The Ninth Circuit upheld the Federal Aviation Administration’s decision to study only the project and the no action alternative in an EIS for a new passenger terminal. However, the court found the FAA violated NEPA by failing to account for the combined noise that could result from the simultaneous operation of different types of construction equipment. City of Los Angeles v. Federal Aviation Administration, 63 F.4th 835 (9th Cir., 2023).

As early as 1980, the FAA and the local airport authority began planning to replace the passenger terminal at the Hollywood Burbank Airport, which no longer met federal standards. After a lengthy process that included passage of a local ballot measure in 2016, the FAA commenced preparation of a new Environmental Impact Statement to study the project. The EIS took several more years, and the FAA issued its record of decision in 2021. The City of Los Angeles, which owns 100 acres of the 555-acre airport site, sued.

The court first rejected LA’s claim that the FAA violated NEPA by studying only the project and the no action alternative in detail. The court upheld the FAA’s purpose and need statement for the project, which was to provide a passenger terminal that meets FAA standards, passenger demand, and building requirements and to improve utilization and operational efficiency of the terminal. It also approved the FAA’s screening process, in which the FAA considered 10 project alternatives, including an offsite location, a remote terminal, use of other airports, use of other modes of transportation, reconfiguration of runways, placing the new terminal in another area within the airport, and the no action alternative. The FAA screened out alternatives that did not meet the purpose and need, and those that would not be practical or feasible to implement in light of a development agreement the airport authority had entered into with the city, the ballot measure and other practical considerations such as space availability. The court concluded “Given FAA’s unchallenged technical and economic analysis that led to elimination of all alternatives except the proposed action and no action—as well as Los Angeles’s failure to identify a viable alternative that FAA did not consider—the circumstances here justify FAA’s conclusions.”

The court then agreed with LA that the FAA failed to take the required hard look at the environmental consequences of construction noise. The FAA had relied on the Federal Highway Administration Roadway Construction Noise Model User’s Guide and assessed the impacts of the loudest type of equipment – a jackhammer – on nearby residences. Though the FAA acknowledged that adding two sounds of the same level would increase sound levels by approximately 3 decibels, the FAA did not try to calculate the combined effects from multiple pieces of equipment operating simultaneously. This was not an inconsequential technical deficiency, but a fundamental error in the agency’s noise analysis. Nor was there any support for the FAA’s implied assumption that construction equipment would not be run simultaneously. The court accordingly remanded to the FAA to reconsider its construction noise analysis.

Remodeled residential units converted from space long dedicated to residential use are not considered new construction and are not exempt from local rent control under the Costa-Hawkins Rental Housing Act. NCR Properties, LLC v. City of Berkeley, No. A163003 (1st Dist., March 9, 2023).

Appellant landlords purchased two derelict single-family homes and rehabilitated them, converting them into triplexes, obtaining certificates of occupancy after completion of construction. After the units were rented out, a dispute arose as to whether the properties were subject to the City’s Rent Stabilization and Eviction for Good Cause Ordinance.

Appellants contended that the new units were exempt from local rent control under Costa-Hawkins, which provides an exemption for residential units that have a certificate of occupancy issued after February 1, 1995. The City disagreed as to four of the six units, noting that before appellants purchased the homes, the properties had been managed as rooming houses and two of the three units in each building were carved from space that had been rented for residential use before the current certificates of occupancy were issued.

The First Appellate District relied on prior caselaw holding that issuance of a new certificate of occupancy for conversion of an apartment to a condominium did not exempt the unit from rent control under Costa-Hawkins. It reasoned that Costa-Hawkins applied only to certificates of occupancy issued prior to residential use of the unit; hence buildings certified for residential occupancy prior to February 1, 1995, were not excluded.

Appellants argued that even if Costa-Hawkins applied only to certificates of occupancy that preceded residential use of a unit, the properties at issue qualified for an exemption because the renovations expanded and improved the living spaces, enabled the properties to house more people and created triplex units that had not previously existed. They pointed out that these renovations were no mere paperwork conversions and that the buildings were derelict and unoccupied before renovations began. The court acknowledged that the renovations were extensive and increased the ability to house more people, but ultimately rejected the appellants’ argument, observing that the City had found one unit in each building exempt from rent control as new construction, and the square footage of residential space that was subject to rent control appeared to be less than the square footage of the two units the City had exempted.

Plaintiff did not exhaust administrative remedies when challenging the City’s approval of a homeowner’s development project on the ground that a Class 1 categorical exemption was inapplicable. Arcadians for Environmental Preservation v. City of Arcadia, 88 Cal. App. 5th 418 (2023).

A homeowner applied for approval to expand the first story of her single-family home and add a second story. The City Council approved the project, finding it to be exempt from CEQA under the Class 1 categorical exemption for minor alterations to existing private structures.

The Second Appellate District held that plaintiff failed to exhaust its administrative remedies because it did not properly raise any claims specifically related to the project’s Class 1 exemption at the hearings on the project. Instead, plaintiff made only general statements in opposition to the project, which did not apprise the City of its contention that the project fell outside the scope of the Class 1 exemption.

Plaintiff argued that statements in the written administrative appeal were sufficient to fairly apprise the City of the objection to the exemption. These included references to environmental impacts and a request that the City prepare an EIR, which implicitly challenged reliance on the exemption. The court rejected this argument.  The cited statements were only general complaints in opposition to the project and were only general references to potential environmental impacts that even when considered together, did not come close to meeting the exhaustion requirement mandated by CEQA. The court noted that the exhaustion requirement is met when the exact issue is presented to the agency or is raised in the administrative proceeding and is sufficiently specific to fairly apprise the agency of the substance of the objection so that it has an opportunity to evaluate and respond to the challenge. Because plaintiff did not make specific challenges to the project’s Class 1 exemption and did not raise any other CEQA challenges during the administrative hearings, it failed to meet the exhaustion requirement.

The City of Irvine violated CEQA by approving a development project based on an addendum to a program EIR containing insufficient information regarding the project’s greenhouse gas emissions and by relying on CEQA’s Class 32 infill exemption, which was inapplicable due to unusual circumstances. IBC Business Owners for Sensible Development v. City of Irvine, 88 Cal. App. 5th 100 (2023).

In 2010, the City adopted a plan to guide development of the Irvine Business Complex (IBC) and prepared and approved a Program EIR, studying the effects of the development plan under CEQA. Nine years later, a developer proposed a project to redevelop a 4.95-acre parcel in the IBC. The proposed project would demolish an existing building and parking lots to construct a 275,000-square-foot office complex, consisting of a five-story office building, a six-story office building, and a seven-story parking structure.

City staff prepared an addendum to the EIR and the City Council approved the project, finding that all environmental effects of the proposed project had been adequately studied in the 2010 EIR. 

The Fourth Appellate District held there was insufficient evidence that the project’s greenhouse gas emissions were within the scope of the 2010 EIR and that no categorical exemption applied because the project could cause significant environmental effects due to unusual circumstances.

Addendum to EIR

The City argued that the addendum was proper because the project’s greenhouse gas emissions would be less than significant for two reasons. First, the project’s emissions would be consistent with the 2010 EIR and second, its emissions would comply with the thresholds drafted by the South Coast Air Quality Management District.

The court found there was insufficient evidence to support the City’s first conclusion. The City relied on the flawed understanding that the project was consistent with the EIR by assuming that the project incorporated all the mitigation efforts to achieve the EIR’s target of net zero emissions. The court explained that the incorporation of the mitigation measures alone did not constitute substantial evidence that the project was consistent with the target of net zero emissions. Moreover, even with all applicable measures in place, the large-scale nature of the project could cause it to emit a disproportionate level of greenhouse gases and that the addendum did not examine those emissions. The court explained that to demonstrate the project’s compliance with the EIR’s emissions plan, the City needed to analyze the project’s emissions within the context of present and future development in the IBC and demonstrate that its emissions would not prevent the IBC from achieving its goal of net zero emissions at full buildout.

The court also found the City’s conclusion that project’s emissions would comply with Air District thresholds to be legally incorrect. While the addendum did not discuss total emissions, draft documents indicated that the project would emit 5,563 metric tons of greenhouse gases per year. This was four times the applicable Tier 3 screening level of allowed emissions for commercial land uses established by the Air District. The addendum instead relied on the Air District’s Tier 1 threshold for projects exempt from CEQA based on the erroneous assumption that the project qualified for a categorical exemption.

CEQA’s Class 32 infill exemption

The City argued that any deficiencies in the addendum were inconsequential because the proposed project was categorically exempt from CEQA and thus the City was not obligated to perform any environmental review. The City relied on the Class 32 infill exemption applicable to projects characterized as in-fill development. However, the court concluded that the project did not qualify for the exemption because there was a reasonable possibility that it would have a significant effect on the environment due to unusual circumstances. The proposed project was not a standalone project but part of a plan to guide development in the IBC. The project would demolish an existing building and replace it with substantially larger buildings with more than double the office space originally allocated to the site that could have more substantial greenhouse gas emissions. The transfer of development rights required for this project would also be the largest ever approved in the history of the IBC development plan.

Thus, the size of the project, the scale of the transfer of development rights required to make it possible, the resulting density and the project’s estimated greenhouse gas emissions exceeding the Tier 3 threshold, constituted unusual circumstances that could result in a significant effect on the environment, making the City’s reliance on the Class 32 infill exemption improper.

A local organization appealed the denial of its challenge to the approval of an affordable housing project and disputed the trial court’s order requiring it to post a bond. The Court of Appeal rejected plaintiff’s contentions on the merits and held that the plaintiff was properly required to post a bond because it was delaying an affordable housing project. Save Livermore Downtown v. City of Livermore, No. A164987 (1st Dist., Dec. 28, 2022).

A nonprofit plaintiff group challenged the City of Livermore’s approval of a 130-unit affordable housing project on the grounds that it was inconsistent with the Downtown Specific Plan and violated CEQA. The project’s developer then moved for a $500,000 bond under Code of Civil Procedure section 529.2, which allows courts to order challengers to affordable housing projects to post bonds to cover damages that may be incurred from delay in carrying out the project.

First, the appellate court found there was substantial evidence that the project complied with the City’s Downtown Specific Plan. Inconsistencies between details of the project and standards in the specific plan such as main entrance orientation and window design were not sufficient for a finding that the project would not promote the overarching polices of the plan. 

Second, the court agreed with the trial court’s finding that plaintiff’s CEQA arguments were “almost utterly without merit.” The discovery of groundwater and soil contaminants at the site after the certification of the EIR did not constitute “new information” that would trigger reanalysis under CEQA because the EIR had addressed the potential presence of contaminants at the site due to past uses of the property.

Lastly, the court found that both conditions for issuance of a bond under section 529.2. were satisfied: “(1) the action was brought in bad faith, vexatiously, for the purpose of delay, or to thwart the low- or moderate-income nature of the housing development project, and (2) the plaintiff will not suffer undue economic hardship by filing the undertaking.” Plaintiff filed its petition at the end of the 30-day statute of limitations period and then delayed preparation of the administrative record, causing the hearing on the merits to be delayed. The court found no undue economic hardship because the record showed that the plaintiff nonprofit group was supported by more than 50 members, had spent “$37,000 commissioning plans for an alternative and unrealistic location,” and had hired a prominent and expensive law firm.

A trial court had jurisdiction to find that a denial of a permit application violated the Housing Accountability Act (HAA) on remand, even though the Court of Appeal did not expressly instruct the trial court to address the HAA issue. Ruegg & Ellsworth v. City of Berkeley, No. 2487258 (1st Dist., March 14, 2023).

Plaintiff applied for ministerial approval of a mixed-use development pursuant to the streamlined approval process for affordable housing projects outlined in Government Code section 65913.4. Plaintiff challenged the City’s denial of the permit, alleging that the City violated both the streamlining statute and the HAA, which prohibits local agencies from disapproving affordable housing development projects without making specified written findings.

The trial court originally found that the City did not err in denying the ministerial permit and did not reach the HAA issue. The Court of Appeal reversed and remanded to the trial court with directions to grant the writ petition, stating that it was “unnecessary” for the appellate court to address whether the City’s denial also violated the HAA. On remand, plaintiff argued that the trial court should decide the outstanding HAA issue in addition to granting its writ petition, and the trial court did so.

The Court of Appeal agreed that trial court had jurisdiction to decide the HAA issue because doing so was necessary to fully resolve whether the plaintiff was entitled to the relief sought by the petition. The Court of Appeal’s statement that it was unnecessary to address the HAA issue did not mean that the HAA issue was outside the trial court’s jurisdiction on remand—it left that issue open for determination by the trial court. In addition, plaintiff was not required to seek rehearing of the appellate court’s decision and seek modification of the remand instructions to include further proceedings on the HAA claims — the appellate disposition, read together with the opinion as a whole, gave no indication that the HAA issues were not to be resolved. The trial court’s issuance of the writ requiring the City to grant the ministerial permit also did not moot the HAA claim because determining the HAA claim allowed the trial court to provide further relief, including retaining jurisdiction to ensure enforcement of its orders and imposing fines for noncompliance.

A recent case involving developer Charles Keenan and the City of Palo Alto highlights the importance of strict compliance with Mitigation Fee Act’s requirement that findings be made every five years concerning unexpended fees. The court held that the City’s failure to make such findings within the statutory deadline mandated refund of all unexpended fees, not merely fees held for more than five years. Hamilton and High, LLC, et al., v. City of Palo Alto, et al., No. H049425 (6th Dist., March 20, 2023).

In 2013, Charles Keenan paid an “in-lieu parking fee” of $972,000 imposed as a condition of approval of a commercial development project on Hamilton Avenue in Palo Alto. The fee was imposed on all new commercial development to fund parking facilities in the downtown area. As of the end of 2019, the City had a balance of over $6 million in unexpended parking fees.

The Mitigation Fee Act requires public agencies to make findings every five years concerning unexpended development impact fees. The City made findings for the parking fees for the 2007-08 and 2012-13 fiscal years but did not make such findings by the statutory deadline for the 2017-18 fiscal year (i.e., within 180 days of June 30th.) Keenan demanded a refund of the fee, claiming the City failed to comply with the Mitigation Fee Act. The appellate court agreed and ordered the City to refund all unexpended parking fees. In reaching that conclusion, the court made several important clarifications to the law governing such refund claims.

In-lieu fees are exactions subject to the Act’s findings requirements.

The City argued that findings were not required for the parking fees because developers had the election either to provide parking or pay an in-lieu fee. The court disagreed, finding that the fee was a “monetary exaction” imposed as a condition of approval of a project to fund facilities related to the project and therefore met all requirements of the Act. Based on an extensive review of the caselaw regarding in-lieu fees and the Mitigation Fee Act, the court found no support for the claim that the “in-lieu” or elective aspect of the imposition changed the nature of the fee for purposes of the Act.

The statute of limitations runs from the date a request for refund is denied.

Keenan requested a refund in January 2020, which the City rejected in February 2020, and Keenan filed suit three months later. The trial court held that Keenan’s action was time-barred because it was not filed within one year of the December 2018 deadline for adoption of the five-year findings. The appellate court concluded that the thrust of Keenan’s lawsuit was enforcement of a refund of the unexpended fees rather than a challenge to the City’s failure to make findings. As such, the limitations period did not begin to run until the City denied Keenan’s refund request.

Belated findings do not satisfy the Act.

After denying Keenan’s refund request, the City adopted five-year findings in May 2020 and contended these findings satisfied the Act’s requirements. The court found that this argument “ignore[d] the language specifying ‘If the findings are not made as required by this subdivision, the local agency shall refund the moneys in the account or fund as provided in subdivision (e).’” Because the May 2020 findings were not made within the statutory deadline, they were not made “as required” by the Act, and a refund was therefore mandated.

Failure to make five-year findings that comply with the Act requires refund of all unexpended fees.

The City maintained that the five-year findings requirement applied only to fees held for more than five years and, because the City had transferred $1.3 million from the parking fund to a capital fund, this had exhausted the balance of fees held in the fund for over five years and excused the findings requirement. The court rejected this argument, ruling that the plain language of the statute required the five-year findings to address all unexpended fees, not merely those held for more than five years. The court noted that its reading was consistent with the five-year reports issued by the City, which did not break out fees by date of deposit. The consequence of failure to make timely findings for the 2107-18 fiscal year was refund of all unexpended fees, regardless of the date of collection.

*  *  *

This decision underscores the importance of meticulous compliance with the requirements and deadlines of the Mitigation Fee Act. Five-year findings must be made for all development fees that fall within the Act’s definition, whether or not paid electively in-lieu of some other condition of approval. The findings must be made within 180 days of the end of the applicable fiscal year and must cover all unexpended fees in the fund, not merely fees held for more than five years. Agencies that fail to adopt findings within the statutory period or adopt findings that do not meet the strictures of the Act are at risk of having to refund the entire balance to then-current owners of the properties subject to such fees.


The First Appellate District held that the Regents of the University of California failed to comply with CEQA in certifying the project EIR for its student housing project at People’s Park. Make UC a Good Neighbor v. Regents of University of Cal. (2023 WL 2205638, Feb. 24, 2023). Specifically, the court ruled that the Regents failed to provide a valid reason for deciding not to analyze alternative locations for the proposed housing project and failed to analyze potential noise impacts from loud student parties. The court’s order requires the Regents to fix the errors in the EIR before the project can move forward.  

The Regents certified the EIR and approved the People’s Park student housing project (Housing Project No. 2) in 2021. The petitioner, Make UC a Good Neighbor (“Good Neighbor”), challenged the approvals, alleging multiple CEQA violations and requesting a stay pending resolution of the appeal, which the court granted.    

Alternatives to the Long-Range Development Plan

Good Neighbor argued that the Regents violated CEQA by failing to analyze an alternative to the long-range development plan (“LRDP”) (a high-level planning document that guides each UC campus’s decisions on land and infrastructure development) that would limit student enrollment. The court disagreed, finding that Good Neighbor did not meet its burden of demonstrating that the range of alternatives for the LRDP was manifestly unreasonable. The court reasoned that the Regents analyzed a sufficient range of alternatives that were tailored to the plan’s limited purpose and were not required to consider alternatives that would change the nature of the project.

Alternative Locations to People’s Park

Good Neighbor argued that the EIR failed to analyze locations other than People’s Park for the housing project. The court stated that an analysis of alternative sites is not required in all cases, but the Regents failed to provide a valid reason in the EIR for declining to analyze any alternative locations, as required in CEQA Guidelines, section 15126.6(c) and (f)(2)(B). The court rejected the EIR’s reasons for rejecting an alternative location proposal, which were that the alternative site would result in fewer new beds or require multiple sites and that an alternative site would not avoid adverse historical impacts. These reasons, the court found, were insufficiently vague and not supported by the record.  


Good Neighbor argued that the Regents improperly “piecemealed” the LRDP by limiting the scope geographically to the campus and neighboring properties and excluding several properties further away. The court rejected this argument, holding the Regents’ decision to develop a coherent vision for the campus through the LRDP while developing separate plans for more remote properties was consistent with the CEQA Guidelines, section 15168(a)(1).

Noise Impact Analysis

Good Neighbor argued that the EIR failed to analyze potential noise impacts from loud student parties in residential areas near the campus. The Regents argued that it was not required to analyze noise from student parties because it was “speculative to assume that an addition of students would generate substantial late night noise impacts simply because they are students.” The court rejected this argument, reasoning that the record indicated that noise from student parties in Berkeley’s residential neighborhoods near the campus was a longstanding problem and therefore “foreseeable.” Clarifying that “stereotypes, prejudice, and biased assumptions about people served by a CEQA Project—such as a church, school, gym, or housing project—are not substantial evidence that can support a CEQA claim under the fair argument standard,” the court held that “proper evidence” remained to support that noise from loud student parties was a potential impact and that such noise analysis must be included in the EIR.

Population Growth and Displacement Analysis

Good Neighbor contended that the EIR violated CEQA because it failed to address the impacts of population growth and the consequent displacement of existing residents. The court rejected this argument. It held that the record was insufficient to establish the chain of causation necessary to support Good Neighbor’s displacement theory, which was that population growth would lead to displacement of residents as a result of a housing shortage.  

Notably, the court backtracked from its conclusion in the draft tentative opinion, issued before oral argument took place, that the EIR was required to, and had failed to, consider whether displacement would trigger social or economic consequences that could cause significant environmental impacts.   

Attorneys from Perkins Coie presented the 33rd Annual Land Use and Development Law Briefing on January 31, 2023.

Topics included:

  • Key Developments in Land Use Law
  • Legislative Changes Impacting Housing
  • Real Estate Due Diligence
  • CEQA: Key Cases, Legislation and Trends
  • Climate Change and CEQA / CARB Scoping Plan
  • Wetlands and Endangered Species Update

A full set of the written materials, in pdf form, is available here: 33rd Annual Land Use and Development Law Briefing Materials

If you would like a bound, hard copy of the materials, please click here.

Selected materials from the presentation have also been posted on the California Land Use and Development Law Report website: