Real Estate Law: Significant Case Law for California Attorneys

Real Estate Law: Significant Case Law for California Attorneys

Estimated reading time: 9 minutes

Real estate law is a dynamic field, constantly shaped by case law. These decisions not only influence current legal practices but also offer valuable lessons for legal practitioners. From the intricacies of property easements to the complexities of zoning laws, understanding new rulings and landmark cases from years past can help navigate the ever-evolving legal landscape. 

Make UC a Good Neighbor v. The Regents of the University of California (2024)

In a decision handed down this year by the California Supreme Court, plaintiffs, including the Make UC a Good Neighbor and People’s Park Historic District Advocacy Group, challenged the approval of UC Berkeley’s housing project at People’s Park, citing inadequacies in the Environmental Impact Report (EIR). They argued that the EIR did not sufficiently analyze the noise impacts from student activities and failed to consider alternative locations for the housing project.

The Court initially granted review on a broader swath of issues, but the passage of Assembly Bill 1307 during the appeal introduced new provisions to the Public Resources Code. This bill clarified that for residential projects, noise generated by occupants and their guests is not a significant environmental effect under the California Environmental Quality Act (CEQA). It also exempted public higher education institutions from considering alternative project locations under specific conditions. As a result, the Court reversed the previous judgment, holding that the new law applied retroactively to the case. The decision concluded that the EIR was not required to address the social noise impacts or alternative locations for the housing project.

Implications for Practitioners

Noise Impact Analysis: Under Assembly Bill 1307, residential projects are not required to analyze noise impacts from project occupants and guests. This reduces the scope of noise impact studies in EIRs for such projects.

Alternative Locations: Public higher education institutions are not obligated to consider alternative sites for residential projects if the project site is less than five acres and surrounded by urban uses. This streamlines the approval process for such developments.

CEQA Compliance: The ruling emphasizes the need for practitioners to stay current with legislative changes that may affect environmental review requirements. Adapting to these changes is crucial for compliance and successful project approval.

Legislative Influence: The case demonstrates how legislative actions can significantly alter the legal landscape and affect ongoing litigation. Practitioners should monitor legislative developments that could impact their cases or projects.

This case underscores the importance of understanding the interplay between environmental law and legislative changes, ensuring that practitioners can effectively navigate these dynamics in land use and development projects.

V Lions Farming, LLC v. County of Kern (2024)

Plaintiffs challenged Kern County’s ordinance that streamlined the permitting process for new oil and gas wells, arguing that the associated EIR failed to comply with CEQA. The primary issue on appeal was whether agricultural conservation easements (ACEs) could be considered effective mitigation for the conversion of agricultural land.

The Court of Appeal addressed whether ACEs qualify as compensatory mitigation under CEQA. The court concluded that while ACEs do not create new agricultural land or directly offset the conversion of agricultural land, they do qualify as compensatory mitigation. This interpretation aligns with CEQA’s long-term environmental protection goals, considering ACEs provide substitute resources by preserving existing agricultural land. Therefore, ACEs can be part of a broader strategy to mitigate agricultural land loss, even if they do not ensure a no net loss of farmland.

Implications for Practitioners

CEQA Compliance: Practitioners should recognize that ACEs can be valid mitigation measures under CEQA, even if they do not completely offset agricultural land conversion. This broadens the tools available for mitigating environmental impacts in development projects.

EIR Preparation: When preparing EIRs, practitioners must ensure that ACEs are appropriately evaluated and justified as part of the mitigation strategy. Detailed analysis demonstrating how ACEs contribute to environmental protection is essential.

Legislative Awareness: This case highlights the importance of staying informed about evolving interpretations of environmental regulations and judicial rulings that may influence project planning and approval processes.

Strategic Planning: Developers and legal advisors should consider integrating ACEs into their mitigation plans, balancing them with other measures to meet CEQA requirements effectively.

Legal Precedent: This decision sets a precedent for future cases involving land use and environmental impact mitigation, reinforcing the acceptability of ACEs within California’s regulatory framework.

California Building Industry Association v. City of San Jose (2015)

The City of San Jose adopted an inclusionary housing ordinance requiring developers of new residential projects with 20 or more units to allocate 15% of the units for affordable housing or to provide alternative means such as off-site affordable housing, in-lieu fees, or land dedication. The California Building Industry Association (CBIA) challenged the ordinance, arguing that it constituted an unconstitutional exaction, violating the takings clauses of the U.S. and California Constitutions. CBIA contended that the city failed to demonstrate a reasonable relationship between the ordinance’s requirements and the impact of new development on the need for affordable housing.

The California Supreme Court upheld the ordinance, ruling that the inclusionary housing requirements did not constitute an exaction. The court determined that the ordinance fell within the city’s police power to regulate land use for public welfare. It found that the conditions imposed by the ordinance were not “exactions” requiring the heightened scrutiny applicable to such cases but were a legitimate exercise of the city’s authority to address the critical shortage of affordable housing. The court emphasized that the ordinance aimed to integrate affordable housing throughout the city, promoting economically diverse communities.

Implications for Practitioners

Inclusionary Zoning Validity: The ruling affirms the validity of inclusionary zoning ordinances, reinforcing local governments’ ability to require affordable housing as part of new developments. Practitioners should advise developers on compliance strategies and the potential benefits of participating in such programs.

Municipal Authority: The decision highlights the broad authority of municipalities under their police power to enact land use regulations addressing public welfare issues, including affordable housing. Legal practitioners must consider this authority when advising clients on land use and zoning matters.

Legal Challenges: The case sets a precedent that inclusionary housing requirements are not considered exactions subject to the stricter scrutiny of takings claims. This reduces the likelihood of successful legal challenges against similar ordinances, making it crucial for practitioners to focus on compliance rather than contestation.

Policy Development: For policymakers, the decision provides a framework for developing and justifying inclusionary housing policies. Demonstrating a reasonable relationship between the ordinance’s requirements and public welfare goals will be essential to withstand legal scrutiny.

Affordable Housing Advocacy: The ruling supports advocacy efforts for affordable housing by validating legal mechanisms that ensure its inclusion in new residential developments, thus promoting socioeconomic diversity in urban planning.

This landmark decision underscores the importance of municipal regulations in addressing housing crises and sets a clear precedent for the implementation of inclusionary zoning policies across California.

Golden Door Properties, LLC v. County of San Diego (2020)

In Golden Door Properties, LLC v. County of San Diego, the plaintiffs challenged the County of San Diego’s Climate Action Plan (CAP) and related environmental documents under CEQA. The primary issue was the CAP’s use of a greenhouse gas (GHG) mitigation measure, M-GHG-1, which allowed development projects to mitigate in-County GHG emissions by purchasing carbon offsets originating elsewhere, including internationally. Plaintiffs argued that the CAP and the mitigation measure did not comply with CEQA requirements, lacked enforceable performance standards, and improperly deferred and delegated mitigation.

The California Court of Appeal held that the GHG mitigation measure M-GHG-1 violated CEQA because it contained unenforceable performance standards and improperly deferred and delegated mitigation. The court found that the CAP was not entirely inconsistent with the County’s general plan but held that the County abused its discretion in approving the CAP due to unsupported projections of additional GHG emissions from projects requiring general plan amendments. The Supplemental Environmental Impact Report (SEIR) was also found to be non-compliant with CEQA because it inadequately addressed cumulative impacts, consistency with the regional transportation plan, and failed to analyze a smart growth alternative.

Implications for Practitioners

Mitigation Measures: Practitioners must ensure that GHG mitigation measures included in environmental documents under CEQA are enforceable and do not improperly defer or delegate mitigation responsibilities. This case underscores the importance of developing clear, specific, and enforceable mitigation strategies.

Environmental Impact Analysis: The ruling highlights the necessity for comprehensive and accurate environmental impact analyses, especially regarding cumulative impacts and consistency with regional plans. Practitioners should ensure that environmental documents adequately address all potential impacts and explore feasible alternatives.

Consistency with General Plans: Local governments must ensure that their CAPs and related environmental documents are consistent with their general plans. This includes accurately projecting emissions and integrating mitigation measures that align with long-term planning goals.

Use of Offsets: The decision places limitations on the use of out-of-county or international carbon offsets for GHG mitigation under CEQA. Practitioners should prioritize local mitigation measures and ensure that any offsets used are verifiable and enforceable.

Judicial Review: The case illustrates the courts’ role in scrutinizing local government compliance with CEQA. Practitioners should prepare for rigorous judicial review by ensuring thorough documentation and adherence to CEQA standards in all planning and environmental review processes.

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