A Summary of Published Appellate Opinions Under the California Environmental Quality Act

The California Supreme Court issued its only CEQA opinion of 2018 at the end of the year. In Sierra Club v. County of Fresno, the court rejected a standard air quality impact analysis in the EIR for a typical mixed-use development project. The court declined to apply the substantial evidence standard of review to the EIR’s discussion of the impact. Instead, the court independently decided that the EIR’s discussion did not include “detail sufficient to enable those who did not participate in its preparation to understand and to consider meaningfully the issues raised by the proposed project.”

In another case focused on air quality, a court of appeal upheld most aspects of an EIR for a new railyard and agreed that the project would reduce overall truck emissions, but it held that the EIR did not include sufficient information describing the impact of truck emissions along a four-mile truck route that adjoined residences and schools.Several other 2018 decisions addressed whether comments by members of the public amounted to substantial evidence of significant environmental impacts, which would preclude the lead agency from adopting a negative declaration rather than preparing an EIR. Two of these opinions concerned projects in designated historic districts. These courts delivered a clear message that residents’ statements that the mass, density, height, or materials of a proposed project are inconsistent with a historic district—as opposed to mere expressions of dislike of a project’s design—can constitute substantial evidence of a significant aesthetic impact on the historic district, necessitating an EIR. In one of these cases, the court also found that observations of traffic conditions by nearby residents could prevail over both a traffic expert’s report and a city’s established traffic significance thresholds.

In a third case, however, the court examined project opponents’ attempt to apply the noise analysis from one project to a different project in a different location, concluded that their statements did not constitute substantial evidence that the second project would cause a significant noise impact, and upheld the project’s negative declaration.

Finally, the Golden Door Properties case illustrates the difficulties that lead agencies continue to face in developing quantitative thresholds for significant greenhouse gas impacts. The court rejected San Diego County’s Guidance Document for analyzing GHG impacts, finding a violation of the rule that a lead agency’s adoption of a threshold of significance must be adopted by ordinance, resolution, rule, or regulation and must be developed through a public review process. Substantively, the court held that substantial evidence did not support the Guidance Document’s efficiency metric of 4.9 metric tons of carbon dioxide-equivalent per service population per year, because the evidence did not show why use of statewide GHG reduction levels would properly be used in the specific context of San Diego County.


Ninth Circuit Holds that Rent Control Board’s Denial of a Mobile Home Owner’s Request for Rent Increase Is Not an Unconstitutional Taking 

The Ninth Circuit held that the City of Carson’s mobile home rent control board’s decision not to factor in debt service increases in its adjustment of a rental rate for a mobile home park did not result in a regulatory taking of the mobile home park owner’s property. Colony Cove Props., LLC v. City of Carson, 888 F.3d 445 (9th Cir. 2018)

The plaintiff purchased a $23 million rent-controlled mobile home park in the City of Carson, $18 million of which was financed through a loan.  When the plaintiff acquired the property, the City Rent Review Board’s application review guidelines required the Board to consider certain expenses submitted by property owners against the property’s income to determine what rents would give the owner a fair return on their investment. At the time the plaintiff purchased the property, these expenses included debt service, which are interest payments made on a loan to purchase the rent-controlled property.  Subsequently, the City revised its guidelines for considering rent increases and the City’s new rent control formula no longer factored in debt service expenses.

The plaintiff twice petitioned the city’s Rent Review Board for a several hundred-dollar rent adjustment, per space. Applying the new guidelines, the City only granted a rent increase of $36.74.  The plaintiff sued the City, contending the Board’s decision was an unconstitutional taking. The jury awarded the plaintiff over $3 million in damages and the City appealed the decision.

The Ninth Circuit engaged in a regulatory takings analysis, governed by the factors set out in Penn Central v. Transportation Co. v. City of New York, 438 U.S. 104 (1978), which instructs courts to evaluate: 1) the regulation’s economic impact; 2) the extent to which the regulation interferes with distinct investment-backed expectations; and 3) the character of the government action.

First, citing prior cases finding that a diminution in property value in excess of 75% did not amount to a taking, the court found that the denial of the plaintiff’s requested rent increase was not a legally sufficient economic impact.  The plaintiff’s diminution in value “would only be 24.8% … far too small to establish a regulatory taking.”

Second, the plaintiff argued the change interfered with an investment-backed expectations because the City’s implementation guidelines at the time plaintiff purchased the property included a debt service calculation in the rent increase.  The court rejected this argument as the guidelines explicitly stated the current analysis would not create an entitlement to a specific rent increase.  The court further concluded that the owner’s reliance on the City continuing its past practice of calculating debt service in future rent increases did not create a reasonable investment-backed expectation.

Lastly, the court reasoned that the City’s rent control program should be characterized as a public program, rather than a physical invasion, as the rent control program is intended to protect homeowners from rent increases. The court found that the “[t]his central purpose of rent control programs counsels against finding a Penn Central taking.”

The Ninth Circuit therefore found that no reasonable finder of fact could conclude the plaintiff successfully presented a regulatory takings claim and reversed the district court’s judgment.

Court Upholds the City of Los Angeles’s General Plan Amendment for Mixed Use Development Project

The Second District Court of Appeal upheld the City of Los Angeles’s General Plan amendment, which changed the land use designation of a proposed project site for a mixed-use development against challenges the decision was prohibited by the City Charter. Westsiders Opposed v. City of Los Angeles, 27 Cal. App. 5th 1079 (2018).

The developers filed a permit application with the City for the project, which consisted of the demolition of an automobile dealership and construction of an 800,000 square foot mixed-use project on a five-acre site in West Los Angeles that would include 516 residential units, 99,000 square feet of retail floor area, and 200,000 square feet of office floor area.  Project approval required a General Plan amendment, a zoning amendment, multiple conditional use permits, a development agreement, and an environmental impact report. The City Council adopted ordinances approving the General Plan amendment and the project.

Plaintiffs challenged the approvals, alleging 1) the City Charter bars amending the General Plan for a single project site or single parcel, 2) the Charter bars the City from allowing a member of the public to initiate a General Plan amendment, and 3) the City failed to make the required findings.

Under the Charter, the General Plan may be amended by “geographic areas” that have a “significant social, economic or physical identity.”  The plaintiffs contended that a “geographic area” must be larger than a single lot and the Project site therefore did not qualify as a geographic area with significant or special identity.  Relying on principles of statutory construction, the court rejected the plaintiffs’ argument and concluded that the Charter did not limit the amendment process to a minimum area or number of parcels and that the court was “prohibited from implying any such limitation or restriction on the City’s exercise of its power to govern municipal matters.”  The court concluded the City did not violate the Charter by amending the General Plan designation for a single parcel because the Charter did not clearly restrict the City’s power to do so.

Plaintiffs also argued that the City did not make the required findings that the lot was a “geographic area” or that “the lot has a significant economic or physical identity.”  The court disagreed, noting that the City is not required to make explicit findings to support the General Plan amendment because the amendment is a legislative act.  Regardless, the court held that the City did make explicit findings that the lot had unique characteristics because it was a transit-oriented district that necessitated higher density that would reduce vehicle trips and provide greater local amenities to the neighborhood.

Plaintiffs also argued that the City violated the Charter by allowing the project developers to initiate the General Plan amendment. The court summarily rejected this argument finding that the developer simply requested an amendment while the Director of Planning signed the form initiating the amendments as required under the Charter. Thus, the City did not violate the Charter because the Charter does not prohibit the City from receiving amendment requests from private parties.

Court of Appeal Holds that Petition Challenging Wal-Mart Project is Barred by Earlier Lawsuit Raising the Same Issues

The court of appeal held that the plaintiff’s challenge to the City of Rohnert Park’s reapproval of a Wal-Mart grocery store was barred by the doctrine of res judicata because a prior proceeding had raised the same issues.  Atwell v. City of Rohnert Park (Wal-Mart Stores, Inc.), 27 Cal. App. 5th 692 (2018).

In 2010, the City approved the Wal-Mart project.  Following the City’s approval, the Sierra Club and Sonoma County Conservation Action (SCCA) filed a petition challenging the project on grounds that it violated CEQA and conflicted with the City’s General Plan Policy LU-7.  Policy LU-7 sought to “encourage new neighborhood commercial facilities and supermarkets to be located to maximize accessibility to all residential areas. … to ensure that convenient shopping facilities such as supermarkets and drugstores are located close to where people live and facilitate access to these on foot or on bicycles … this policy will encourage dispersion of supermarkets rather than their clustering in a few locations.”

While the plaintiffs in the 2010 proceeding alleged that the project conflicted with Policy LU-7 in their petition, the plaintiffs did not pursue the claim during the proceeding.  The trial court ultimately granted the petition on the CEQA claims and ordered that the resolutions approving the Project be vacated, and that the Project be remanded for additional environmental review with respect to traffic and noise impacts.

The City prepared a revised EIR;  however, the EIR did not alter the original EIR’s analysis of the project’s consistency with the General Plan.  Following the City’s reapproval of the project in 2015, the plaintiffs filed this current proceeding challenging the project’s consistency with Policy LU-7.  The trial court denied the petition finding that the petition was barred by the 2010 proceeding under the doctrine of res judicata.

The doctrine of res judicata applies where a claim or issue raised in the present action is identical to a claim or issue litigated in a prior proceeding, the prior proceeding resulted in a final judgment on the merits, and the party against whom the doctrine is being asserted was a party or in privity with a party to the prior proceedings.

The court of appeal affirmed the trial court’s finding that the prior and present proceedings both raised the claim that the project was inconsistent with Policy LU-7.  The court rejected the plaintiff’s argument that the actions raised distinct issues because the prior proceeding did not actually litigate the General Plan issue.  Rather, the court held that the doctrine of res judicata applied to issues that could have been litigated, as well as to issues actually litigated, finding that “[n]othing in the record suggests appellants’ current petition materially differs from the General Plan consistency claim raised in the [2010] Sierra Club action[.]”

The court also rejected plaintiffs’ argument that no privity existed between them and Sierra Club and SCCA.  Privity within the context of res judicata concerns a person’s relationship to the subject matter of the litigation.  The court found that “[t]his case raises issues of harm to the community – namely, the detrimental impact to neighborhood supermarkets caused by having one located in a large commercial area. … Likewise, Sierra Club and SCCA brought their petition on behalf of its members who are part of the community.”  Accordingly, the court held that there was privity as the relationships of plaintiffs, the Sierra Club and SCCA to the subject matter of the litigation were identical.

Supreme Court To Decide If CEQA Review Is Required For Well Permits.

The Supreme Court of California has granted review of two cases to resolve a split among courts of appeal over whether the issuance of well permits pursuant to state standards is subject to CEQA. California Water Impact Network v. County of San Luis Obispo and Protecting Our Water & Environmental Resources v. Stanislaus County.

At the forefront of these cases is whether the standards issued by the Department of Water Resources for well construction give local agencies any discretion when issuing well permits. Water is a critical resource in the state and with enactment of the Sustainable Groundwater Management Act in 2014, groundwater, particularly its sustainable withdrawal and quality, are issues receiving more attention. Consequently, the practice of ministerial approval of well construction permits by local agencies without discretionary environmental review have come under increasing scrutiny.

In both California Water Impact Network and Protecting Our Water & Environmental Resources, plaintiffs alleged that the counties’ practice of treating approval of well construction permits as a ministerial action results in hundreds of permits being issued each year without CEQA review. The plaintiffs assert that this practice, and the counties’ respective ordinances, violate CEQA because the state standards are not entirely objective, rather, they give the counties discretion to consider local environmental factors when issuing a permit. It is against this backdrop that the Court will consider both cases. The Court’s decision will likely affect how well construction permits are reviewed and issued by local agencies throughout the state.

Water Code Section 13801 requires local agencies to adopt the minimum standards established by DWR for well construction. These standards, in DWR Bulletins No. 74-81 and 74-90, provide guidance on well construction, location, surface features, seals, casing materials and so forth with the goal of preventing groundwater contamination and pollution. Stanislaus County’s well ordinance incorporates both DWR Bulletins, while San Luis Obispo County’s ordinance only incorporates DWR Bulletin 74-81, though in practice, the county also applies the standards in DWR Bulletin 74-90.

Plaintiffs in the two cases argued that the DWR Bulletins require that the counties exercise discretion when issuing well permits. In California Water Impact Network, plaintiff argued that DWR’s standards include consideration of the cumulative depletion of groundwater in approving or denying a permit. In Protecting Our Water & Environment, plaintiff relied on a provision in DWR Bulletin 74-90 requiring wells to be located an adequate horizontal distance from potential contamination sources.

The California Water Impact Network court ruled that San Luis Obispo County’s process for issuing well construction permits was ministerial. The court examined the DWR Bulletins and found that nothing in the standards authorizes the county to consider the cumulative depletion of groundwater when issuing a well permit. The primary purpose of the DWR standards is to protect water quality, not quantity. Furthermore, the court stated that even if the County could impose additional requirements pursuant to DWR’s standards, it had not exercised that authority.

The Protecting Our Water & Environment court reached an opposite conclusion. It identified a specific provision in DWR Bulletin 74-90 as requiring a local agency to use its discretion when reviewing a proposed well construction permit. Section 8(A) of the Bulletin pertains to well location and provides that “All water wells shall be located an adequate horizontal distance from known or potential sources of pollution and contamination” (emphasis added). Section 8(A) lists in a chart the recommended distances from various potential contamination sources but also states that appropriate distances for individual wells requires an evaluation of existing and future site conditions. The court found this language to require local agencies to make a subjective determination with regards to well location. What is “adequate” depends on specific features and local conditions of a well, not fixed standards or technical criteria and a local agency making this determination would use discretion to determine adequate spacing. Because Stanislaus County’s well construction ordinance incorporates DWR Bulletin 74-90, the court held that issuance of well construction permits under the ordinance are a discretionary act subject to CEQA.

These cases tee up for the Court whether the DWR Bulletins for well construction contain purely objective standards or if subjective determinations are required to account for the different factors involved in permitting individual wells. Relatedly, the Court may also examine how the counties’ ordinances incorporate and implement the DWR Bulletins. Given the backdrop of these cases, the Court is also likely to opine on the policy and practical implications of its decision. As the Protecting Our Water & Environment court recognized, requiring Stanislaus County to complete a CEQA analysis on the hundreds of well permits issued each year may be burdensome and costly, but is required if the county has discretion to dictate how well construction is carried out.

The Court will first review Protecting Our Water & Environmental Resources and has deferred action on California Water Impact Network pending disposition of the former case.

California Water Impact Network v. County of San Luis Obispo (Justin Vineyards and Winery, LLC), 25 Cal. App. 5th 666 (2018), Protecting Our Water & Environmental Resources v. Stanislaus County, F073634 (2018) (unpublished)



Further Environmental Review Required for Fracking Off California Coast

A federal court has prohibited the U.S. Department of the Interior from approving any plans or permits for hydraulic fracturing off the California coast until it complies with the Coastal Zone Management Act and the Endangered Species Act. Environmental Defense Center v. Bureau of Ocean Energy Management, No. 16-cv-8418, 2018 WL 5919096 (C.D. Cal. Nov. 9, 2018).  The court determined that two bureaus of the Department had violated the Coastal Zone Management Act by failing to prepare a determination as to whether the proposed fracking was consistent with California’s coastal management program, and the Endangered Species Act by failing to consult adequately with the Fish and Wildlife Service before issuing the final Environmental Assessment. Our full Update on the case, by Laura Godfrey Zagar and Jacob E. Aronson, is available here.

New Guidelines for Assessing Transportation Impacts Under CEQA Finalized

The California Natural Resources Agency has adopted new CEQA Guidelines that will leave behind level of service in favor of vehicle miles traveled.

Following years of development and public comment, the Office of Planning and Research (OPR) and the Natural Resources Agency have issued new CEQA Guidelines for analyzing transportation impacts.  These new regulations represent a significant shift in analyzing transportation impacts under CEQA.  By July 1, 2020, all CEQA lead agencies must analyze a project’s transportation impacts using vehicle miles traveled (VMT).  VMT measures the per capita number of car trips generated by a project and distances cars will travel to and from a project, rather than congestion levels at intersections (level of service or “LOS,” graded on a scale of A – F).  California’s largest cities have already adopted VMT standards and abandoned LOS, but many other jurisdictions will continue to require LOS analysis — not for CEQA purposes, but because their general plans or other policies require LOS analysis.

In this update, we highlight key aspects of the VMT guidelines and how projects could be impacted by this important change in conducting transportation impacts analysis.


In 2013, the California legislature enacted SB 743, which required, among other things, that OPR adopt new guidelines for assessing transportation impacts and that when enacted, traffic congestion would no longer be considered in assessing a significant impact under CEQA.  The purpose was to better align transportation impacts analysis under CEQA with the state’s goals of reducing greenhouse gas emissions and traffic-related air pollution and promoting multimodal transportation networks and a diversity of land uses.  Under the existing framework of congestion-based analysis using LOS, infill and transit-oriented development is often discouraged because such projects are in areas of existing traffic congestion.  As policymakers and legislators have recognized, congestion-based analysis does not necessarily improve the time spent commuting and is often at odds with state goals of reducing vehicle usage and promoting public transit.  Indeed, a frequent solution to reducing level of service at intersections is to increase roadway capacity, which studies have found can actually lead to an increase in system-wide congestion and an increase in travel time.  It is also now better understood that LOS does not accurately reflect vehicle travel as it only focuses on individual local intersections and roadway segments and not on the entire vehicle trip.

VMT is not a new tool for assessing environmental impacts under CEQA.  It is used to assess a project’s impact on greenhouse gas emissions, air quality, and energy.  Using VMT for analyzing transportation impacts will emphasize reducing the number of trips and distances vehicles are used to travel to, from, or within a development project.  Projects located near transit and/or within infill areas generally have lower VMT than projects in rural or undeveloped areas.  The shift to VMT analysis under CEQA is intended to encourage the development of jobs, housing, and commercial uses in closer proximity to each other and to transit.

The New Guideline and Technical Advisory

Section 15064.3 of the newly adopted CEQA Guidelines gives agencies wide latitude in assessing transportation impacts with VMT.  The more technical details of calculating VMT and assessing impacts are found in a Technical Advisory issued by OPR. The Technical Advisory provides guidance on assessing VMT, different methodologies, significance thresholds, and mitigation measures.

SB 743 authorized OPR to decide whether the new VMT-based approached would apply only to “transit priority areas” or to all areas in the state.  A transit priority area is an area within one-half mile of a major transit stop.  A major transit stop is a “site containing an existing rail transit station, a ferry terminal served by either a bus or rail transit service, or the intersection of two or more major bus routes with a frequency of service interval of 15 minutes or less during the morning and afternoon peak commute periods.” Pub. Res. Code § 21064.3.  OPR has opted to require the new VMT-based analysis in all areas of the state, not just in transit priority areas.  Transit priority areas are still relevant, however; land use projects within one-half mile of a major transit stop or a stop along a high-quality transit corridor should be presumed to have a less than significant transportation impact.  A high-quality transit corridor is a corridor with fixed route bus service with service intervals that do not exceed 15 minutes during peak commute hours.  In addition, projects that decrease VMT in the project area as compared to existing conditions should be presumed to have a less than a significant impact.

Where quantitative models or methods are unavailable, section 15064.3 allows agencies to assess VMT qualitatively, using factors such as availability of transit and proximity to other destinations.  The Guideline also states that the lead agency has discretion to choose the most appropriate methodology and can use its professional judgment to adjust its analysis accordingly.

While not legally binding, the Technical Advisory will be an important reference for agencies in determining how to calculate VMT, setting significance thresholds, and identifying mitigation measures.  For instance, the Technical Advisory discusses the difference between tour-based and trip-based VMT.  Trip-based VMT counts trips to and from one location (i.e. home to work) but does not count any trips taken in between, whereas tour-based VMT includes these trips.  Either method can be used for residential and office projects, but the Technical Advisory recommends tour-based VMT because it is more comprehensive.

Globally, the Technical Advisory suggests that agencies use consistent methodologies for setting thresholds, estimating project VMT, and estimating reductions from mitigations, to allow for apples-to-apples comparisons.

The Technical Advisory also provides guidance for setting screening thresholds and thresholds of significance:

  • As stated by the new Guideline, projects within one-half mile of a major transit stop or high-quality transit corridor should be presumed to result in a less-than-significant impact.
  • Small projects that generate fewer than 110 trips per day may generally be assumed to cause a less-than-significant transportation impact.
  • Agencies may develop map-based screening for residential and office projects where projects located near areas with low VMT may be presumed to have a less-than-significant transportation impact.
  • Residential projects that result in per capita VMT that exceeds 85 percent of existing regional or city average VMT may indicate a significant impact.
  • Office projects that result in per employee VMT that exceeds 85 percent of existing regional average VMT may indicate a significant impact.
  • With retail projects, the Technical Advisory recommends that the analysis should be based on total change in VMT because retail projects usually re-route travel from other retail destinations.

For mitigation measures, the Technical Advisory lists a bevy of measures that could reduce VMT, which include: improving or increasing access to transit; incorporating affordable housing into the project; providing bicycle parking; limiting or eliminating parking supply; and providing telework options.

The updated version of the Technical Advisory, released December 2018, includes new guidance on the impact of affordable housing on VMT.  Generally, residential projects with more affordable housing are considered likely to reduce VMT, whereas projects that replace affordable housing units with fewer market rate housing units may increase overall VMT.  A high percentage of affordable housing may serve as the basis for finding a less-than-significant transportation impact.


The new Guidelines and Technical Advisory are consistent with the state’s effort to use land use planning to reduce greenhouse gas emissions and air pollution.  Many jurisdictions have already made the switch or begun the transition to VMT, including San Francisco, Oakland, San Jose, Los Angeles, and Sacramento.

SB 743 and the new guidelines do not, however, require lead agencies to abandon LOS for purposes other than CEQA analysis.  Some cities have LOS requirements in their general plans.  In these jurisdictions, a project may need both a VMT analysis for CEQA purposes and an LOS analysis for purposes of establishing consistency with the general plan.

Agency May Take Over Preparation of the Record in a CEQA Case if the Petitioners Unreasonable Delays Preparing It

Where a petitioner in a CEQA case has elected to prepare the administrative record but unreasonably delays such preparation, the defendant agency may prepare the record itself and be awarded costs for doing so.  LandWatch San Luis Obispo Co. v. Cambria Comm. Serv. Dist., 25 Cal. App. 5th 638 (2018).

LandWatch, a nonprofit organization, filed a petition for writ of mandate alleging that the Cambria Community Services District failed to comply with CEQA when it approved an emergency water supply project.  LandWatch elected to prepare the administrative record, subject to the District’s certification of its accuracy.

LandWatch did not present a draft administrative record index until ten months after filing its petition.  There were disagreements over the scope of the index, and the District quickly prepared a revised version of the record.   LandWatch then further delayed the production of supplemental documents that it had argued were necessary.  With trial nearing, the District prepared the supplemental index for LandWatch. The trial court noted that these delays in litigation put the District in financial distress because the county would not release $4.3 million in grant funds for the project while litigation was pending.

Ultimately, the District prevailed in the CEQA lawsuit and was awarded costs for preparing the record and appendix.  LandWatch appealed.

The court held that the District properly took over preparation of the record and appendix after unreasonable delay on LandWatch’s part.  LandWatch had the right to prepare the record, but within the time limit specified by CEQA,  which is 60 days from the date of the petitioner gives notice it has elected to prepare it.  Because LandWatch did not present the documents to the District for certification until far beyond the time limit, the court found that LandWatch had unreasonably delayed, and thereby forfeited, its right to prepare the record.

New State Density Bonus for Student Housing Takes Effect

As of January 1, State law offers a new density bonus to qualifying student housing developments. The legislation (Senate Bill 1227) is one of several bills the Legislature has passed over the last two years to address California’s unprecedented shortage of affordable housing.

As explained by Senator Skinner, the sponsor of SB 1227, the bill is intended to allow student housing projects to become eligible for a density bonus regardless of whether they include apartment-style units or dormitory-style bedrooms. The State Density Bonus Law previously was written to apply only to “units.”

SB 1227 amends the Density Bonus Law by adding a bonus for eligible student housing developments in which at least 20 percent of units, or rental beds, are restricted to lower-income students for 55 years. For purposes of calculating a student housing density bonus, the legislation provides that the term “unit” is equivalent to one rental bed and its pro rata share of associated common area facilities.

To qualify, a project must meet these requirements:

  • All student housing units must be used exclusively for students enrolled full time at an accredited institution of higher education. The developer must enter into an operating agreement or master lease with one or more institutions to occupy all the student housing units.
  • Qualifying “lower-income students” must have a verified household income and asset level that does not exceed the level for “Cal Grant A” or “Cal Grant B” award recipients.
  • Rent in the units restricted to lower-income students may not exceed 30 percent of 65 percent of the area median income for a single-room occupancy unit type.
  • The development must provide a priority for its affordable units for lower-income students experiencing homelessness.

Cities and counties are required to grant qualifying projects a “density bonus” of 35 percent of the student housing units — in other words, a density increase of 35 percent over the otherwise maximum allowable gross residential density. These projects also can become eligible for the several other benefits already available under the Density Bonus Law, including incentives or concessions, waivers or reductions of development standards, and limitations on parking requirements.

Aesthetic and Traffic Issues in Historic Overlay District Necessitate EIR

A court of appeal has overturned a city’s mitigated negative declaration for a small mixed-use development in a historic overlay district, holding that aesthetic and traffic issues require the preparation of an environmental impact report. Protect Niles v. City of Fremont, 25 Cal. App. 5th 1129 (2018).

The proposed project, comprising 98 housing units and 3,500 square feet of commercial uses, was to be located in the Niles Historic Overlay District within the City of Fremont. The city approved a mitigated negative declaration for the project, finding that with mitigation incorporated, the project would cause no significant environmental impacts necessitating an EIR.

Residents sued, alleging that an environmental impact report was required because substantial evidence supported a fair argument that the project would cause significant impacts: due to 1) aesthetic incompatibility with the historic district; and 2) traffic impacts that were not acknowledged in the expert traffic report prepared for the city’s analysis. The court of appeal upheld both challenges and required that an EIR be prepared.

Aesthetics. With respect to aesthetics, the court cited CEQA’s express concern for aesthetic and historic environmental qualities, as well as case law holding that a project’s context is vital to assessment of its aesthetic impacts. Here, members of both the public and the city’s Historical Architectural Review Board had cited the project’s “siting, massing, scale, size, materials, textures and colors” as inconsistent with the historic district’s “small town feeling.”

The court first held that a project’s visual impact on a surrounding officially-designated historical district is an appropriate topic for aesthetic review under CEQA, and that such an aesthetic analysis does not undermine the separate scheme for CEQA review of environmental impacts on historical resources. Next, recognizing that aesthetic judgments are inherently subjective, the court observed that objections raised by HARB members and others “were not solely based on vague notions of beauty or personal preference, but were grounded in inconsistencies with the prevailing building heights and architectural styles of the Niles HOD.” The court found that these personal observations constituted substantial evidence that the project would cause a significant aesthetic impact in the context of the historic district.

Traffic. The court next concluded that the city’s expert traffic report could not prevail over individuals’ observations of existing traffic conditions and predictions of hazards. The traffic report concluded that a new left-turn pocket in front of the project, while recommended, was not necessary, based in part on the posted speed limit. Commenters stated, however, that the posted speed limit was often ignored, and that without a left-turn pocket, the combination of high speeds, queued drivers waiting to turn left into the project, and a blind curve would result in dangerous conditions. The court identified these comments as substantial evidence supporting a fair argument that the project would create a traffic safety hazard.

Nor did the city’s established significance threshold for deterioration in traffic level of service protect it from the need to prepare an EIR. The city acknowledged that with the proposed project, the level of service nearby would deteriorate from an unacceptable LOS E to a still worse LOS F, but under the city’s significance thresholds, this did not constitute a significant impact. The court, citing residents’ and officials’ reports of extreme traffic backups under existing conditions, concluded that these comments “supported a fair argument that unusual circumstances in Niles might render the thresholds inadequate to capture the impacts….”


The Protect Niles decision highlights the importance courts can attach to comments by the public – on both non-technical and technical issues – where an agency proposes to rely on a negative declaration rather than an EIR. Because CEQA is designed to favor EIRs over negative declarations, plausible fact-based comments (as opposed to generalized complaints) can, depending on the circumstances, prevail over both expert reports and agency significance thresholds, leading to the need for an EIR.