Tag: Class 32 Exemption

SECOND DISTRICT HOLDS HOUSING PROJECT DOES NOT QUALIFY FOR CLASS 32 IN-FILL EXEMPTION BECAUSE OF INCONSISTENCIES WITH GENERAL PLAN POLICIES

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In United Neighborhoods for Los Angeles v. City of Los Angeles (2023) 93 Cal.App.5th 1074, the court held that the City of Los Angeles failed to consider the project’s consistency with the general plan’s applicable housing element polices, and that the challenging petitioner group sufficiently exhausted its administrative remedies regarding the inconsistencies by contesting the project’s consistency with the housing element’s general goals, without referencing the specific policies.

 Background

The City approved a project that would replace 40 apartment units subject to the City’s rent stabilization ordinance with a 156-room hotel, and determined the project was exempt from CEQA pursuant to the Class 32 in-fill exemption. United Neighborhoods for Los Angeles sought a writ of mandate arguing that the in-fill exemption does not apply because the project is not consistent with a general plan policy regarding the preservation of affordable housing. The trial court granted the writ, halting the project pending CEQA review or the City making a finding that the project is consistent with the policy at issue. The City appealed.

Court of Appeal’s Opinion

Exhaustion

The court concluded that United Neighborhoods exhausted its administrative remedies because its comments that the project’s demolition of the rent stabilized apartment units would conflict with the first goal of the housing element were sufficient to apprise the City of the issues raised in litigation. The court explained that United Neighborhoods’s references to the housing element’s general goals, rather than its specific policies, was immaterial because a general plan is structured in such a way that a project that is inconsistent with housing element goals will also conflict with the housing element policies. Moreover, the court found United Neighborhoods’s objection concerned multiple housing element policies relating to the preservation of, as opposed to the production of, affordable housing, and was therefore sufficient to apprise the City of the policies that United Neighborhoods’s objection implicated. Finally, the court emphasized that the City expressly acknowledged that United Neighborhoods’s objection was that the project’s removal of the apartment units would conflict with the housing element.

Consistency with General Plan Policies

The court held that substantial evidence does not support the City’s determination that the housing element policies are inapplicable, and that the City did not consider the project’s consistency with the applicable policies.

First, the court explained that the housing element policies are applicable to the project because the project will have an impact on the preservation of housing reflected in several of the housing element’s goals, objectives, and policies. The court found that the City focused only on the portions of the housing element that related to the production of new housing.

The court also rejected the City’s argument that “affordable housing” is a term of art that does not include rent stabilized housing units. The court explained that nothing in the housing element suggests that “affordable housing” is a term that deviates from its ordinary meaning, and therefore must refer to the dictionary definition: “housing that can be afforded by those on low or median incomes; spec. housing made available to those on lower incomes at a price below normal market value, as the result of legislation or subsidy by a local authority or the state.” Accordingly, the court determined that rent stabilized units are a form of “affordable housing” because they prohibit landlords from raising rents to reflect normal market value under certain circumstances. While the court acknowledged that deference is typically given to an agency’s finding of consistency with its own general plan, such deference is not given with respect to the City’s determination of which policies apply to the project.

Second, the court rejected the City’s argument that its consideration of the project’s consistency with the housing element can be inferred from its express discussion of other related policies. The court explained that the other policies that the City expressly discussed did not mention affordable housing and were less specific than the housing element policies.

The court was also not persuaded that the City’s conditional approval of the project on compliance with the Ellis Act—a requirement in the housing element—implied that it considered applicable housing element policies. It explained that the conditions of approval indicated that the Ellis Act condition is derived from the City’s Municipal Code, and therefore does not demonstrate the City’s consideration of the housing element policies.

While the court emphasized that the City was not required to make formal findings that housing element policies are outweighed by competing polices favoring the project, or that such a decision would necessarily conflict with the general plan, it concluded that a court cannot defer to the City’s weighing and balancing of general plan policies without supporting evidence that the City did weigh and balance all applicable policies.

Therefore, because the Class 32 in-fill exemption requires consistency with all applicable general plan policies, the court upheld the trial court’s determination that the City’s application of the exemption was unlawful.

Fourth District Upholds City of Tustin’s Reliance on CEQA’s Infill Exemption for a Costco Gas Station and Parking Lot

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In Protect Tustin Ranch v. City of Tustin (2021) 70 Cal.App.5th 951, Division Three of the Fourth District Court of Appeal upheld the City of Tustin’s reliance on CEQAs’ categorical exemption for infill projects, holding that the petitioner failed to show that the project did not meet the requirements for the exemption or that an exception to the exemption applied.

Background

This case involves a proposal by Costco Wholesale Corporation to build a gas station next to an existing Costco warehouse in the Tustin Ranch area of the City of Tustin. The project site is already developed with a shopping center and is surrounded by commercial uses, as well as some residential development.

The project includes two components: (1) a 16-pump gas station with a canopy and landscaping, and (2) the demolition of an existing Goodyear Tire Center and parking lot, which would be replaced with a new 56-stall parking lot.

The planning commission voted to approve the project and adopted a resolution finding that the project is categorically exempt from CEQA under CEQA Guidelines section 15332 (Class 32, Infill Development Projects).

Members of the public appealed the planning commission’s decision to the city council. The staff report for the city council hearing explained why staff believed the project fell within the infill exemption. It also explained that, although Costco’s initial application indicated that the project site is 11.97 acres, the project site (i.e., the portion of the site to be developed) is actually only 2.38 acres.

The city council agreed with the planning commission and staff that the project is exempt under the infill exemption. The city council adopted a resolution finding the project categorically exempt and approved the project. In doing so, the city council expressly found that the project did not present any unusual circumstances as compared to other projects that would qualify for the exemption.

The trial court upheld the city’s determination that the project is categorically exempt from CEQA review. Petitioner appealed.

The Court of Appeal’s Decision

To qualify for the Class 32 infill exemption, a project must meet five criteria: (1) the project must be consistent with the general plan and with the zoning code, including all applicable general plan policies and zoning regulations; (2) the project must be located within city limits on a site that is no larger than five acres and is surrounded by urban uses; (3) the site must have no value as habitat for special-status species; (4) approval of the project must not cause any significant impacts related to air quality, noise, traffic, or water quality, and (5) the site must be adequately served by utilities and public services. (CEQA Guidelines, § 15332.)

Petitioner challenged the city’s reliance on the infill exemption only with respect to the size of the project, arguing that the project does not qualify for the exemption because the project site is larger than five acres. The court explained that the city’s conclusion that the project site is five acres or less is a factual determination to which the court applies the deferential “substantial evidence” standard of review. Under this standard, the court does not weigh conflicting evidence. Rather, the court must uphold the agency’s determination if it is supported by any substantial evidence in the record as a whole. In the case before it, explained the court, multiple documents in the administrative record confirmed that the size of the project site is 2.38 acres. For instance, Costco’s revised development application states that the “area of work” would be 2.38 acres, inclusive of the new gas station and parking at the demolished Goodyear site. A water quality management plan and maps of the project also showed that the site is 2.38 acres.  Additionally, at the city council’s hearing on the project, city staff clarified that the total project site was calculated by adding together the acreages of both components of the project—1.74 acres for the gas station and 0.64 acres of new surface parking where the Goodyear center would be demolished. Thus, held the court, substantial evidence supports the city’s determination that the project fits within the requirements of the infill exemption.

The court next considered whether the “unusual circumstances” exception to the categorical exemption applies. CEQA Guidelines section 15300.2, subdivision (c), provides that “[a] categorical exemption shall not be used for an activity where there is a reasonable possibility that the activity will have a significant effect on the environment due to unusual circumstances.” If a project meets the requirements of a categorical exemption, the burden is on the party challenging the exemption to produce evidence supporting an exception. The Supreme Court, in Berkeley Hillside Preservation v. City of Berkeley (2015) 60 Cal.4th 1086, explained that this showing may be made in two ways. First, the challenger may identify evidence that the project will have a significant environmental impact. Alternatively, the challenger may show that the project is unusual because its features distinguish it from others in the exempt class, and that there is a “reasonable possibility” that the project will result in a significant environmental impact due to that unusual circumstance. The substantial evidence standard applies to an agency’s determination that there are no unusual circumstances. But the less deferential “fair argument” standard applies to the question of whether there is a reasonable possibility that the unusual circumstances may cause a significant effect.

Petitioner argued that the unusual circumstances exception applied for three reasons. First, the project is located on a former Goodyear Tire Center where tires were installed and oil and other fluids were changed. Second, the proposed gasoline fueling station with 16 pumps is unusually large. And third, Costco proposed to re-route traffic during peak hours. The court summarily rejected these arguments, however, because petitioner had failed to explain why these features made the project unusual compared to other projects qualifying for the infill and exemption. In fact, evidence in the record showed that the project is similar to other Costco gas stations in California and is not unusually large—as evidenced by the fact that the project is less than five acres in size. The court went so far as to question whether the size of a project can be a characteristic that makes an otherwise exempt infill project unusual, since the infill exemption is expressly limited to projects less than five acres in size.

Petitioner further argued that the city’s reliance on the exemption was improper because the city should undertake studies to determine whether the project would contaminate soils. The court rejected this argument, however, explaining that unsupported assumptions and speculation are not enough to require the city to conduct CEQA review. By law, a categorically exempt project is deemed not to have potentially significant impacts unless the project’s administrative record shows that an exception to the exemption applies. Here, petitioner failed to show an exception applies. The fact that the project may have a significant environmental impact is not a sufficient basis to require CEQA review for a categorically exempt project.

Implications

This case highlights the standard of review that the courts will apply to an agency’s determination that a project is categorically exempt from CEQA. The burden of showing that the “unusual circumstances” exception applies is on the petitioner. In this case, the petitioner did not offer any concrete reasons or evidence showing that the project is distinct from other projects qualifying for the in-fill exemption. Therefore, the court upheld the city’s reliance on the exemption.