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. . . there’s something new on “Reverse CEQA.”  We discussed in a prior “Lay of the Land” post the Court of Appeal’s decision that the Bay Area Air Quality Management District cannot require an EIR simply because existing air contaminants may impact a project’s future users or residents. The Air District asked the Court of Appeal to reconsider its decision, arguing that it was improper to order the Air District to revise its thresholds to comply with the Supreme Court’s earlier holding that CEQA is ordinarily concerned with a project’s impact on the environment, and not the environment’s impact on the project.

On September 9, the Court of Appeal modified its published opinion to explain further why it rejected the Air District’s arguments. The Court held that the Air District’s thresholds of significance, which suggested a “routine analysis of whether new receptors will be exposed to specific amounts of toxic air contaminants,” needed to be revised “given the clarity of the Supreme Court’s decision that such an analysis oversteps the bounds of CEQA except in specified circumstances.”

The case will now return to the trial court for the issuance of a writ of mandate compelling revision of the thresholds.

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In a decision that should provide more certainty for the development of residential infill and transit-oriented projects, the Court of Appeal recently held that the California Environmental Quality Act (CEQA) “cannot be used by a lead agency to require a developer or other agency to obtain an EIR or implement mitigation measures solely because the occupants or users of a new project would be subjected to” contaminant levels above an air district’s thresholds of significance. Because residential infill and transit-oriented projects are often located near existing sources of air quality impacts (freeways, for example), this decision should help ensure that these much-needed housing projects don’t get mired unnecessarily in costly and time-consuming environmental review processes.

The California Supreme Court held last year in CBIA v BAAQMD that CEQA generally applies to a project’s impact on the environment, not the environment’s impact on the project.  While acknowledging that CEQA is concerned with human health, the Court agreed with the California Building Industry Association (CBIA) that CEQA’s relevant provisions “are best read to focus almost entirely on how projects affect the environment.” Stretching the definition of “environment” to include the future users of a project would allow CEQA to cover “nearly any effect a project has on a resident or user.” This led the Court to conclude that, generally, any requirement to analyze the “environment’s effects on a project” is invalid.

At the center of the litigation was the Bay Area Air Quality Management District’s “Receptor Thresholds” which sought to measure whether existing air quality issues would impact the future residents of new housing projects. CBIA and affordable housing advocates argued that the Receptor Thresholds discouraged infill housing close to transit because these projects are, by definition, located in urbanized areas where the air quality has already been impacted by existing development. Requiring projects to analyze and mitigate for existing impacts to which those projects did not contribute threatened to prevent much-needed infill development. After resolving the foundational question regarding the purpose of CEQA analysis, the Supreme Court remanded to the Court of Appeal the question of whether the Receptor Thresholds violated the general rule described in its opinion.

On August 12, 2016, the Court of Appeal determined that the Air District’s thresholds were “misleading to the extent they contemplate an application of the Receptor Thresholds to evaluate the effect of the existing environment on all new receptors as a matter of course. . . .”

Though the Court of Appeal identified specific circumstances where the Receptor Thresholds could be validly applied (e.g., in school siting decisions), the Court of Appeal warned that “any effort by an agency to require an EIR, mitigating measures, or other CEQA review under the Receptor Thresholds when one is not authorized would be subject to a strong legal challenge.”  To that end, the Court of Appeal held that the Receptor Thresholds cannot be used by a lead agency to require an EIR or to impose mitigation measures solely because the occupants or users of a new project would be subjected to contaminant levels above the Air District’s thresholds.

Existing air quality concerns can, of course, be addressed outside of CEQA. CBIA argued during the litigation that these sorts of concerns can be addressed through substantive rules and regulations. The Air District has recently gotten on board with this approach. The Air District finalized its “Planning Healthy Places” guidance document which recommends that local governments address existing air quality concerns through the Planning and Zoning Law. Planning Healthy Places provides an interactive map of where the Air District recommends projects implement best practices (e.g., air filters) and where, due to complex emissions sources, further air quality studies should be conducted. The Court of Appeal’s decision should result in cities and counties taking a more proactive, plan-level approach to addressing air quality concerns rather than the ad hoc approach previously recommended through the Air District’s Receptor Thresholds.

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The California Water Commission recently approved new emergency regulations for Groundwater Sustainability Plans (“GSPs”). In addition to substantially affecting groundwater management practices and procedures under California’s Sustainable Groundwater Management Act (“SGMA”), the new regulations are also likely to have a significant economic impact on current businesses and industries, as well as on future development projects.

The new emergency regulations will affect groundwater basins throughout California. SGMA provides a comprehensive approach to the sustainable management of groundwater basins through the development and implementation of GSPs or alternatives to GSPs. The Department of Water Resources has designated 127 groundwater basins as high or medium priority, accounting for approximately 96 percent of groundwater use in California. Although only high- and medium-priority basins are subject to SGMA, agencies overseeing the remaining basins, designated as low or very low priority, are encouraged and authorized to develop GSPs, update existing groundwater management plans, or coordinate with other agencies to develop new groundwater management plans.

The new regulations establish requirements for the development and maintenance of GSPs, such as specific monitoring protocols and standards for data and reporting, including the requirement to develop and maintain a data management system for storage and reporting of relevant information. The regulations outline procedures for submitting, withdrawing, and amending GSPs; notice and public comment requirements; annual reporting requirements to the Department of Water Resources; and initial and ongoing evaluation and assessment of GSPs by the Department. The regulations also authorize two types of interagency agreements: “interbasin agreements,” which allow two or more agencies to establish compatible sustainability goals, and “coordination agreements,” which allow two or more agencies to develop and implement multiple GSPs that utilize the same data and methodologies. Continue reading →

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Looking only at its name, the Fixing America’s Surface Transportation Act (FAST), a long-term funding bill adopted by Congress in late 2015, would seem to benefit only ground transportation projects. For the most part, FAST has been billed as a program that will deliver long-term funding certainty for surface transportation infrastructure investment.

FAST, however, does much more, providing “fast track” environmental review and federal permitting for major infrastructure projects, including renewable and conventional energy, surface transportation, aviation, ports and waterways, water resource projects, broadband, pipelines and other similar projects (those that involve a likely investment of more than $200 million). FAST is designed to increase transparency, require communication between federal agencies and project sponsors, force agencies to provide a timeline for review (and limit their ability to deviate from that timeline), and provide some limits for judicial review (shorter statute of limitations, exhaustion of administrative remedies, and additional findings for preliminary injunctions). The principal benefits of FAST include:

  • Increased Transparency and Agency Cooperation with a Central Online Tracking Database. FAST requires the establishment of a “permitting dashboard” for all covered projects. The permitting dashboard is a searchable online database that will provide the status and schedule of environmental review and permitting tasks for each agency for all the covered projects.
  • Coordinated Environmental Review and Permitting Plan and Schedule. A project must be placed on the permitting dashboard within two weeks of being identified on the inventory of covered projects. Within sixty days after a project is placed on the permitting dashboard, the lead agency must develop a plan for coordinating and completing the environmental review and permitting process. The plan must include a permanent timetable from which the agencies may deviate only under limited circumstances (written justification must be provided and there are limits on how long an extension can be granted). In addition, if a project sponsor requests a meeting to discuss the project, the review and permitting process, or the schedule, the federal agencies are required to meet with the sponsor within sixty days of that request. The lead agency has specific requirements to make relevant information available to other agencies and the project sponsor as early as possible.
  • Development of Project Alternatives. FAST requires the lead agency to engage the cooperating agencies and the public to determine the reasonable range of project alternatives. If an Environmental Impact Statement (EIS) is to be prepared, this process shall be completed no later than completion of scoping for the project. Ultimately, it is up to the lead agency to determine the reasonable range of alternatives.

Continue reading →

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The need for “reform” of the California Environmental Quality Act is acknowledged by development interests and environmental groups alike. The challenge is that these stakeholders have very different ideas of what that reform should look like.  As a result, despite the extraordinary costs of CEQA implementation and litigation, there appears to be little prospect for meaningful CEQA reform from the State Legislature. This article examines whether there is any prospect for meaningful CEQA “reform” from California’s Supreme Court.

California Supreme Court

The California Supreme Court

CEQA is 46 years old, yet CEQA litigation remains remarkably unpredictable. State and local agencies still cannot be confident that the courts will uphold their actions. The chances that an EIR will be upheld in court remain close to a coin-flip, even lower for a negative declaration. That level of uncertainty remains the great cost of CEQA—greater even than the enormous expense of trying to comply with CEQA.

In the first 40 years of CEQA, the California Supreme Court issued only about 40 decisions interpreting it. Then, a few years ago, the High Court started granting review in CEQA cases at an unprecedented pace. It rather quickly had nine cases on its docket for review. Many commentators speculated that the Court was going to undertake CEQA reform from the bench, perhaps recognizing that the Legislature seemed incapable of coalescing around any meaningful reform.

In the past year, the Court has issued four CEQA decisions, with five more pending. The early returns are mixed in terms of offering newfound certainty. But the Court will have several opportunities in the coming months and years to offer assistance to all participants in the CEQA process by resolving pending cases in a clear and decisive manner.

The Court considered various issues in its decisions over the past year. In Berkeley Hillside, it addressed the standard of review for categorical exemptions and adopted a somewhat tricky two-part test. It also held in City of San Diego v CSUSD that the state university system cannot limit its mitigation measures to those specifically funded by the Legislature, affirmed in Newhall Land that greenhouse gas (GHG) emission impacts can be measured against statewide GHG-reduction targets set out in AB 32, while at the same time finding the State’s GHG analysis lacking. In a key decision addressing  CEQA fundamentals, the Court held in CBIA v BAAQMD that CEQA generally applies to a project’s impact on the environment, not the environment’s impact on the project. While some might characterize this decision as “reform by court,” it really reflects a plain reading of the law, rather than reform. Continue reading →

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We previously shared with you the critical role that the late Justice Antonin Scalia played in landmark Supreme Court land use decisions. So now let’s look at how Judge Merrick Garland, President Obama’s current nominee for Justice Scalia’s seat, might shift the ideological leanings of the Court on environmental issues, if confirmed.

President Obama Introduces Judge Garland

President Obama Introduces Judge Garland

Although leading experts are still analyzing Garland’s past opinions to discern his potential influence on future Supreme Court environmental law decisions, there appears to be universal agreement that Garland’s addition would make the Court more likely to defer to agencies’ regulatory interpretations, rulemakings, and rule implementation. In particular, those legal analysts have found consistent deference to actions of the Environmental Protection Agency. As SCOTUSblog noted in 2010, “Judge Garland has in a number of cases favored contested EPA regulations and actions when challenged by industry, and in other cases he has accepted challenges brought by environmental groups.” Indeed, according to Bloomberg, one third of Garland’s dissents have been over challenges to agency decision-making. In all of those dissents, Garland sided with the agency.

UCLA Law Professor Ann Carlson analyzed three important Garland decisions, two majority opinions and one dissent. From these opinions, Professor Carlson deduced that Garland is likely to afford great respect to EPA’s judgment where that judgment is grounded in good science and the public interest. Carlson expects Garland to be likely to defer to the EPA or, where he rules against the EPA, to side with environmentalists on the grounds that the EPA has not gone far enough to enforce the law. Continue reading →

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Have you ever been required to have your Mitigated Negative Declaration (MND) or Environmental Impact Report (EIR) evaluate whether your project will be compatible with the “character of the community”? Recently, in a ruling involving a project in the City of Poway, a California Court of Appeal held that the evaluation of potential impacts of a project on “community character” is not required under CEQA unless those impacts are “aesthetic” in nature. The Court carefully distinguished potential aesthetic impacts from those “psychological and social factors” that make residents “feel good and at home.”

No horsing around with “community character.”

No horsing around with “community character.”

In 2013, the Poway City Council unanimously approved a project which would replace a horse boarding facility with twelve homes. An MND was prepared to evaluate the potential environmental impacts of the project. Project opponents asserted that an EIR was required because there was a “fair argument” that elimination of the horse boarding facility would, in the Court’s words, “have a significant impact on Poway’s horse-friendly ‘community character’ as the ‘City in the Country.” The City Council did not require an EIR. Instead the Council approved the project using the MND. Project opponents then sued, the trial court ruled in their favor, and the project applicant appealed.

In Preserve Poway v. City of Poway, the Court of Appeal noted that CEQA’s purpose is to evaluate existing physical conditions which may be affected by a proposed project. The Court carefully distinguished potential physical environmental impacts from potential economic and social impacts which do not cause physical changes and are not required to be reviewed under CEQA. With respect to the question of whether an EIR should have been prepared by the City of Poway, the Court examined the administrative record for substantial evidence to support a fair argument that a significant environmental effect would result from the project’s impact on community character. Continue reading →

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The California Supreme Court has scheduled oral argument on three land use and CEQA cases in early May in San Francisco. The Court has generally been moving to clear its calendar of pending CEQA and land use cases, of which there are many, but this is an unprecedented confluence of oral arguments on important cases. The three cases to be argued are as follows:

  • Property Reserve v Superior Court, Supreme Court Case No. S217738, scheduled for oral argument on Tuesday, May 3rd at 9:00 am. This case concerns whether requiring onsite geological or environmental testing is a physical taking of private property. The particular onsite testing at issue in this case is for the proposed twin tunnels project in the Delta.
  • Friends of the College of San Mateo College Gardens v. San Mateo County Community College District, Supreme Court Case No. S214061, scheduled for oral argument on Wednesday, May 4th at 9:00 am. This case concerns the legal standards that apply when an agency considers a further approval for a project that has already been reviewed under CEQA. The court will decide whether the decision to prepare a further EIR is subject to review under the deferential substantial evidence standard, as most cases have held, or whether the agency must first make a threshold determination whether there is a new project as a matter of law.
  • City of Perris v. Stamper, Supreme Court Case No. S213468, scheduled for oral argument on Thursday, May 5th at 9:00 am. This case concerns the determination of which issues are decided by a judge, and which issues are decided by a jury, in an eminent domain case. The specific issue is whether the constitutionality of a city’s dedication requirement is a legal issue, to be decided by a judge, or a factual issue, to be decided by the jury.

The decisions in these three cases should be issued by the court by late July or August.

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. . . The Corps’ Definition of Waters of the United States

From Clark Morrison:

Clark photoJustice Scalia’s passing may have an immediate impact on the Army Corps of Engineers’ expanded definition of “waters of the United States” under the Clean Water Act. Last October, the United States Court of Appeals for the Sixth Circuit issued a nationwide stay of the Corps’ new broader definition until the matter is fully litigated, citing skepticism over whether the Corps’ definition is scientifically supportable. Recently, the 6th Circuit decided that it will hear the entire case rather than returning it to the district courts for trial. So, we may see a ruling on this regulation much more quickly than we previously anticipated. Should this matter end up before the Supreme Court, it should be remembered that Justice Scalia was a staunch proponent of the idea that the Corps should not exercise jurisdiction over waters that are not truly navigable (e.g., “reasonably permanent flow”).

 

. . . Dueling Ballot Measures for Los Angeles

From Alex DeGood:

Two competing initiatives are currently gathering signatures in the City of Los Angeles for placement on the November 8 general election ballot. One, called “The Build Better LA Initiative,” is sponsored by a coalition of labor unions and housing advocates. The second, called the “Neighborhood Integrity Initiative,” is backed by the Coalition to Preserve LA. Both initiatives would have far-reaching implications for future development in Los Angeles.

What will proposed ballot measures do to LA's skyline?

What will proposed ballot measures do to LA’s skyline?

The Build Better LA Initiative would affect projects requiring general plan amendments or zone changes that permit additional floor area, density, or height. It contains inclusionary affordable housing requirements, mandating affordability for up to 25% of the units in rental projects and up to 40% of the units in for sale housing projects. Offsite affordable housing and the payment of a substantial affordable housing in lieu fee would be options in some instances. The initiative also would impose substantial union labor and local hire requirements on affected projects.

The Neighborhood Integrity Initiative appears to particularly target large development projects. It would impose a two-year moratorium on general plan amendments or zone changes that increase density or intensity. It also would require updating the general plan with various lower-growth principles and limit the City’s ability to approve parking reductions for projects.

Both initiatives take direct aim at the planning and development process in Los Angeles, and either one could dramatically alter development plans across the City.

 

. . . Inclusionary Rental Housing

From Steve Ryan and Tim Paone:

AB 2502 was introduced in the California Assembly on February 19 principally to offset the 2009 court decision in Palmer v. City of Los Angeles and allow local jurisdictions to impose, as a condition of project approval, rental units affordable to, and occupied by, tenants whose household incomes fall within the lower, very low, or extremely low categories. If adopted, AB 2502 also will apply to for sale residential developments. In 2013, Governor Brown vetoed similar legislation, noting that inclusionary rental requirements can “exacerbate” the challenges faced by low and middle income communities seeking to attract new development. That, however, occurred before the California Supreme Court’s ruling in California Building Industry Association v. City of San Jose upholding a City of San Jose ordinance requiring developers to include affordable units in their residential projects. The San Jose ordinance specifically stated that it would not apply to rental projects until either the Palmer decision was overturned by the courts or the Legislature authorized inclusionary rental housing. It will be worth watching to see if the Governor’s views on the potentially negative impacts of inclusionary housing requirements have changed since 2013.

 

. . . The Hiring of a New Executive Director for the Coastal Commission

From Tim Paone:

With the termination of Dr. Charles Lester as Executive Director of the California Coastal Commission, all eyes are on the CommBlack Hat-White Hatission’s selection of his replacement. Lost in the unfortunate characterization of Dr. Lester’s dismissal as a battle between developers and environmentalists was the Commission majority’s stated desire for a more efficient process. Shortly before the Commission hearing on Dr. Lester’s performance evaluation, former Commissioner Jana Zimmer had urged in an Op-Ed that appeared in the Santa Barbara Independent that a “black hat versus white hat” approach to the decision before the Commission was not productive. Given the prominence of the Executive Director position, there should be no shortage of candidates who are effective managers with strong integrity, have credibility with the environmental community, and don’t own either a white hat or a black hat.

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Justice Antonin Scalia Brought Us "Nexus"

Justice Antonin Scalia Brought Us “Nexus”

There likely is not a developer, city planner, or local elected official whose vocabulary does not include the word “nexus” when discussing the limitations on a public agency’s ability to exact concessions from developers. You can thank the late Supreme Court Justice Antonin Scalia for that. With the passing of Justice Scalia, there is lively dialogue over his successor’s potential influence on high profile issues such as abortion, gun control, and gay marriage.  Lost in that discussion is the potential for the next Justice to profoundly influence the Court’s land use and property rights decisions.  Here’s a quick look at Justice Scalia’s influence on the Court’s land use and property rights decisions over the past three decades.

Nine months after he was confirmed by the Senate on a 98-0 vote, Justice Scalia wrote the Court’s majority opinion in Nollan v California Coastal Commission, one of the most significant land use decisions of the last century.  For those of us actively representing landowners in California’s coastal zone at the time, our immediate reaction was that an overly zealous Coastal Commission had been chastised.  But Nollan meant much more than that.  In Nollan, the Coastal Commission had imposed a condition upon the demolition and replacement of a dilapidated beach bungalow requiring that a deed restriction be recorded to grant access to the public across a portion of the property.  The alleged reason for this condition was that the construction would limit “visual access” to the beach, thus creating a “psychological barrier” to physical access.

Justice Scalia wrote that “[i]t is quite impossible to understand how a requirement that people already on the public beaches be able to walk across the Nollans’ property reduces any obstacles to viewing the beach created by the new house.” Thus, the “essential nexus” between the reason for the condition and the very nature of the condition was lacking, resulting in a victory not only for the Nollans, but for California landowners for decades to come.  As noted by Justice Scalia in the opinion, the Nollan decision was “consistent with the approach taken by every other court that has considered the question, with the exception of the California state courts.”

Continue reading →