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On March 31, six Bay Area counties—Alameda, Contra Costa, Marin, San Francisco, San Mateo, and Santa Clara—jointly issued new shelter-in-place restrictions that expand, clarify, and extend certain restrictions until May 3, 2020. Previous county orders issued on March 16 allowed almost all Bay Area housing construction to continue, as well as certain other construction projects (as did Governor Gavin Newsom’s March 19 safer-at-home order, which applies statewide). The new orders, however, allow only construction for essential infrastructure, healthcare projects directly related to addressing the COVID-19 pandemic, housing and mixed-use projects that include at least 10% income-restricted affordable housing, projects required to maintain safety, sanitation, and habitability of residences and commercial buildings, and construction necessary to secure an existing construction site that must shut down. Our complete report on the new orders, by Cecily T. Barclay, Marie A. Cooper and Auria Maleksalehi is available here.

The coronavirus (COVID-19) is placing businesses in situations where facilities have to be shut down, staff are sent home, laboratories that test monthly samples are temporarily closed, and contractors who normally conduct sampling or testing are not available. These circumstances create challenges for environmental regulatory/permit compliance. An update highlighting various ways that COVID-19 can adversely affect a facility’s environmental compliance and outlining steps that can be taken to address these issues, by Christopher (Chris) W. Rich, Sloane A. Wildman, Jeffrey (Jeff) L. Hunter, and Christopher (Chris) J. Sutton is available here.

As the widespread economic impacts of the coronavirus (COVID-19) worsen, Governor Gavin Newsom has issued Executive Order N-28-20 to assist Californians experiencing financial hardship. The order implements measures specifically aimed at helping homeowners, tenants, borrowers and others that have lost their source of income due to business closures or layoffs in the wake of COVID-19. It includes removal of statutory restrictions in order to allow local governments to impose eviction restrictions, including a suspension on residential or commercial evictions, for tenants unable to pay their rent because of COVID-19. Our update on the Executive Order, by Allan E. Low, Anne Li and Rachael Rutkowski is available here.

As the coronavirus (COVID-19) continues to spread, rapidly evolving economic and social changes are presenting a host of legal issues for the real estate industry. Attorneys at Perkins Coie, LLP, have published guidance on some of the more pressing issues affecting developers, landlords, tenants, and lenders. The guidance, prepared by Cecily T. Barclay, Allan E. Low, Camarin E.B. Madigan, Anne Li, Rachael Rutkowski and Shaun K. Devereaux  is available here.

Attorney’s fees could not be recovered in a CEQA action in which plaintiff obtained an initial stay of the project but the applicant later had the project approvals rescinded, citing inability to afford to litigate the case. Canyon Crest Conservancy v. County of Los Angeles, No. B290379 (2nd Dist., March 12, 2020).

Doron Kuhn sought to build a single-family residence on an undeveloped lot in Los Angeles County.  Because the property was located on a steep hillside and construction would require removal of a protected coastal oak tree, Kuhn obtained a minor conditional use permit and an oak tree permit from the county. Plaintiff, Canyon Crest Conservancy, an organization formed by two of Kuhn’s neighbors, challenged the approvals alleging violations of CEQA.

After the trial court issued a stay of the permit approvals to preserve the status quo, Kuhn (who had been self-represented throughout the litigation) asked the County to vacate the permit approvals, stating he could not afford to continue the litigation. The County complied and plaintiff dismissed the case. Plaintiff then filed a motion for attorney fees under the private attorney general doctrine, Code of Civil Procedure section 1021.5. The trial court denied the motion, concluding that plaintiff failed to establish any of the requirements for a right to fees under the statute.

To obtain fees under section 1021.5, the moving party must establish that the action resulted in the enforcement of an important right affecting the public interest and that the action conferred a significant benefit on the public or a large class of persons.

On appeal, plaintiff argued it was successful “in ensuring that the project was not built without adequate CEQA review,” and that its success was “sufficient to satisfy the ‘important right’ requirement.” The appellate court disagreed, citing the lack of evidence that the County would conduct any additional review or change its approach should Kuhn reapply for the project. On the contrary, the evidence suggested that the County felt Kuhn had acted properly in proposing and evaluating the project and rescinded the approvals only because Kuhn requested it. The court rejected plaintiff’s suggestion that bringing a “viable CEQA claim” alone was sufficient to satisfy the important-right component, noting the statutory requirement that a party not only allege an important right but actually vindicate that right by way of the litigation.

The court also disagreed with plaintiff’s assertion that the granting of the stay resulted in a benefit to the general public — the second key statutory requirement. The court held that the stay ruling was not an adjudication on the merits and, although plaintiff raised a number of challenges to the environmental analysis, the lawsuit was dismissed without any agreement by the County that it would reconsider the project in a different manner, or any order requiring it to do so. There was no evidence that the lawsuit would cause the County to reconsider its CEQA review or change its conclusions regarding CEQA impacts in this or any other case. The court noted statements by various residents that they “believe[d]” the action would cause the County to give more serious consideration to their concerns about the project and private development, but found these statements speculative and unsubstantiated. The court concluded that based on the limited nature of the project— development of a less than 1,500-square-foot single-family home on one lot— plaintiff had not shown that stopping the project conferred a benefit on the general public or a large class of persons.

 

A court of appeal upheld the City of Madera’s interpretation of a municipal code provision requiring “a five-sevenths vote of the whole of the [City] Council” as mandating the approval of five councilmembers, rather than a five-sevenths vote of the councilmembers voting on the matter. Lateef v. City of Madera, No. F076227 (5th Dist., Feb. 14, 2020).

Plaintiff appealed to the City Council after his application for a conditional use permit to sell alcohol at a convenience store was denied by the Planning Commission. The City has a seven-member City Council. At the time of the hearing on plaintiff’s application, one council seat was vacant, and one councilmember recused himself from voting.  Thus, only five councilmembers were present and eligible to vote. The City Council voted four to one to overturn the Planning Commission’s decision. The City Clerk initially announced that the motion had passed, but the City ultimately determined that the motion failed to meet the requirement in Municipal Code that “four-fifths vote of the whole of the Council shall be required to grant, in whole or in part, any appealed application denied by the Commission.”

Plaintiff filed suit, arguing (1) the City was required to grant his appeal because the Municipal Code requires a five-sevenths vote of the councilmembers present and voting, and (2) he was denied a fair trial because the recused councilmember and vacant seat were improperly included in counting the number of votes needed to grant his appeal.

The appellate court disagreed with both contentions. Using established principles of statutory interpretation, the court reasoned that the plain meaning of the four-fifths requirement was clear.  Nothing in the municipal code indicated that the “whole of the council” meant those present and voting. The court reasoned that the word “whole” must mean something and could not be ignored as mere surplusage. Thus, although plaintiff received the votes of five-sevenths of the voting councilmembers, he did not receive the required five-sevenths vote of the entire City Council.

Plaintiff contended that this interpretation would lead to absurd consequences because (1) only four councilmembers are needed to be present and voting for a quorum; and (2) even though four councilmembers were present, an appeal of a Planning Commission decision would automatically be denied because it would be impossible to obtain five votes. The court declined to adopt plaintiff’s interpretation, observing that courts did not have the power to rewrite an ordinance to make it conform to a presumed intent that differed from the plain and direct import of the words used.

Lastly, the court held that because the City had correctly interpreted its code, plaintiff was not denied a fair hearing by the inclusion of the recused councilmember and vacant seat in determining the number of necessary votes. The court also noted that plaintiff could have requested a continuance of the hearing until the vacant seat was filled.

On March 16, 2020, in response to the COVID-19 (coronavirus) global pandemic, seven counties – Alameda, Contra Costa, Marin, San Francisco, San Mateo, Santa Clara, and Santa Cruz – issued orders requiring residents to shelter in place and mandating closure of many businesses. The orders exempt certain “essential” business operations, which include the “construction of housing,” from these restrictions. This article addresses the narrow question whether and to what extent the orders allow or prohibit activities related to the construction of housing.

The exact wording of each order differs slightly, but the substance is the same. Each contains language similar to the following:

For purposes of this Order, individuals may leave their residence to provide any services or perform any work necessary to the operations and maintenance of “Essential Infrastructure,” including, but not limited to, public works construction, construction of housing (in particular affordable housing or housing for individuals experiencing homelessness), airport operations, water, sewer, gas [and] electrical . . . provided that they carry out those services or that work in compliance with Social Distancing Requirements as defined this Section, to the extent possible.

The orders are new and untested.  We expect to learn more in the next few days about how the orders will be interpreted and applied. However, applying common-sense meanings in light of the intent of the orders to allow continued homebuilding appears appropriate.

Work “Necessary” to Housing Construction.  The orders expressly exempt housing construction activities, as confirmed in notices being distributed by some (but not all) city and county officials. The details of exactly which associated services are exempted is less clear. The California Building Industry Association is taking the position that permit, inspection and other services are also “necessary” to accomplish the construction of housing and therefore exempt, including plan checks, issuance of building and grading permits, inspections for permits and certificates of occupancy, utility hook-ups, and recordation of necessary documents such as mechanics liens, tax liens, easements, financing instruments, covenants, conditions and restrictions, and title transfers. The issue of whether title companies and recordation offices may remain open is especially complicated in light of factors other than these orders, but the position taken by the CBIA comports with the literal language of the orders.  Another issue not expressly addressed is whether activities needed for occupancy of a residence, such as appraisals, home inspections, and visits by prospective homebuyers or tenants, may occur. The intent of the orders supports the conclusion that these activities are exempt as well.

Mixed Use Projects as “Construction of Housing.” While the orders do not expressly address mixed-use projects, it is reasonable to interpret them to mean that mixed-use housing projects are exempt because they involve the “construction of housing.” Some questions might arise if a phased mixed-use project includes phases that provide no housing and construction of those phases can feasibly be severed from the rest of the project.  As of the writing of this article, however, the San Francisco Chronicle is reporting that San Francisco is considering all mixed use projects to be exempt.

Other Residential Services. The orders contain additional language that exempts plumbers, electricians, and “other service providers that provide services necessary to maintaining the safety, sanitation, and essential operation of residences . . . .”  While this text appears primarily directed at “maintaining” existing residences, it lends support to the general notion that work designed to provide all residents with safe, functioning homes is exempt.

Traveling for Housing Activities.  Traveling done for the purposes of any of the exempt activities described above should also be considered exempt.

San Francisco voters have approved a Vacancy Tax Ordinance, which imposes a tax assessment on vacant commercial space beginning January 1, 2021. The tax applies to any commercial space that is “unoccupied, uninhabited, or unused for more than 182 days whether consecutive or non-consecutive in a tax year.” The tax is intended to help reinvigorate commercial corridors and stabilize commercial rents to allow new small businesses to open and thrive. Our update summarizing the ordinance and outlining what owners and others can expect after January 1, 2021, by Allan E. Low and Anne Li, is available here.

A Riverside County zoning ordinance that removed religious assemblies as a permissible use in a particular zone did not violate the equal terms provision of the Religious Land Use and Institutionalized Person’s Act (RLUIPA) because it prohibited both religious and secular institutions alike from staging events without charging a fee. Calvary Chapel Bible Fellowship v. Riverside County, No.17-5685 (9th Cir., Feb. 4, 2020)

Calvary Chapel Bible Fellowship operated a church on property it owned in Riverside County’s “Citrus-Vineyard” (C/V) zone. At the time it purchased the property, churches were a permitted use in the C/V zone. The county later amended its zoning regulations to exclude religious assemblies as a permitted use. Calvary continued to operate its church as a legal non-confirming use.

In 2009, Calvary purchased a second a second parcel of land in the C/V zone, with hopes of expanding its church by building a larger sanctuary, a special-occasion facility, an open-air wedding venue, a church administration building, and a single-family residence. Calvary claimed it was unaware, at the time of purchase, of the zoning change that disallowed religious assemblies in the C/V zone. Calvary asked Riverside to amend its zoning ordinance to specifically include religious assemblies as permitted uses in the zoned area and submitted an application to proceed with the proposed expansion.

After both applications were denied, Calvary filed a facial challenge to the ordinance. The church claimed the ordinance violated the equal terms provision of RLUIPA by prohibiting religious assemblies while allowing special occasion facilities, hotels, golf courses, wineries and other uses in the C/V zone. Calvary claimed its proposed religious use was not permitted under any of these categories.

The Ninth Circuit determined that on its face, the ordinance treated both secular and religious places of assembly the same as both were allowed in the C/V zone if they met the requirements of a “special occasion facility.” Special occasion facilities, whether secular or religious, were permitted in the zone if they rented their facilities out in return for compensation. The ordinance thus did not violate RLUIPA’s equal terms provision.

The U.S. Environmental Protection Agency and the Army Corps of Engineers have jointly issued new regulations to redefine what types of water bodies are covered by the Clean Water Act. Dubbed the “Navigable Waters Protection Rule,” the new regulations are the culmination of the Trump administration’s efforts to undo the broad interpretation of federal jurisdiction embodied in the Obama administration’s 2015 “Clean Water Rule.” According to the preamble, the new regulations maintain “federal authority over those waters that Congress determined should be regulated by the Federal government under its Commerce Clause powers, while adhering to Congress’ policy directive to preserve States’ primary authority over land and water resources.” The agencies contend that the new rule “increases the predictability and consistency of Clean Water Act programs by clarifying the scope of ‘waters of the United States’ federally regulated under the Act.” A comprehensive summary of the new regulations, by Marc Bruner and Andrea Driggs, is available here.