submitting their application for review, which could influence approval timelines.28
In other jurisdictions, the complexity of the planning process is not fully reflected in the data that is publicly accessible. San Francisco employs a streamlined application process that integrates processes that constitute distinct approval pathways in other jurisdictions, like design review and historic resources review. Just because there are no formal design review or historic resources approvals in San Francisco does not mean these processes are not happening. San Francisco’s various specific plan permits also combine what is essentially a CUP and variance process into one, which reduces the number of CUPs and variances in that jurisdiction. More projects are receiving variances than these numbers suggest. Jurisdictions like San Jose, on the other hand, employ very distinct approval processes, which also influences timeline. The majority of developments in San Jose go through the PUD process, which involves a rezoning and a permit approval that happen sequentially rather than in tandem. Our interviews suggest that often developers complete the rezoning and sell the land to a different developer who then secures the permit phase of the approval. The time lag between the two milestones might slightly exaggerate approval timelines in San Jose for PUD projects.
Though all our five cities make efforts to provide access to project approval data, this access could be greatly improved by providing the information in a centralized repository that uses consistent terminology across jurisdictions. To the extent that processes are so dissimilar that they cannot be analogized, this centralized repository should contain explanations. Smaller steps would also be welcome. Linking existing geographic information systems (GIS) or zoning data with assessor parcel information and building permit systems, for example, would be a great first step, particularly because housing element law at the time only required annual reporting based on building permits issued not numbers of units entitled. In our experience, it is not always easy to cross-check housing element reporting obligations with building entitlements because not everything that gets entitled is immediately built. Linking these systems to provide this data could make housing element reporting more robust.
Agenda Item #5.1.
21 1
Governor Brown Signs Comprehensive Legislative Package to Increase State’s Housing Supply and Affordability. (Sept. 29, 2017). Retrieved February 10, 2018, from https://www.gov.ca.gov/2017/09/29/news19979/. 2 Liam Dillon, Gov. Brown Just Signed 15 Housing Bills. Here’s How They’re Supposed to Help the Affordability Crisis, L.A. TIMES (Sep. 29, 2017), http://www. latimes.com/politics/la-pol-ca-housing-legislation-signed-20170929-htmlstory.html; Angela Hart, Jerry Brown Signs New California Affordable Housing Laws, SACRAMENTO BEE, (Sep. 29, 2017), http://www.sacbee.com/news/politics-government/capitol-alert/article176152771.html; Liam Dillon, The Housing Package Passed by California Lawmakers is the Biggest Thing They’ve Done in Years. But it Won’t Lower your Rent. L.A. TIMES, (Sep. 15, 2017), http:// www.latimes.com/politics/la-pol-ca-housing-legislation-deal-impact-20170915-story.html. 3 See Jennifer Hernandez, David Friedman & Stephanie Deherrera, In the Name of the Environment, Holland & Knight (2015); Carolina Reid & Hayley Raetz, Perspectives: Practitioners Weigh in on Driver of Rising Housing Construction Costs in San Francisco (2018).
For a contrary position, see Janet Smith-Heimer et al., CEQA in the 21ST Century, Rose Foundation for Communities and the Environment (2016).
For discussion, see Chang-Tai Hsieh & Enrico Moretti, How Local Housing Regulations Smother the U.S. Economy, N.Y. TIMES (Sep. 6, 2017), https://www. nytimes.com/2017/09/06/opinion/housing-regulations-us-economy.html; Liam Dillon, Which California Megaprojects Get Breaks from Complying with Environmental Law? Sometimes, it Depends on the Project, L.A. TIMES (Sep. 25, 2017), http://www.latimes.com/politics/la-pol-ca-enviromental-law-breaks20170925-story,amp.html; Angela Hart, Here’s Why California’s Historic Housing Legislation Won’t Bring Down Costs Anytime Soon, Sacramento Bee (Sep. 27, 2017), http://www.sacbee.com/news/politics-government/capitol-alert/article175541676.html. 4 See e.g., Edward L. Glaeser & Joseph Gyourko, The Impact of Zoning on Housing Affordability 17 (National Bureau of Economic Research Working Paper No. 8835, 2002); John Quigley, Steven Raphael & Larry A. Rosenthal, Measuring Land Use Regulations and Their Effects in the Housing Market, in Housing Markets and the Economy 282 (Lincoln Institute of Land and Policy ed., 2009). 5 Joseph Gyourko, Raven Molloy. Regulation and Housing Supply 13 (National Bureau of Economic Research Working Paper 20536, 2014). 6 Chas Alamo, Brian Uhler & Marianne O’Malley, California Legislative Analyst’s Office, California’s High Housing Costs: Causes and Consequences (2015).
7 Robert Yin, Case Study Research: Design and Methods (5 ed. 2014). 8 Malo Hutson, The Urban Struggle for Economic, Environmental and Social Justice: Deepining Their Roots (2016); Paul Knox & Linda McCarthy, Urbanization: An Introduction to Urban Geography (2012). 9 Peter Calthorpe, Urbanism in the Age of Climate Change (2010). 10 Chas Alamo, Brian Uhler & Marianne O’Malley, California Legislative Analyst’s Office, California’s High Housing Costs: Causes and Consequences (2015).
11 These ordinances include the San Francisco Planning Code, the Oakland Planning Code, the Redwood City Zoning Ordinance, the San Jose Zoning Ordinance, and the Palo Alto Zoning Ordinance.
12 Because residential development larger than 5 units in Palo Alto rarely occurs, our findings for this jurisdiction are based on an extremely limited sample size.
13 In some instances, individuals we interviewed worked in, or for, two or more of the cities within our group of five. 14 To be exempt from site development permit, single family homes must meet height, FAR, and lot size requirements and cannot be located in riparian areas. San Jose Municipal Code § 20.100.1030(A)-(C). 15 To qualify for design review exemption, the proposed development cannot be located in a conservation zone. Palo Alto Municipal Code §
18.76.020(b)(2)(D).
ENDNOTES
Agenda Item #5.1.
22 16 A city charter is the constitution for that local government. The provision of San Francisco’s charter rendering all permits discretionary can be found in the San Francisco Business and Tax Regulations Code § 26(a). 17 Although in many jurisdictions, Zoning Administrators and Planning Directors can allow the Planning Commission to issue variances for certain projects.
18 The MND/ND and EIR processes in Palo Alto only have one project each, so we are unsure of how representative these projects are generally of the process. The 180-unit EIR development, for example, which will provide faculty housing for Stanford as part of the larger Mayfield Development Agreement, is out of scale with the typical development pattern in Palo Alto. 19 Because many projects undergo more than one CEQA review type, we weighted units across the total number of CEQA review types. For example, a 100-unit project that received both a Community Plan Exemption (CPE) and an EIR was weighted 50 units in each category. 20 Some jurisdictions apply different types of CEQA review to a single project. A CPE in Oakland is often combined with a § 15332 exemption. EIRs in San Jose are often paired with later addendums or supplemental EIRs. A CPE in San Francisco can be paired with a Focused EIR. The numbers above do not control for these multiple types of CEQA review due to the small sample sizes that would result. Even controlling for types of CEQA review, the general trends holds true. Projects that only received a CPE in Oakland took 7 months; projects in San Francisco that only received a CPE still take 23 months; projects that only received an EIR in San Jose took 14 months. 21 Population data is from ACS 2016 5-Year Estimates.
22 See S.B. 375, 2007–08 Leg., Reg. Sess. (Cal. 2008).
23 See Jennifer Hernandez, David Friedman & Stephanie Deherrera, In the Name of the Environment, Holland & Knight (2015). 24 See S.B. 35, 2017–18 Leg., Reg. Sess. (Cal. 2018).
25 Examples of this include the Large Project Authorization in certain use districts of San Francisco’s Eastern Neighborhoods plan area or the Planned Community Permit in Redwood City’s Downtown Precise Plan. San Francisco Planning Code § 329; Redwood City Zoning Code § 47.1-47.5.
26 See S.B. 827, 2017–18 Leg., Reg. Sess. (Cal. 2018).
27 Robert B. Olshansky, The California Environmental Quality Act and Local Planning, 62 J. AM. PLAN. ASS’N 313, 319-320 (1996). 28 Oakland’s pre-application dates were not consistently available in the system. This means that what appears to be relatively fast approval times in Oakland might be influenced by these incomplete database entries. Similarly, in Oakland, some projects had the same approval date as initial application date. Where possible, we found the underlying approval documents to correct for this inaccuracy in the system. But the approval documents for three projects were unavailable, so we removed them from our data set, which slightly decreased the total unit and project numbers for Oakland.
Agenda Item #5.1.
Agenda Item #5.1.
IN THE NAME OF
THE ENVIRONMENT
How Litigation Abuse Under the California Environmental Quality Act Undermines California’s Environmental, Social Equity and Economic Priorities – and Proposed Reforms to Protect the Environment from CEQA Litigation Abuse Jennifer Hernandez, David Friedman and Stephanie DeHerrera | Holland & Knight Agenda Item #5.1.
Agenda Item #5.1.
IN THE NAME OF
THE ENVIRONMENT
How Litigation Abuse Under the California Environmental Quality Act Undermines California’s Environmental, Social Equity and Economic Priorities – and Proposed Reforms to Protect the Environment from CEQA Litigation Abuse
TABLE OF
CONTENTS
Preface ............................................................................................................................................................ 6 Dedication ....................................................................................................................................................... 7 Introduction ...................................................................................................................................................... 8 Part 1: CEQA Lawsuits in The Real World – The Numbers.................................................................................... 9 A. Politics 101: Half of all CEQA Lawsuits Target Taxpayer Projects – Not “Business”............................... 9 B. CEQA Lawsuits Overwhelming Target “Infill” Projects, Not “Sprawl”.................................................. 12 C. Everybody Files CEQA Lawsuits – for Any Reason ........................................................................... 19 D. CEQA Lawsuits Occur in All California Regions: More Lawsuits are Filed in Large Population Centers, but Major Projects are Challenged Everywhere.................................................. 29 E. More Thoroughly Studied Big, Well-Funded Projects Get Sued More Often Than Smaller, Less Well-Funded Projects............................................................................................................ 31 Agenda Item #5.1.
Part 2: CEQA Lawsuit Targets – The Stories Behind The Statistics...................................................................... 36 A. Public Agency Projects.................................................................................................................. 37
1. Schools, Colleges, and Workforce Training Projects .................................................................... 39
2. Other Public Service and Infrastructure Projects.......................................................................... 42
3. Park Projects............................................................................................................................ 46
4. Agency Plans and Regulations................................................................................................... 48
5. Water Projects.......................................................................................................................... 50
6. Energy Projects......................................................................................................................... 52 B. Private Sector and Commercial Projects ........................................................................................ 53
1. CEQA and Middle Class Jobs in Signature California Industries: Green Technology and Entertainment .................................................................................................................. 56
2. CEQA and Small Business ........................................................................................................ 60
3. CEQA and Housing ................................................................................................................... 62
4. Transit-Oriented Development: Hollywood and Beyond ............................................................... 64
5. Other Private Sector Projects .................................................................................................... 72 Part 3: Curtailing CEQA Litigation Abuse – Restoring CEQA’s Role of Assuring Public Transparency and Accountability for Avoiding and Mitigating Adverse Impacts to the Environment and Public Health............. 74 A. Media Reports of Widespread CEQA Litigation Abuse - and Calls for Meaningful CEQA Reform.......... 74 B. Elected Leadership Support for CEQA Reform ................................................................................ 77 C. Reforms to Preserve CEQA – Not CEQA Litigation Abuse.................................................................. 78
1. Require Transparency in CEQA Litigation to Prevent Non-Environmental Litigation Abuse .............. 78
2. Eliminate Duplicative CEQA Lawsuits: Enforce CEQA Once, Not 20+ Times................................... 79
3. Insufficiently Detailed Technical Studies Should Be Remedied with Corrected Studies – and More Mitigation and Public Review, If Warranted – Not Rescinded Project Approvals............... 80 D. How Previous Legislative CEQA “Reforms” Fell Short: A Short History of Unicorns, Whack-A-Mole, Buddy Bills, Sleight-of-Hand, and Political Panic ..................................................... 82 E. Help CEQA Work: Why Ending CEQA Litigation Abuse Helps Californians and the Environment .......... 87 Agenda Item #5.1.
Conclusion ..................................................................................................................................................... 89 List of Figures
Figure 1: CEQA Lawsuits Targeting Taxpayer-Funded and Privately-Funded Projects ............................. 10 Figure 2: CEQA Lawsuits Targeting Greenfield Versus Infill Projects ..................................................... 13 Figure 3: CEQA Lawsuits Targeting Infill Projects ................................................................................ 14 Figure 4: CEQA Lawsuits Targeting Infill Housing ................................................................................ 15 Figure 5: CEQA Lawsuits Targeting Greenfield Projects ....................................................................... 18 Figure 6: Types of Petitioners Filing CEQA Lawsuits ............................................................................ 23 Figure 7: Distribution of CEQA Lawsuits in California Regions ............................................................. 30 Figure 8: CEQA Compliance Tracks Targeted by CEQA Lawsuits .......................................................... 32 Figure 9: CEQA Petitions Targeting Taxpayer/Ratepayer Projects ......................................................... 38 Figure 10: CEQA Petitions Targeting Private Sector Projects ................................................................ 54 Figure 11: CEQA Petitions Challenging Residential (and Mixed Uses Including Residential) Projects ....... 62 Figure 12: More Than Two-Thirds of CEQA Residential Project Lawsuits Targeted Infill Development ..... 63 List of Graphs and Tables
Bar Graph 1: Percent Union Members in Construction Workforce in 1983 and 2014............................. 26 Bar Graph 2: Percent Decline in Rate of Private Construction Union Membership ................................. 26 Table A: Regional and State Employment Generated by Trade Through the Los Angeles and Long Beach Ports ............................................................................................................... 40 Table B: Bay Area Housing Construction Cost Comparison .................................................................. 68 Authors.......................................................................................................................................................... 90 Appendix A..................................................................................................................................................... 92 Endnotes...................................................................................................................................................... 123 Agenda Item #5.1.
This report analyzes all CEQA lawsuits filed in California over a three-year study period, 2010-2012, to describe how CEQA lawsuits are used in practice. The study demonstrates that about half of CEQA lawsuits target taxpayer-funded projects with no “business” or other private sector sponsor, and that the most frequent targets of CEQA lawsuits are projects designed to advance California’s environmental policy objectives.
Specifically, for CEQA lawsuits targeting construction projects, 80% of CEQA lawsuits target “infill” projects in established communities rather than “greenfield” projects on undeveloped or agricultural lands outside established communities. The most commonly targeted type of public infrastructure project was transit systems, the most commonly targeted type of industrial/utility project was renewable energy projects (primarily solar projects that were required to pay prevailing wages), and the most commonly targeted type of private sector project was infill housing (primarily higher-density, multifamily urban housing). The study also confirms that CEQA litigation abuse by parties seeking to advance non-environmental interests is widespread, and that duplicative CEQA lawsuits against implementation of the same project or plan can delay and derail projects, such as development of transit-served neighborhoods in urban areas, by decades.
CEQA litigation abuse has been decried by a broad range of public, private and non-profit groups – and by elected leaders and their staff.
CEQA has been singled out as one of the key causes of runaway housing prices (especially in coastal counties) and as a major reason California has fallen far behind other states in creating, retaining, and onshoring middle-class manufacturing jobs that have helped create a manufacturing renaissance in other states. As one of California’s signature “new economy” companies, Google, explained, its major fiber facilities would not be built in California, “in part because of the regulatory complexity here brought on by CEQA and other rules. Other states have equivalent processes in place to protect the environment without causing such harm to business processes and therefore create incentives for new services to be deployed there instead.” Ending CEQA litigation abuse is the most cost-effective “incentive” available to restore California’s jobs base, make housing more affordable, and meaningfully improve the future of the nearly nine million Californians that the U.S. Census Bureau reports are living in poverty.
The study recommends three reforms to curtail CEQA litigation abuse, and cites the precedent for each:
1. Extend CEQA transparency to CEQA lawsuits by requiring those filing lawsuits to disclose their identity and environmental (or non-environmental) interests. This transparency is already required in CEQA’s attorney fee motions and amicus filings.
2. Eliminate sequential, duplicative lawsuits aimed at derailing plans and projects for which an Environmental Impact Report (EIR) has already been certified and either was not challenged or was upheld in court. This CEQA compliance track already exists for implementation of specific plans and now-defunct redevelopment agency plans.
3. Preserve CEQA’s existing structure and access to litigation remedies for environmental purposes, but restrict judicial use of the extraordinary remedy of invalidating project approvals to projects that would cause a significant adverse threat to public health, irreplaceable tribal resources or ecological systems. This judicial remedy restriction was granted to the Kings Arena basketball project in Sacramento.
This study demonstrates that about half of CEQA
lawsuits target taxpayer-funded projects with no
“business” or other private sector sponsor, and
that the most frequent targets of CEQA lawsuits
are projects designed to advance California’s
environmental policy objectives.
PREFACE
6 | Copyright © 2015 Holland & Knight LLP All Rights Reserved Agenda Item #5.1.
This report is dedicated to the memory of Don Hernandez, Rosaleo Hernandez and Henry Rudloff, my father and grandfathers – members of the AFL-CIO and employees of U.S. Steel in the former industrial heartland of the San Francisco Bay Area.
My grandfathers moved from the fields of Mexico and Lodi to the factory in Pittsburg, California – a diverse community with too much pollution and plenty of middle-class jobs for all who were willing to work. Dad continued the family tradition of working at the steel mill until he was permanently laid off in 1985, at age 55, by a restructuring of the California economy that resulted in the loss of nearly one million manufacturing jobs. He spent the remainder of his working career at the near-minimum-wage retail job that became the new reality for Pittsburg’s many factory veterans.
Protecting the environment and public safety, supporting the diversity and upward mobility of Californians, and combating California’s social inequality with quality jobs and housing, remains a lifelong passion and urgent priority.
— Jennifer Hernandez, Age 55
Agenda Item #5.1.
8 | Copyright © 2015 Holland & Knight LLP All Rights Reserved This report analyzes all lawsuits alleging violations of the California Environmental Quality Act (CEQA) over a three-year study period:
2010-2012.1
Prior CEQA studies have focused on the much smaller fraction of CEQA lawsuits that actually result in a published appellate court decision on the substantive adequacy of an agency’s environmental evaluation of a project.2 This study period overlaps with the last three years of a companion CEQA Judicial Outcomes study of all published CEQA appellate court cases involving the substantive adequacy of CEQA compliance over a 15-year study period (1997-2012).3 A simple comparison of the number of CEQA lawsuits filed during this study period to the average number of CEQA lawsuits that result in published judicial opinions over the 15-year period of the companion study shows that only about 5% of CEQA lawsuits result in a published appellate or California Supreme Court decision. Although local media report on some of the 200-plus CEQA lawsuits filed annually, these lawsuits are not tracked systematically. This study presents the first comprehensive report of CEQA litigation in practice, and reveals the pattern of agency actions targeted by CEQA lawsuits for the entire body of CEQA petitions,4 including the 95% of CEQA lawsuits that do not result in published appellate court opinions.
The study confirms that CEQA litigation abuse is indeed widespread.
A variety of special interest groups use CEQA lawsuits throughout California to pursue non-environmental objectives, such as lawsuits targeting transit, renewable energy, transit-oriented housing and regulatory programs designed to achieve California’s ambitious environmental protection and climate change laws.
The study also demonstrates that CEQA litigation is overwhelmingly used in cities, with special-interest CEQA lawsuits targeting core urban services like parks, schools, libraries and even senior housing – most often by Not In My Backyard (NIMBY) opponents who conflate their individual “environment” (i.e., the view outside their bedroom
INTRODUCTION
Of greatest concern at a policy and political level, CEQA litigation abuse allows polite, passionate neighbors to oppose change – in the name of “the environment” – including the changes required to address environmental priorities such as climate change, and changes required to address California’s growing population, including people of different economic, ethnic, religious and other demographic characteristics than project opponents. window) with environmental policies and mandates that require acceptance of neighborhood-scale changes such as making more efficient use of existing park and school facilities for California’s growing (and diverse) population.
Of greatest concern at a policy and political level, CEQA litigation abuse allows polite, passionate neighbors to oppose change – in the name of “the environment” – including the changes required to address environmental priorities such as climate change, and changes required to address California’s growing population, including people of different economic, ethnic, religious and other demographic characteristics than project opponents. In cases involving opposition to projects like affordable housing, mosques and youth parks, the greatest social travesty of CEQA litigation abuse is the empowerment (and concealment) of bigots.
Part 1 describes the results of the study across several key factors:
what kinds of projects are targeted in CEQA lawsuits, where the targeted projects are located, what kinds of parties file CEQA lawsuits, and who bears the cost of CEQA lawsuits (and litigation preparation practices such as “overdoing” CEQA studies to reduce the potential for a lawsuit loss).
Part 2 presents the stories behind the statistics, and includes anecdotal information from published media reports and other sources about actual and threatened CEQA lawsuits to help illustrate the real-life effect of CEQA litigation abuse on housing, critically needed jobs, schools and workforce training, and on all manner of public infrastructure, from transit to libraries to renewable energy.5 Part 3 concludes with recommendations for three moderate CEQA statutory reforms to end egregious lawsuit abuse and return this great law to its mission: protecting the environment and public health, informing and involving the public, and assuring transparency and accountability for agency decisions that affect the environment.
Agenda Item #5.1.
Copyright © 2015 Holland & Knight LLP All Rights Reserved | 9 The framing of CEQA as a “business v. enviro” political debate is not supported by the data: half of CEQA lawsuits target agency projects for which there is no private sector applicant or developer.
This study is designed to provide comprehensive information about current CEQA litigation practices: what kinds of “projects” are targeted by CEQA lawsuits, how many of these lawsuits challenge “infill” projects in cities and other developed communities, what CEQA compliance tracks result in lawsuit challenges, and who files CEQA lawsuits. The aim is to inform policy discussions about the nature and extent of CEQA litigation abuse (use of CEQA for non-environmental purposes) – and inform equity and economic discussions about whether CEQA’s 1970 statutory framework for private-party litigation enforcement needs to be updated to align with California’s environmental priorities.
A. Politics 101: Half of All CEQA
Lawsuits Target Taxpayer Projects –
Not “Business”
Although the political debate around CEQA is persistently framed by many as a battle between “business” and “enviros” (environmental advocacy groups), as a legal matter, CEQA applies to all discretionary agency actions, including approvals of public construction projects, approvals of agency plans, policies, and fund allocations, and the approval of regulations and ordinances (including regulations and ordinances to reduce pollution or conserve open space). The framing of CEQA as a “business v. enviro” political debate is not supported by the data: half of CEQA lawsuits target agency projects for which there is no private sector sponsor at all,6 and many private sector projects – such as CEQA lawsuits targeting single-family home renovations7 – have no business sponsor either.
CEQA Challenges to Public Agency Projects
Public agency approvals to acquire or renovate parks, and build or modify all types of public facilities and infrastructure – ranging from small public service facilities like schools, fire stations and libraries to larger public infrastructure projects, such as transit systems and wastewater treatment plants – are all “projects” triggering the need for an Environmental Impact Report (EIR) or other CEQA document or determination, and all of these agency actions can be challenged in CEQA lawsuits.8
PART 1
CEQA LAWSUITS IN THE REAL WORLD – THE NUMBERS
CEQA Litigation: Degree of Adverse Effects Often
Ignored by Sacramento’s Leaders and Special Interests
Special interests and political leaders in Sacramento have grown comfortable with viewing CEQA through an “enviro v. business” prism. For example, State Senator Darrell Steinberg excluded public agencies responsible for implementing projects – and complying with CEQA – from negotiation sessions aimed at seeking common ground to modernize CEQA. Stung by their exclusion, the Public Works Coalition, a broad alliance of public agencies that collectively represents nearly every school, county and special district in California, unsuccessfully attempted to join the dialogue in a plea to legislative leaders, writing:
“It is widely recognized that many of CEQA’s key
requirements are fundamentally uncertain. No
matter how much time and how many resources
have been invested...a project opponent can craft
arguments as to why a lead agency failed to fully
comply with CEQA. As a result, it is very difficult
for lead agencies to effectively execute CEQA
decisions that can be upheld in court if they are
challenged.”
“What often compromises the virtues of CEQA are
individuals and groups with ulterior motives who
exploit CEQA’s uncertainties through litigation, or
the threat of litigation, to achieve objectives that
have nothing to do with environmental protection.”
“Each misuse and abuse of CEQA not only wastes
scarce public resources that would otherwise
fund essential public services, it also damages the
integrity of meaningful environmental protection.”
– Public Works Coalition letter, January 29, 2013
(Copy available on request from the
authors of this report.)
Agenda Item #5.1.
10 | Copyright © 2015 Holland & Knight LLP All Rights Reserved Residential
21%
Retail
10%
Commercial
5%
Entertainment
2%
Mining
5%
Agricultural &
Forestry
1%
Energy
4%
Agency Property
>1%
Agency Plans and
Regulations
15%
Water
7%
Other Public
Services &
Infrastructure
17%
Parks
4%
Schools
5%
Industrial
4%
CEQA also defines “project” to include agency actions that are mandatory under other federal and state laws. This includes developing and implementing plans and regulations covering many different topics. Again, these range from those that affect relatively large groups or areas such as General Plan updates that apply to a whole city or county, and greenhouse gas or other pollution reduction regulations that apply statewide, to agency actions that have a far smaller reach, such as a city ordinance limiting single-use plastic bags or requiring permits for marijuana dispensaries, or a city plan to improve housing affordability or focus development in areas served by existing or planned transit services.9
Agencies also manage property and facilities, and property management decisions that involve no physical modifications to existing facilities – such as converting an underutilized women’s prison to a men’s prison to relieve prison overcrowding,10 or outsourcing management of a city-owned property11 – are subject to CEQA, and during this study period were targeted by CEQA lawsuits.
As shown by Figure 1, about half – just over 49% – of CEQA lawsuits target agency actions for which there is no private sector proponent (business, non-profit or individual applicants seeking agency approval or funding).
Figure 1
CEQA Lawsuits Targeting Taxpayer-Funded and Privately-Funded Projects Public Agency/Taxpayer-Funded Projects Business/Individual Privately-Funded Projects Produced by: Hernandez, Friedman, DeHerrera
Copyright © 2015 Holland & Knight LLP All Rights Reserved Agenda Item #5.1.
Copyright © 2015 Holland & Knight LLP All Rights Reserved | 11 For the majority of CEQA lawsuits, CEQA’s
compliance costs, including litigation costs and
obligatory payment of attorneys’ fees, fall on
California taxpayers - not “business.”
For the half of all CEQA lawsuits targeting public agency projects, CEQA’s compliance costs and litigation risks, including payment of attorneys’ fees to parties successfully suing agencies, are borne by taxpayers.
If electricity generation projects (which during the study period included only new renewable energy facilities such as solar farms) and “repowered” existing electricity plants proposed to be modified to use cleaner new technologies to reduce air or water pollution12 are added to this public sector category based on the fact that California’s ratepayers must ultimately pay for these projects, just over 53% of CEQA’s lawsuits involve projects that are paid for by the same taxpayer-generated revenue pool of property taxes, sales taxes and other taxes and fees that are otherwise available to pay for schools, parks, libraries, public health and social services, law enforcement, fire and emergency services, road and infrastructure maintenance, and other public agency services and facilities.
Public infrastructure is the most frequent target of CEQA lawsuits, and within this category the most frequent litigation target is transit projects – the same projects that reduce per capita greenhouse gas emissions and other air pollutants by providing an alternative to automobiles (especially for commuters). Regional and global environmental benefits are achieved by transit improvements, but local neighborhood groups forced to accept new transit systems frequently do not support these improvements, and use CEQA lawsuits to try to stop, delay or modify transit infrastructure.
For the majority of CEQA lawsuits (public agency lawsuits plus ratepayer-funded electric generation), CEQA’s compliance costs, including litigation costs and obligatory payment of attorneys’ fees, fall on California taxpayers – not “business.” Agencies (and taxpayers) cannot recover litigation attorneys’ fees if agencies win CEQA lawsuits, nor can agencies (or taxpayers) block lawsuits filed by parties using CEQA for non-environmental purposes.
Agenda Item #5.1.
12 | Copyright © 2015 Holland & Knight LLP All Rights Reserved CEQA litigation overwhelmingly
targets “infill” development that
accommodates population and
economic growth that would otherwise
spill into undeveloped exurban areas.
Figure 1 also shows that the private-sector projects challenged in CEQA lawsuits are overwhelmingly non-polluting land uses that often raise intense localized concerns about increased population densities and resulting demands on public services and local roadways.
The largest single target of CEQA lawsuits against private projects are residential projects (21%), followed by retail projects (10%), commercial (non-industrial) projects (5%) and entertainment (2%) projects. The categories of projects with the greatest potential to cause pollution or adversely affect protected species – Industrial (4%), Agricultural/Forestry (1%), Mining (5%) and Renewable Energy/Energy Retrofit projects (4%) – comprise only 14% of all CEQA lawsuits filed during the study period.
B. CEQA Lawsuits Overwhelmingly
Target “Infill” Projects, Not “Sprawl”
Another common political assertion by the entrenched special interests that defend CEQA litigation’s status quo is that CEQA litigation mostly combats “sprawl” development that causes longer commutes, destroys farms and wildlands, and draws financial and human capital away from urban areas.
This study proves that the opposite is true: CEQA litigation overwhelmingly targets “infill” development that accommodates population and economic growth that would otherwise spill into undeveloped exurban areas. Of the cases that could be constructed in either “greenfield” rural or exurban locations, or “infill” locations in established communities,13 80% of CEQA lawsuits targeted “infill” projects, and only 20% targeted “greenfield” projects, as shown in Figure 2. It is noteworthy that at 80%, the number of CEQA lawsuit petitions filed against infill projects is higher than the 62% of infill projects addressed in reported appellate court cases.14 As a result, this study demonstrates that earlier studies that examined only reported appellate court cases substantially understated the extent to which CEQA lawsuits target infill projects.
Agenda Item #5.1.
Copyright © 2015 Holland & Knight LLP All Rights Reserved | 13 In ll - Public Service &
Infrastructure
22%
In ll - Residential
20%
In ll - Retail
13%
In ll - Schools
6%
In ll - Commercial
6%
In ll - Park
5%
In ll - Industrial
4%
In ll - Entertainment
2%
In ll - Energy
2%
Green eld - Public Service
& Infrastructure
1%
Green eld - Residential
9%
Green eld - Retail
1%
Green eld - Schools
1%
Green eld - Commercial
1%
Green eld - Park
2%
Green eld - Industrial
1%
Green eld -
Entertainment
>1%
Green eld - Energy
4%
“Infill” projects include private and public sector projects located entirely within one of California’s 482 cities,15 or located immediately adjacent to existing developed areas in an unincorporated county.
Projects located in county areas that are not immediately adjacent to existing development, even if they are adjacent to major infrastructure such as an interstate highway, are classified as “greenfield.”
Not every challenged agency project falls into either the “infill” or “greenfield” category. For example, many agency regulatory decisions –such as statewide greenhouse gas reduction regulations or county general plans governing both developed and less developed areas of a county,16 or water supply management projects that include physical modifications to water infrastructure that occur in a different location than the often-multiple locations where water will ultimately be delivered for consumption17– do not fit within this “infill/greenfield” paradigm. Similarly, although the majority of the 36 lawsuits challenging mining, agricultural, and forestry projects involved agency approvals regulating existing operations, and thus fell roughly within the “redevelopment” concept often associated with “infill” (e.g., approval of a mine reclamation plan for an existing mine), none of these inherently open-space projects that are located based on pre-existing natural characteristics such as mineral reserves, were categorized as either “infill” or “greenfield” projects.18 The location of all challenged private sector projects other than mining, agricultural and forestry projects was classified as “infill” or “greenfield.” Figure 2
CEQA Lawsuits Targeting Greenfield Versus Infill Projects (Select project types shown. See Tables 2B through 2D for all project types) Produced by: Hernandez, Friedman, DeHerrera
Copyright © 2015 Holland & Knight LLP All Rights Reserved Agenda Item #5.1.
14 | Copyright © 2015 Holland & Knight LLP All Rights Reserved Figure 3
CEQA Lawsuits Targeting Infill Projects
In ll - Public Service &
Infrastructure
28%
In ll - Residential
25%
In ll - Retail
16%
In ll - Schools
8%
In ll - Commercial
7%
In ll - Park
7%
In ll - Industrial
5%
In ll - Entertainment
2%
In ll - Energy
2%
Produced by: Hernandez, Friedman, DeHerrera
Copyright © 2015 Holland & Knight LLP All Rights Reserved Infill Lawsuits by the Numbers
Of the four-fifths of the study sample that were “infill” CEQA lawsuits, Figure 3 illustrates the fact that CEQA lawsuits most often targeted the public facilities and infrastructure that served these infill area populations – and public transit systems (which exclude roads and highways) were the top target of these CEQA infill infrastructure lawsuits.19 The second-most-likely infill target was housing. As shown in Figure 4, almost half (45%) of the lawsuits challenging infill residential projects were aimed at higher-density, transit-oriented attached units (e.g., apartments and condominiums).20 It is also noteworthy that over 6% of all infill CEQA lawsuit targets were urban park projects, ranging from trail improvements to accommodate disabled anecdotal visitors21 to playground and playfield improvements.22 (Further anecdotal information about these and other types of challenged projects is provided in Part 2 of this study).
Agenda Item #5.1.
Copyright © 2015 Holland & Knight LLP All Rights Reserved | 15 Multifamily/ Mixed Use
45%
Large Subdivision/
Mixed Use
16%
Single Family Home/
Second Unit
17%
Master Planned Community
12%
Small Subdivision
9%
Mobile Home
Conversion (Rent to Own)
1%
Impassioned infill project opponents are typically local residents who may in principle support many statewide environmental mandates that require fundamental changes to the character of California communities by prioritizing new development with higher densities (e.g., multi-story apartment or condominium projects) along transit corridors and promoting higher-density “mixed use” projects that include residential, retail services, and employment uses (e.g., offices) on the same property, but who adamantly oppose such changes in their own community. Such projects typically provide for less parking, and cause more traffic congestion, than traditionally lower-density development patterns like single-family detached homes or traditional shopping malls.
As has been observed by notable environmental advocacy groups such as the Natural Resources Defense Council and the California League of Conservation Voters, the environmental benefits of denser Produced by: Hernandez, Friedman, DeHerrera
Copyright © 2015 Holland & Knight LLP All Rights Reserved Figure 4
CEQA Lawsuits Targeting Infill Housing
development patterns are regional or even global (e.g., more transit use means lower air emissions including greenhouse gases), but these overarching environmental benefits are poorly suited to the structure of CEQA.23 In fact, localized traffic congestion can be a daily irritant to frustrated residents, and congestion can also result in higher localized air pollution levels such as diesel particulate matter.24
Agenda Item #5.1.
“CEQA discourse has become
increasingly abstract, almost
medieval in its scholasticism.
Nevertheless, if you apply common
sense and the practical experience
of processing land use applications,
you will conclude that what is at
stake in this case is not justiciable
environmental impacts but competing
visions of how to shape urban living.”
– Oakland Mayor
Jerry Brown (2005)
Then-Oakland Mayor (and now Governor) Jerry Brown
unsuccessfully urged the California Supreme Court to
Avoid Extending CEQA to Urban Design Disputes
In an unsuccessful plea to the California Supreme Court to reverse an appellate court decision allowing residents of single-family homes in a planned community to use CEQA to raise private “aesthetic impact” objections to block more affordable planned townhomes, in 2005 thenOakland Mayor Jerry Brown wrote:
“The appellate court decision incorrectly held that
neighbors’ aesthetic distaste for the city’s approved lot sizes, setbacks, street width, housing style, and other design matters constituted a potentially significantly effect on the environment, thereby requiring preparation of an EIR...” “Unless the [appellate court] decision is reversed, we are deeply concerned that our city’s elegant density policy of infill development will be undermined by long delays and expensive but useless analysis – analysis paralysis.”
“Since 2000, six separate EIRs have been prepared for
various of these [higher-density, transit-oriented residential] projects at a cost of millions of dollars and unconscionable delay.”
“[This] illustrates the profoundly negative impacts that the escalating misuse of CEQA is having on smart growth and infill housing” and “strikes at the heart of majoritarian democracy and long standing precedents requiring deference to city officials when they are interpreting their own land use rules.”
“The [appellate court] found aesthetically degrading the ‘excessive massing of housing with insufficient front, rear and side yard setbacks [citation omitted].’ Just as cogently, other people may well conclude that the close arrangement ... fostered a cozy, neighborly intimacy. The fact that narrow streets are unfriendly to speeding cars and that neighbors are thrust into close contact may well be viewed as a superior quality of living rather than a negative impact.”
“CEQA discourse has become increasingly abstract, almost medieval in its scholasticism. Nevertheless, if you apply common sense and the practical experience of processing land use applications, you will conclude that what is at stake in this case is not justiciable environmental impacts but competing visions of how to shape urban living.”
— Hon. J. Brown, amicus brief to the California Supreme Court in Pocket Protectors v. City of Sacramento (No. C046247) 2005.
The court declined to review or reverse the appellate court decision.
Mayor Brown then successfully sought a partial, time-limited CEQA exemption for Oakland’s urban projects. This is an example of the “one-off” special CEQA deals periodically cut by the Legislature as discussed in Part 3 of this report.
For NIMBY litigants opposed to higher-density development and other neighborhood-scale changes in their communities, CEQA statutes and case law provide many examples of the legitimacy of privatized “environmental” protection. Protection of an individual’s view, protection of an individual’s “quality of life” measured by convenient access to ample parking supplies, and the absence of any localized increases in ambient noise or traffic congestion, are all recognized as CEQA impacts. CEQA also does not create any ranking system for impacts: each significant impact is as significant as any other, and each warrants as much mitigation as is feasible, resulting in inevitable policy trade-offs that are then litigated by the losing side of the political debate. Policymakers may support transit and higherdensity development on transit corridors; residents may not, and if they lose at the policy level their next step is the courthouse, where they can allege dozens of technical study flaws in CEQA documents, and are likely to stop the approved project if even one study flaw is identified. (Part 3 includes a proposed reform of CEQA remedies for technical study flaws.)
Agenda Item #5.1.
Copyright © 2015 Holland & Knight LLP All Rights Reserved | 17 Other reasons petitioners challenge infill projects run the political (and policy) spectrum, and often have little or nothing to do with “the environment.” Anti-abortion protesters used a CEQA lawsuit in an attempt to block a planned parenthood clinic proposed to be located in an existing building in a neighborhood that already offered abortion services, asserting that the city violated CEQA by failing to appropriately consider the noise nuisance that the protesters would themselves create in the neighborhood if the clinic was allowed to open.25 Mosque projects were targeted by those not sharing the same religious orientation, and one case included a plaintiff calling itself a “patriot” group.26 Transitional housing for foster youth who “age out” of the traditional foster home programs on their 18th birthday,27 affordable housing28 and supportive senior housing29 were targeted with improbable assertions of increased traffic and parking congestion. In addition, concerns were reported about “those people” and “loitering youth,” and fears of “increased crime and vandalism,” that are more evocative of a hoped-for past era of civil rights abuses than the “modern” self-image of wealthy, liberal – and notoriously NIMBY – coastal communities.30
Greenfield Challenges
As shown in Figure 2, greenfield projects make up only 20% of the projects targeted by CEQA lawsuits.31 Figure 5 shows the distribution of CEQA lawsuits against different types of greenfield projects. Just under half of these involve residential projects, including primarily “master planned communities” which include a mix of retail, commercial and employment components, schools and parks, along with associated public services and infrastructure, and are typically located either at the edge of existing developed areas In addition, concerns were reported
about “those people” and “loitering
youth,” and fears of “increased
crime and vandalism,” that are more
evocative of a hoped-for past era of civil
rights abuses than the wealthy, liberal –
and notoriously NIMBY –
coastal communities.
already served by highways or other public infrastructure, or new or expanded resort projects. The second-largest category of greenfield development lawsuits targeted new renewable energy facilities, such as solar plants. Challenges to “greenfield” park projects like park trail construction or other projects designed to improve the visitor experience or increase visitation made up over 10% of the challenged greenfield projects; infrastructure and public service projects (e.g., a new high school in an unincorporated county community32) made up the remainder of the “greenfield” project category. More information about and examples of these projects are provided in Part 2 of this report.
Agenda Item #5.1.
18 | Copyright © 2015 Holland & Knight LLP All Rights Reserved Figure 5: CEQA Lawsuits Targeting Greenfield Projects
Green eld - Public Service &
Infrastructure
6%
Green eld - Residential
46%
Green eld - Retail
3%
Green eld - Schools
3%
Green eld - Commercial
5%
Green eld - Park
11%
Green eld - Industrial
6%
Green eld - Entertainment
1%
Green eld - Energy
19%
“Any party can file a CEQA lawsuit,
even if it has no environmental purpose.
For example, a competitor can file
a CEQA lawsuit to delay or derail a
competing project.”
Produced by: Hernandez, Friedman, DeHerrera
Copyright © 2015 Holland & Knight LLP All Rights Reserved Bottom Line: CEQA Litigation Overwhelmingly Targets Infill Projects
This study definitively shows that housing and other types of projects that could, in principle, be located in either a greenfield or infill location are four times more likely to be sued if they are located in an infill location.33 Notwithstanding the much higher CEQA litigation risk, the market continues to demand growth in California coastal counties. As a result, housing developers and agencies seeking to satisfy this market demand and comply with state mandates for higher-density, transit-oriented housing factor in CEQA compliance and litigation costs (and delays) when pricing projects. CEQA adds to housing costs. As the California Legislative Analyst recently reported, CEQA and other NIMBY opposition, as well as various regulatory and growth restrictions in coastal communities, have caused California’s for-sale and rental housing prices to be far higher – more than double the cost – of any other state in the nation.34
Agenda Item #5.1.
Copyright © 2015 Holland & Knight LLP All Rights Reserved | 19 NIMBY opposition to coastal county housing projects has steep costs.
Taking into account the cost of housing, the U.S. Census Bureau has confirmed that California has earned the dubious distinction of having the highest percentage, and by far the greatest number, of people living in poverty of any state.35
No one asserts that Coastal California’s excessive housing costs and supply shortfalls are all attributable to CEQA litigation abuse. That said, the fact is that CEQA litigation is a weapon most often fired at infill projects: the transit-oriented, higher-density, lower energy and lower water-consuming projects that myriad state policies have determined to be environmentally superior to rural “sprawl.” People who cannot afford to live in California’s coastal counties are then forced inland, where housing costs drop by half or more (e.g., Inland Empire housing costs are less than half of Orange County and Los Angeles housing costs),36 but require long workplace commutes, since more employment opportunities remain in coastal counties.
Those who cannot afford proximate urban housing are then the victims of more NIMBY opposition to transportation solutions, such as transit systems and HOV-lane additions to highways. With residents of inland counties paying far more for energy (e.g., for air conditioning in hotter climates) and more for gasoline (as a result of longer commutes, plus fuel surcharges such as the cap and trade-based greenhouse gas pricing increase that became effective in 2015), the “environmental” use of CEQA litigation against infill projects by NIMBYs disproportionately targets what was once the backbone core of the Democratic party: poor, working class and minority citizens.
The “environmental” use of CEQA
litigation against infill projects by
NIMBYs disproportionately targets
what was once the backbone core of
the Democratic party: poor, working
class and minority citizens.
C. Everybody Files CEQA Lawsuits –
for Any Reason
CEQA lawsuits have several unique attributes not shared by any other environmental statute in the United States:
• First, any party can file a CEQA lawsuit, even for a nonenvironmental purpose. For example, a competitor can file a CEQA lawsuit to delay or derail a competing project,37 and a labor union can file a CEQA lawsuit to secure an agreement that gives the union that filed the lawsuit control over which project jobs will be allocated among which unions.38
• Second, a CEQA lawsuit can be filed anonymously. Neither the public, the judge, the public agency defending the lawsuit, nor the private applicant for the 50% of the CEQA lawsuits that have a private applicant,39 are entitled to know who is suing them. They also are not entitled to know whether the lawyer who filed the CEQA lawsuit even has a client or is simply pursuing a “bounty hunter” claim for a quick (and typically confidential) financial settlement payoff. CEQA lawsuits also can be filed on behalf of a previously non-existent, unincorporated association with a sympathetic-sounding name (e.g., “Friends of Sustainable Neighborhoods”), provided that one member of the newly formed “association” filed any agency comment at any time prior to agency approval of the project. A lawsuit may allege any CEQA violation that was raised by any party at any time prior to agency approval, even if the objecting party agrees that the alleged deficiency was adequately addressed by the agency as part of the CEQA and project approval process.
Why should we continue to tolerate
litigation abuse of California’s
premier environmental statute to
block non-polluting infill projects?
Agenda Item #5.1.
20 | Copyright © 2015 Holland & Knight LLP All Rights Reserved The California Legislature has consistently declined to require disclosure of the identity and interest of those filing CEQA lawsuits. In late 2014, the California Judicial Council – which has independent authority to adopt court rules requiring disclosure – declined to extend its existing CEQA litigation disclosure rules (currently applicable to those filing “friend of court” amicus briefs in CEQA cases, and those seeking recovery of attorney fee awards in concluded CEQA lawsuits), to parties filing CEQA lawsuits.The Judicial Council concluded that requiring disclosure of CEQA litigants was a policy matter to be decided by the Legislature.40 As discussed in Part 3, the Legislature’s refusal to extend CEQA’s transparency mandate to those filing CEQA lawsuits provides a vivid illustration of how the special interests that use CEQA for nonenvironmental purposes exert their power in the legislative arena.
CEQA lawsuits are also relatively inexpensive: a case can be brought for the cost of a county court filing fee of a few hundred dollars. In addition, lawsuits require only preparation of a complaint or “petition” (which can allege very generalized deficiencies in an agency’s environmental documentation) and two briefs (an opening brief typically limited to 25 pages, and a reply brief typically limited to 10- 25 pages), with one court hearing in front of a judge typically lasting less than one day. The lawsuit is decided based on the content of the agency’s “administrative record,” the contents of which are prescribed by statute. The challenger is required to prepare or pay for preparation of the administrative record, but there is no prompt statutory remedy available if the challenger fails to timely prepare or pay for the cost of the record. Record preparation disputes can extend the time required to resolve a CEQA lawsuit for a year or longer.
The Legislature’s refusal to extend
CEQA’s transparency mandate to CEQA
lawsuits provides a vivid illustration of
how the special interests that use CEQA
for non-environmental purposes wield
power in the legislative arena.
CEQA lawsuits proceed through California’s three levels of judicial review: the trial court process can extend over two years, an automatic and mandatory right to appellate court review can require another one to two years, and a discretionary appeal to the California Supreme Court can take another year or longer. All litigation process times have been stressed by substantial budget cuts to the judiciary.
The simple act of filing a CEQA lawsuit, without seeking an injunction or awaiting any judicial remedy, vests the challenger with tremendous leverage. As documented in several recent CEQA studies of appellate court decisions:41
• In the published CEQA appellate court cases that comprise the body of jurisprudence available for determining the probable outcome of a CEQA lawsuit, challengers enjoy nearly 50/50 odds of winning.42
– Even if the agency completed an EIR – the most elaborate and costly form of CEQA document, which by statute is to be upheld if it is supported by “substantial evidence in the record” even if “substantial evidence in the record” also supports a contrary conclusion or decision – the plaintiff still prevailed 43% of the time. To put the remarkably
favorable odds of winning a CEQA lawsuit into perspective, in a meta-study of 11 administrative lawsuits nationally, including 5,081 federal court cases, agency challengers lost in 69% of the cases – and the Internal Revenue
Service, which is required by Congress to closely track and quickly address adverse court claims, loses only 22% of its cases.43
In the published CEQA appellate
court cases that comprise the
body of jurisprudence available for
determining the probable outcome
of a CEQA lawsuit, challengers enjoy
nearly 50/50 odds of winning.
Agenda Item #5.1.
Copyright © 2015 Holland & Knight LLP All Rights Reserved | 21 – For “Negative Declarations,” which are a less costly
and less time-consuming type of CEQA document,
the standard of judicial review is whether an opponent
has made a “fair argument” that a project “may” have
even a single adverse environmental impact. Negative
declarations fail to withstand judicial scrutiny in 56% of the cases.
• CEQA documents must now study in excess of 100 different “environmental” topics. For each topic, an agency must correctly address the “setting” and “baseline,” evaluate the project’s “impacts,” and identify “significance thresholds” for measuring whether an impact is indeed “significant” or “less than significant.” For each “significant” impact, an agency must then identify “feasible” mitigation measures to “avoid” or “reduce to a less than significant level” such impacts, correctly identify “reasonably foreseeable future projects or plans” in the “project vicinity” (which may result in a significant adverse “cumulative” impact – even for a project impact that has been mitigated to a less than significant level), identify and evaluate a “reasonable range” of “feasible” alternatives to a project that can attain “all or most” of the project’s “objectives,” explain its conclusions with “findings,” and then disclose “significant unavoidable impacts” for which no feasible mitigation measure or alternative is available. It is not enough under CEQA for a project to comply with a previously adopted plan for which an EIR has already been prepared, nor is it enough to demonstrate that a project complies with California’s famously strict environmental standards that govern everything from energy and water
efficiency to greenhouse gases and species protection.
• It is virtually impossible for lawyers engaged in CEQA litigation, and judges deciding CEQA cases, to avoid raising questions or concerns about whether an agency correctly completed all required components of the CEQA analytical process. It is also hard for judges, once they decide that an agency “did the air quality calculations incorrectly,” to conclude that the agency should not be required to repeat this or other analytical steps.
CEQA documents must now
study in excess of 100 different
“environmental” topics.
• The most likely remedy in the event the court rules that an agency has not completed the required level of analysis and processing is for a judge to vacate the agency’s project approval, and require more CEQA study. Vacating the project approval means, simply, that the project must be halted – as is – at the time when the decision is issued (absent special dispensation by a judge, such as weather-proofing by installing blue tarps on exposed plywood roofs) for the 2-4 years (or more) needed to repeat the agency CEQA process, and then return to court for a new trial court ruling and another round of appellate court review. In a recent case, a completed high-rise apartment project with tenants was served with a tenant eviction notice when a judge determined – years after the fact – that a historic resources study of a now-demolished former Spaghetti Factory restaurant fell short of what CEQA requires.44
• To address many conflicting CEQA appellate court decisions, as of May 2015, the California Supreme Court has 10 pending CEQA cases under review. These cases deal with a variety of issues with wide applicability throughout California. This includes the interplay between CEQA and California’s climate change laws and policies,45 the extent to which CEQA covers public safety services, and can require as “mitigation” staffing for police and fire services,46 the extent to which increased demand for transit is an “environmental” impact requiring mitigation,47 and the extent to which pre-existing environmental conditions (e.g., ambient levels of noise or odors or vehicle exhaust) should be evaluated under CEQA since these are environmental impacts on a project, rather than project impacts on the environment.48 Some of these cases have been pending for several years, and the California Supreme Court is under no hard deadline for reaching a final decision, either by ruling for or against the agency targeted by the CEQA lawsuit or by remanding the case back to the lower courts for further consideration.
• There is no limit to the number of times a project can be sued under CEQA: each discretionary approval by each agency can be the subject of a separate CEQA lawsuit. For example, more than 20 lawsuits have been filed over the past 30 years against an infill redevelopment project in Los Angeles, most of which involve alleged CEQA deficiencies,49 including two lawsuits filed during the 2010-2012 study period for this report.50
Agenda Item #5.1.
22 | Copyright © 2015 Holland & Knight LLP All Rights Reserved • A separate California “free speech” statutory prohibition – forbidding “strategic lawsuits against public participation” – prevents lawsuits from being filed against project opponents for any reason, such as tortious interference or even extortion.51 In the most notorious of the recent cases, a student housing company run by enterprising alumni from the University
of Southern California sought to control the student rental market by filing a CEQA lawsuit to block a project being built by a competing student housing developer. To gain further leverage, the housing company filed eight more CEQA lawsuits against the developer’s other California projects, and then filed two more lawsuits against projects by relatives of the developer under a statute similar to CEQA in Washington state. The targeted developer filed a federal civil racketeering lawsuit against the student entrepreneurs, who had by then repeatedly described themselves as the “Al-Qaeda of CEQA.” A federal judge declined to dismiss the federal lawsuit, and the entrepreneurs closed up shop.52
With these odds, these judicial remedies, these issues awaiting clarification from the Supreme Court, and these and other war stories, it should come as no surprise that banks making construction loans, and government agencies making time-sensitive grant and appropriations decisions, usually decline to fund projects while a CEQA lawsuit is pending. There is no bonding or other requirement that applies to project opponents who file CEQA lawsuits, project opponents are not required to pay attorneys’ fees if the agency ultimately wins the lawsuits, and project opponents are entitled to seek judicial approval of reimbursement of their attorneys’ fees and a “multiplier” or bonus amount for helping enforce an “environmental” law if they win even a partial victory on one environmental study topic regardless of whatever their real motivation is harming competitors, negotiating labor terms, derailing new environmental protections, or stopping “those people” from coming into a neighborhood.
Figure 6 presents our assessment of the types of parties (“petitioners”) filing CEQA lawsuits. Because some CEQA lawsuits include multiple types of petitioners (e.g., one or more individuals and one or more groups), the total number of petitioners is larger than the total number of lawsuits filed. If there were multiple entities of the same type (e.g., multiple individuals), then only the petitioner type (e.g., “individual”) was tallied. We created seven petitioner types: (1) individuals/families; (2) local/regional entities including unincorporated associations with sympathetic-sounding new names, but no readily-accessible track record of environmental litigation advocacy; (3) private companies such as competitors and trade associations; (4) other public agencies unhappy with the decision of the “lead” public agency that prepared the CEQA documentation; (5) Native American tribes; (6) labor unions; and (7) state and national environmental advocacy groups (e.g., the Sierra Club and Communities for a Better Environment).
It should come as no surprise that banks making
construction loans, and government agencies
making time-sensitive grant and appropriations
decisions, usually decline to fund projects while a
CEQA lawsuit is pending.
Agenda Item #5.1.
Copyright © 2015 Holland & Knight LLP All Rights Reserved | 23 Figure 6: Types of Petitioners Filing CEQA Lawsuits
Other Organization or
Association
45%
Individual/Family
19%
Labor Union
2%
Private Companies/Trade
Associations/ Competitors
8%
Agency
11%
Tribe
2%
Established Environmental
Advocacy Organization
13%
Produced by: Hernandez, Friedman, DeHerrera
Copyright © 2015 Holland & Knight LLP All Rights Reserved Agenda Item #5.1.
24 | Copyright © 2015 Holland & Knight LLP All Rights Reserved About two-thirds (64%) of the petitioners filing CEQA lawsuits are either individuals or “other” organizations or associations. Recognized state and national environmental advocacy groups, by contrast, comprise only 13% of the CEQA petitioners. These statistics are not surprising; environmental advocacy groups generally support the types of infill development, including transit systems and other urban services, that are the most frequent targets of CEQA lawsuits. CEQA litigation abuse is primarily the domain of NIMBYs and anonymous new unincorporated entities, including those using CEQA for nonenvironmental purposes.
One surprising outcome of the study (to the authors, at least), however, is the frequency with which agencies use CEQA to sue each other. Agencies comprise 11% of CEQA petitioners, and largely fall into two groups: agencies seeking more “mitigation” – physical improvements to roadways or other infrastructure, or fee payments – from the “lead” agency that prepared the CEQA document and approved the project, and agencies fighting the zero sum game of allocating (and paying for) California’s water resources. Although some tribal representatives have been active in CEQA reform discussions, tribes comprised only 2% of CEQA petitioners – and tribal projects were also the target of CEQA lawsuits.
Labor unions appeared as named parties in only 2% of CEQA petitions, business groups and competitors comprised 8% of the petitioner category, and inter-agency disputes accounted for 11% of petitioners.
Because the identity of those filing CEQA lawsuits is not required to be disclosed (a troubling exception to CEQA’s disclosure and transparency mandates and public purpose), the authors of this study called more than 100 of the public agencies that had been targeted by CEQA lawsuits to get further information from agency planning or attorney staff about the nature of the parties filing CEQA lawsuits.
From these interviews we learned the following:
CEQA litigation abuse is primarily
the domain of NIMBYs and
anonymous new unincorporated
entities, including those using CEQA
for non-environmental purposes.
• Business competitors. Private sector competitive abuse of CEQA often garners the strongest political criticisms, but is part of a systematic approach to advance competitive business objectives with unconventional tactics. In “Protecting Market Share: The Boundaries of Competitive Engagement,” a consulting group boasts that it is “the world leader in land use politics” and explains:
“The courts have sanctioned the right to organize
community opposition that urges government officials and agencies to deny land use permits to applicants, even
when the underlying motive of the opposition is protecting market share and eliminating competition. What’s more,
the courts are protecting third-party funding sources,
in many cases anonymous funding sources, which
support the opposition efforts in order to block potential competition.”53
Private sector competitive abuse is not limited to direct competitors (e.g., union versus non-union grocers or other competing retailers).
Sometimes economic competitors are simply fighting projects that could increase their operating costs or decrease their access to “free” public resources. For example, a surface strip mining company that depends on maintaining a very shallow groundwater level in a remote valley has filed a CEQA lawsuit against a water project that proposes to transport some of the water stored in the valley to urban users – which could affect mining operations.54 Private party disputes over water and other localized resources can result in contract claims and other lawsuits – but CEQA lawsuits to protect the commercial interests of miners strays far afield of CEQA’s environmental protection goals.
• Regulated party petitioners generally identified themselves in CEQA petitions. Regulated industries tended to file CEQA lawsuits in the name of a trade association, and used CEQA to try to delay or modify regulations by asserting that more elaborate environmental studies were required to accurately assess a regulation’s true environmental impacts (e.g., local agencies targeted by a trade group to block restrictions on the use of plastic bags),55 or to more thoroughly document the environmental tradeoffs in regulations that allegedly prioritized one policy objective over others (e.g., restrictions on the use of “once-through” water to cool power plants).56 One of the more interesting examples of this regulated party petitioner pattern were CEQA lawsuits filed against marijuana dispensary use permit ordinances, in which parties aligned with medical marijuana purveyors asserted that placing limits on the number of authorized dispensaries could drive up prices, thereby forcing people to either drive longer for less expensive pot (with resulting traffic, air pollution, and greenhouse gas emissions) or grow their own pot and thereby consume more water during drought conditions.57
Agenda Item #5.1.
• Construction trade unions were more likely to be identified in petitions than other trade unions, but unions filing CEQA lawsuits typically did not identify themselves as a union. Labor tends to use CEQA litigation (and litigation threats) to gain control of project job allocations and wages, but also uses CEQA in disputes with other labor unions. In the high percentage of renewable projects in the Southern California desert that were threatened or sued under CEQA, for example, two different labor petitioner groups – each affiliated with a different construction trade union – each filed their own CEQA lawsuit against the same project.58 This occurred in a reported dispute over which union would control the jobs created by these projects, and the competing unions used CEQA lawsuits in lieu of using the federal regulatory process for resolving territorial disputes.59 Labor CEQA lawsuits were filed even for jobs requiring payment of prevailing wages and other negotiated terms that are generally perceived as favorable by the community and policy stakeholders (e.g., agency approval conditions requiring hiring of local businesses or residents, small businesses, minorityowned businesses or women-owned businesses).60 Such union lawsuits reportedly sought to control job allocations to union members and allies. Agencies that declined to require Project Labor Agreements (PLAs) as conditions of project approval have been particular targets of these labor tactics, such as San Diego’s expansion of its convention center.61
• Non-construction unions are even less likely to be named in CEQA petitions, in part due to federal law restrictions on the manner in which such unions are allowed to use unconventional tactics (like CEQA lawsuits) to bargain over wage and working condition issues with their employers. By far the largest category of these cases involve CEQA challenges to non-union retailers, particularly Walmart.62 Lawsuits filed against Walmart and similar projects were all filed by “local” groups with environmentalsounding names, although union backing of such lawsuits was well known (and open union opposition to such projects was clear in the administrative agency approval process).63 Another noteworthy case involved a union lawsuit against the closure of a luxury clothing store, and the opening of a replacement store in a nearby city, in a reported bid to avoid the need to organize a union and enroll employees at the new store.64
Labor tends to use CEQA litigation
(and litigation threats) to gain control
of project job allocations and wages,
but also uses CEQA in disputes with
other labor unions.
CEQA Helped Assure that the U.S. Manufacturing
Resurgence Bypassed California
As commenter Richard Rider recently observed:
“So, CEQA saves California?? Guess the other 49
states are cesspools of pollution and filth. Surely
they envy us our protections.”
“Well, the other states DO like CEQA. After all,
California is the engine of prosperity – for the other
49 states.”
“FACT: From 2007 through 2010, 10,763 industrial
facilities were built or expanded across the country
– but only 176 of those were in CA. So with roughly
12% of the nation’s population, CA got 1.6% of
the built or expanded industrial facilities. Stated
differently, adjusted for population, the other 49
states averaged 8.4 times more manufacturing
growth than did California.”
— Richard Rider, comment on Voice of San Diego article, “The Great Uncertainty Facing California Businesses”
(comment posted December 21, 2014), available at
http://www.cmta.net/20110303mfgFacilities07to10.pdfProsperity (accessed May 28, 2015).
Agenda Item #5.1.
60.0 40.0
50.0 30.0 1983
2014
20.0 10.0
0.0 California USA (all states) New York New Jersey Illinois Bar Graph 1: Percent Union Members in Construction Workforce in 1983 and 2014 Decline 1983 - 2014
0%
-10%
-20%
-30%
-40%
-50%
-60%
-70%
California USA (all states) New York New Jersey Illinois Bar Graph 2: Percent Decline in Rate of Private Construction Union Membership 1983-2012
Produced by: Hernandez, Friedman, DeHerrera Copyright © 2015 Holland & Knight LLP All Rights Reserved Produced by: Hernandez, Friedman, DeHerrera Copyright © 2015 Holland & Knight LLP All Rights Reserved It is noteworthy that CEQA lawsuits do not appear to have materially affected California’s workforce participation in private labor unions, based on available national data.
Source: www.unionstats.com is an Internet data resource providing private and public sector labor union membership, coverage and density estimates compiled from the monthly household Current Population Survey (CPS). Economy-wide estimates are provided beginning in 1973; estimates by state, detailed industry and detailed occupation begin in 1983; and estimates by metropolitan area begin in 1986. The Union Membership and Coverage Database, constructed by Barry Hirsch (Andrew Young School of Policy Studies, Georgia State University) and David Macpherson (Department of Economics, Trinity University), was created in 2002 and is updated annually. 26 | Copyright © 2015 Holland & Knight LLP All Rights Reserved There is no evidence that California
construction trade use of CEQA lawsuits
(and lawsuit threats) is materially helping
increase union membership in construction
trades. As shown in Bar Graph 1, California
construction trades have a higher rate
of union membership than the national
average. However, California construction
trades also have a lower membership rate
than other blue state flagships such as
New York, New Jersey, Massachusetts and
Illinois as measured over a multi-year period
ending in 2014. Bar Graph 2 shows that
California’s construction unions have suffered
a higher percentage decline in construction
trade union membership relative to other
states during the same period. California’s
construction union membership picked up
slightly between 2012 and 2014, but still lags
behind 24 other blue and purple states such
as Illinois, New York, Indiana, Hawaii, Ohio,
Pennsylvania and Wisconsin.
Job loss from NIMBY use of CEQA lawsuits
(and CEQA lawsuits more generally) – which
affects prevailing wage jobs, and both
construction and non-construction unions
– has been documented by various studies.
One such analysis was prepared by the noted
Southern California economist John Husing.
It evaluated seven projects targeted by
CEQA lawsuits and concluded that from just
these projects, 3,245 prevailing wage jobs,
paying workers an average annual wage of
$100,502, were delayed or eliminated on an
annual basis. The total affected annual lost
wages and benefits was $326.1 million.
— Barry T. Hirsch and David Macphearson,
Current Population Survey (CPS Outcoming
Rotation Group (ORG) Earnings File (2015)),
available at http://unionstats.gsu.edu/
State%20U_1983.xls and
http://unionstats.gsu.edu/State_U_2012.xlsx
(accessed April 30, 2014); John Husing,
CEQA Working Group, “Misuse of CEQA and
Prevailing Wage Workers” (September 12,
2013), available at http://ceqaworkinggroup.
com/wp-content/uploads/2013/09/FinalHusing-Report.pdf (accessed May 28, 2015).
Agenda Item #5.1.
Copyright © 2015 Holland & Knight LLP All Rights Reserved | 27 Some union lawsuits represent distinct trade-offs between construction and operating unions, highlighted in an agency appeal dispute regarding union participation in a new transit car manufacturing facility in Los Angeles.65 For various reasons, including California’s consistently poor business rankings (generally attributed to high regulatory hurdles, CEQA litigation uncertainty, and other tactics), the post-recession resurgence of middle-class manufacturing jobs in the United States has largely bypassed California.66 A CEQA challenge to the new construction of one of the very few new manufacturing facilities proposed to be located in Los Angeles in many years – for the manufacture of transit cars paid for by Los Angeles taxpayers – was derailed by a union that filed a CEQA appeal seeking a “card check” agreement with the manufacturer. (“Card check” is an expedited process for enrolling employees in a union and bypassing the ordinary union election process.) The manufacturer initially declined to accept the “card check” procedure, and announced that it would relocate the plant outside California, at which point political intervention resulted in a compromise that created fewer prevailing wage construction jobs – the new manufacturing facility would not be built – but delivered the “card check” outcome sought by the union litigant. The press reported that there were no environmental benefits included in the negotiated outcome.67 It is noteworthy that this example did not result in an actual CEQA lawsuit being filed, since a political compromise occurred at the agency approval level.
NIMBYs comprised by far the largest number of project
opponents, particularly for infill projects. NIMBY opponents were often characterized as “older” or “wealthier” or “less ethnically diverse” than the part of the population that would benefit from the challenged project, particularly for urban schools, parks, and multifamily housing projects.
• NIMBYs. Notwithstanding the more frequently reported nonenvironmental use of CEQA by unions and business competitors, NIMBYs comprised by far the largest number of project
opponents, particularly for infill projects. NIMBY opponents were often characterized as “older” or “wealthier” or “less ethnically diverse” than the part of the population that would benefit from the challenged project, particularly for urban schools, parks, and multifamily housing projects. As a noted land use expert has observed, “[t]he people who are most apt to fight things have six-figure incomes and nice houses and college and post-college degrees.”68 NIMBYs and their advocates are often personally impassioned about protecting “their” environment, defining the “environment” as their local community. In fact, one of their advocates has waged an unsuccessful campaign to banish the term “NIMBY” from public use, calling it the “N-word” of CEQA.” • “Greenmail” and “Bounty Hunter Lawyers.” Numerous
lawsuits filed by entities with community-sounding names were attributed to lawyers that used CEQA to extract monetary, non-environmental, confidential settlements from agency and/ or private project sponsors. Several media stories have named two lawyers, including a Southern California lawyer who filed the largest number of CEQA lawsuits during the study period, as engaging in “greenmail” – using environmental laws to extract monetary settlements for private gain. There are also reported allegations of widespread violations of state and federal tax laws by dozens of the non-profit CEQA petitioners organizations formed by, and sharing the same address, relatives and colleagues of, the lawyer filing the highest number of CEQA lawsuits during the study period.69
Agenda Item #5.1.
28 | Copyright © 2015 Holland & Knight LLP All Rights Reserved • Other Community Groups. During interviews, there were no reports of non-environmental community advocacy groups
(e.g. poverty advocates) filing CEQA lawsuits to leverage nonenvironmental settlement terms. There were community groups deeply concerned about localized environmental conditions, and there were “Community Benefit Agreements” as well as “Development Agreements” negotiated typically as part of the political process with agency staff and elected leaders. These agreements included providing non-environmental benefits, such as prioritizing local residents in hiring or providing affordable housing, contributing to local job training or educational programs, and supporting the arts and other activities.70 These and similar community agreements known to the authors emerged as a result of political advocacy and organizing efforts rather than CEQA lawsuits.
• National and Regional Environmental Organizations. About 13% of CEQA lawsuits included as named petitioners established statewide environmental advocacy groups such as Communities for a Better Environment and the Center for Biological Diversity, and established regional environmental advocacy groups such as Endangered Habitats League. These lawsuits were more likely to target greenfields projects, projects or plans involving highway or industrial plant expansions, and state regulatory programs involving pollution control or resource extraction. Some local chapters of major organizations (e.g., the Sierra Club and Audubon Society) also field CEQA lawsuits, and generally pursued the same agenda CEQA lawsuits are filed by businesses seeking to derail competitors, labor unions wanting to control the allocation of jobs, NIMBYs opposed to neighborhood-scale change even when limited to the repair of existing houses or occupancy of existing buildings, and lawyers who collect substantial, confidential monetary settlements without ever identifying their clients. Collectively, these paint a troublesome picture of undesirable, and abusive, civil lawsuits clogging California’s overburdened and underfunded judiciary. as the established environmental groups that did not operate with a chapter structure. If CEQA’s standing requirements (the right to file a lawsuit to enforce CEQA) was modified to be in alignment with its parent federal statute, the National Environmental Policy Act (NEPA), these environmental advocacy groups would continue to have full access to judicial review and enforcement of CEQA – and the projects these groups target tend to have a much larger environmental footprint than the infill spats that currently dominate the judiciary’s CEQA litigation caseload.
• California Tribes appeared in only about 2% of CEQA cases and were more likely to participate in lawsuits with multiple petitioners including established state and national environmental organizations. Tribal projects were also targeted by CEQA lawsuits. (It is noteworthy that the study period pre-dated the January 2013 effective date of Assembly Bill 52 (Gatto), which expands CEQA requirements relating to tribal consultation and mitigation.) CEQA lawsuits filed by businesses seeking to derail competitors, labor unions wanting to control the allocation of jobs, NIMBYs opposed to neighborhood-scale change even when limited to the repair of existing houses or occupancy of existing buildings, and lawyers who collect substantial, confidential monetary settlements without ever identifying their clients – collectively, these paint a troublesome picture of undesirable, and abusive, civil lawsuits clogging California’s overburdened and underfunded judiciary.
Agenda Item #5.1.
Copyright © 2015 Holland & Knight LLP All Rights Reserved | 29 What’s most shocking, however, is that these abusive litigation tactics are being undertaken in the name of “the environment” – when in fact the environment, jobs, affordable housing, public parks, and a broad range of other important social and political priorities are derailed, delayed, or made far more costly by CEQA litigation abuse.
As many commenters have noted, a powerful political alliance between labor and environmental advocacy groups has prevented CEQA lawsuit abuse reforms.
The editorial board of the San Francisco Chronicle recently summarized succinctly the challenge of CEQA reform:71
“The problem: The 40-year-old California Environmental
Quality Act is vulnerable to exploitation from interests whose motivations have nothing to do with protecting resources.
Lawsuits have been filed by labor unions as leverage for organizing and even by business competitors.
The solution: The law needs to be reformed to provide
greater transparency on who is actually bringing a lawsuit, along with faster legal review and tighter guidelines on the basis for litigation.
Who’s in the way: Environmental and labor groups are
adamantly opposed to substantive reforms.”
D. CEQA Lawsuits Occur in All
California Regions: More Lawsuits
are Filed in Large Population
Centers, but Major Projects are
Challenged Everywhere
California’s population is the largest and among the most diverse in the country. California is the third-largest state, and its communities are distributed among exceptionally diverse topographic and climatic zones. Despite this diversity, however, the need for CEQA reform was identified as a top priority in all 14 regional conferences sponsored by the California Economic Summit, a partnership between California Forward (a non-partisan, non-profit organization working to identify common sense steps Californians can take to make government work) and the California Stewardship Network (a civic effort to develop regional solutions to the state’s most pressing economic, environmental, and community challenges).72 One conclusion from the first summit:
The need for CEQA reform was
identified as a top priority in all 14
regional conferences sponsored by
the California Economic Summit, a
partnership between California Forward
and the California Stewardship Network.
Agenda Item #5.1.
30 | Copyright © 2015 Holland & Knight LLP All Rights Reserved While the California Environmental Quality Act (CEQA)
has strong benefits to ecosystems, public health, and
environmental quality, the CEQA process has been misused, often substantially increasing costs of projects and delaying both private sector job-creating investments and critical public-works projects important to competitiveness and
public safety.73
Each region weighed in with its own tales of CEQA litigation abuse, such as “document dumping” tactics used to derail project approvals by parties who ignored what was often a multi-year public review and comment process, greenmail lawsuits by bounty-hunter lawyers, and NIMBY lawsuits over a single-family home on an existing lot in an existing neighborhood.
Consensus CEQA modernization recommendations from this
extraordinary collection of regional leaders from government agencies, environmental organizations, businesses, educators and other key stakeholders include:
• Increase transparency and reduce uncertainty in the CEQA administrative and litigation processes.
• Eliminate non-environmental uses of the statute (e.g., thwarting competition, NIMBY challenges to change, leveraging nonenvironmental monetary benefits and “greenmail”). • Refocus CEQA administrative and litigation processes to improve environmental outcomes.
• Avoid duplicative CEQA review processes.
• Focus CEQA modernization on “3E” outcomes – those that will improve the quality of California’s environment, economic competitiveness and community equity.74
This study demonstrates how widespread CEQA litigation has become throughout the state. Figure 7 shows the distribution of the CEQA lawsuits filed during the study period in California’s major regions.
Figure 7: Distribution of CEQA Lawsuits in California Regions Map Region Petitions
Los Angeles & Inland Empire 33%
San Francisco Bay Area 22%
San Joaquin Valley 13%
San Diego 10%
Sacramento Area 8%
Central Coast 6%
Northern California 5%
Sierra Foothills 2%
Mojave Desert 1%
Produced by: Hernandez, Friedman, DeHerrera
Copyright © 2015 Holland & Knight LLP All Rights Reserved Agenda Item #5.1.
Copyright © 2015 Holland & Knight LLP All Rights Reserved | 31 E. More Thoroughly Studied Big, WellFunded Projects Get Sued More Often Than Smaller, Less WellFunded Projects
During CEQA reform debates, defenders of the CEQA litigation status quo have cited the thousands of agency decisions made in larger jurisdictions, such as Los Angeles and San Francisco, and the comparatively small number of CEQA lawsuits filed in those cities.75 The overwhelming majority of CEQA compliance documents, however, involve the use of restricted regulatory exemptions for extremely minor projects,76 such as repairing single family homes,77 acquiring park lands,78 making minor modifications to existing uses such as modifying signage or repairing piping or other infrastructure, etc.79 Figure 8 shows the categories of CEQA compliance documentation tracks that are challenged in CEQA lawsuits.
Because CEQA applies to “discretionary” project
approvals, and because many cities require such
approvals for even very minor activities, CEQA applies
to hundreds of thousands of agency decisions that are
of zero interest, and zero visibility, beyond the permit applicant and the city staffer at the building counter.
As background, because CEQA applies to “discretionary” project approvals, and because many cities require such “discretionary” approvals for even very minor activities (e.g., building a deck in the backyard of a single-family home,80 or opening a retail store, restaurant or even medical clinic in an existing building81), CEQA does indeed apply to hundreds of thousands of agency decisions that are of zero interest, and zero visibility, beyond the permit applicant and the city staffer at the building counter. In the most extreme example, by its charter all permits issued in San Francisco are considered “discretionary” and trigger CEQA review.
CEQA also has more than 30 regulatory “exemptions” for projects that do not typically result in any significant environmental impacts; statutory exemptions for politically-connected projects (e.g., stadiums and prisons); exemptions for practically imperative actions that could collapse under the financial, scheduling and litigation risk costs inherent in CEQA (e.g., bus stop locations and fares, groundwater management regimes); and a “common sense” exemption from CEQA reflected in the statute and case law (e.g., whether a public agency buys Coke or Pepsi for its vending machines – even if selecting one product will require longer truck trips and cause more air pollution than another).
Agenda Item #5.1.
32 | Copyright © 2015 Holland & Knight LLP All Rights Reserved Figure 8: CEQA Compliance Tracks Targeted by CEQA Lawsuits Environmental Impact
Reports
52%
CEQA Not Applicable
7%
Categorical Exemptions
12%
Statutory Exemptions
5%
Certi ed Regulatory
Program (Substitute
CEQA Documents)
1%
Negative Declarations
23%
The study shows that larger projects for which full EIRs are prepared, and the far more detailed environmental studies included in EIRs, get sued much more often than smaller projects that qualify for CEQA exemptions or are processed with a shorter-form “Negative Declaration.” Unfortunately, larger projects and EIRs are the norm for the kinds of transformational projects that California’s environmental policy mandates and diverse, growing population demand, such as utility-scale solar and wind facilities, transit systems, modifications of city and county land use plans to provide for higher-density and transit-oriented development, and larger-scale urban housing and employment projects that implement such higher-density land use plans. The cost of an EIR can exceed
$1 million and require more than a year to complete, presenting a daunting economic hurdle for all but the most well-funded projects.
Smaller and much more leanly funded projects, such as park trail renovations and the adaptive reuse and remodeling of existing structures (which also generally include building code upgrades to improve public safety and implement “green” state mandates like water- and energy-conservation fixtures), can spend in excess of $50,000 on less costly alternatives to EIRS such as Negative Declarations, but are also easier to topple with threatened or actual CEQA lawsuits that would cost hundreds of thousands of dollars in legal fees and project delay costs, e.g., loss of grants, bank loans and other funding sources.
Produced by: Hernandez, Friedman, DeHerrera
Copyright © 2015 Holland & Knight LLP All Rights Reserved Agenda Item #5.1.
Copyright © 2015 Holland & Knight LLP All Rights Reserved | 33 CEQA lawsuits can delay, but typically do not derail, really “big” projects with ample financial resources. On the other hand, CEQA lawsuits can stop “small” projects supported by poorly funded agencies (e.g., parks and schools), non-profits (e.g., workforce training and affordable housing), small businesses (e.g., restaurant and auto repair shops) and individuals (e.g., owners of small businesses and single-family homes). The act of simply filing a CEQA lawsuit can kill the most environmentally benign small project, while the destinies of big projects are controlled by the financial appetite The act of simply filing a CEQA lawsuit can kill the most environmentally benign small project, while the destinies of big projects are controlled by the financial appetite of combatants willing to continue writing checks totaling
millions of dollars to the legions of by-the-hour consultants and attorneys in the “CEQA industry.”
of combatants willing to continue writing checks totaling millions of dollars to the legions of by-the-hour consultants and attorneys in the “CEQA industry.”
• Environmental Impact Reports (EIRs) are the most elaborate and costly CEQA compliance track, and are required for projects that may cause one or more significant adverse impacts, unless the project qualifies for a statutory or regulatory exemption, or falls within the jurisdiction of an agency that has approval to manage its own version of a CEQA process. There are different types of EIRs, Agenda Item #5.1.