A Seismic Shift in Land Use Law?

Late last month, observers erupted in fury when San Francisco’s Board of Supervisors voted down a proposal to build nearly 500 new homes -- many affordable -- on a downtown site now being used for valet parking. The Board’s vote came short on the heels of a major Court of Appeal decision upholding the state’s Housing Accountability Act (HAA), which the Legislature has greatly strengthened in recent years. The HAA usually requires cities to approve housing projects that a reasonable person could deem compliant with applicable standards, even if other reasonable people might disagree.


San Francisco evaded the HAA by using a different law, the California Environmental Quality Act (CEQA), to put the downtown project on ice. Oakland and Sonoma have also used the same maneuver, albeit to much less fanfare. This presages an epic legal clash, which we shall explore in a four-post series for SLoG and a forthcoming law review essay. This post is the appetizer.


The HAA and the CEQA both have fair claims to being what legal scholars Bill Eskridge and John Ferejohn call “super-statutes.” As Eskridge and Ferejohn define it, a super-statute is a law that:


(1) seeks to establish a new normative or institutional framework for state policy and (2) over time does “stick” in the public culture such that (3) the super-statute and its institutional or normative principles have a broad effect on the law—including an effect beyond the four corners of the statute.


As we’ll explain in our next post, CEQA became super in the 1970s, thanks to a run of California Supreme Court decisions that construed it broadly so as to give, as the Court saw it, “the fullest possible protection” to the environment. The HAA began earning its stripes much more recently. The turning point came in 2017, when the Legislature dramatically strengthened the law and codified that it “be interpreted and implemented in a manner to afford the fullest possible weight to the interest of, and the approval and provision of, housing.”


The ostensible super-ness of the two statutes creates a predicament for courts and other actors, because CEQA and the HAA could not be more different in their basic institutional and normative principles. Consider this:


  • CEQA’s working premise is that “new construction” is bad for the environment. “Current environmental conditions” in the vicinity of a proposed project should be preserved if at all possible. By contrast, the HAA regards the construction of housing in urbanized areas as presumptively good for the environment. It opens with a legislative finding that local barriers to housing development cause “urban sprawl, excessive commuting, and air quality deterioration,” “undermining the state’s environmental and climate objectives.”


  • CEQA privileges slow, careful, deliberative evaluation of every possible environmental impact. If there is a “fair argument” that a project “may” have any significant local environmental impact, CEQA compels the preparation of an exhaustive environmental impact report (EIR). The HAA calls for speed. It requires cities to notify developers of any general plan or zoning standards a project violates soon after the project is submitted, and it stipulates that violations of the state’s Permit Streamlining Act shall be deemed violations of the HAA.


  • Courts in CEQA cases presume that cities act in good faith (unless the city shortcuts environmental review). When pertinent facts and empirical inferences are disputed, courts give deference to the city’s judgment. The HAA distrusts cities. It eliminates the traditional deference that courts gave to cities regarding a housing project’s compliance with local standards; it prevents cities from using discretionary standards to deny or reduce the density of a project; and it authorizes courts to order the approval of projects that were denied in bad faith.


So how will the HAA and CEQA fit together? On one view, CEQA must reign supreme, because a longstanding provision of the HAA states, “Nothing in this section shall be construed to relieve the local agency from complying with … the California Environmental Quality Act.”


But, as noted, the Legislature more recently proclaimed that the HAA “shall be interpreted and implemented in a manner to afford the fullest possible weight to the interest of, and the approval and provision of, housing.” Later posts in this series will argue that to achieve its stated purpose – to “meaningfully and effectively curb[] the capability of local governments to deny, reduce the density for, or render infeasible housing development projects” – the HAA must exert gravitational pull on CEQA. The alternative is a world in which cities would have virtually unfettered discretion to use CEQA to delay projects indefinitely, to force project proponents to pay for round after round of expensive environmental studies, and to encumber projects with costly “mitigation” requirements even if the project would be a big environmental win.


* * *


Our next piece in this series will recount the evolution of CEQA and the HAA, illustrating their respective claims to super-statute status. We will see that CEQA’s super-ness was revealed in part by its crushing of a pro-development precursor to the HAA, the Permit Streamlining Act.


Our third post will delve into the problem one of us has dubbed “CEQA-laundered project denial,” now exemplified by 469 Stevenson St. in San Francisco. The municipal strategy of using CEQA to evade the HAA exploits soft spots in CEQA and background principles of administrative law. We’ll argue, however, that the "super" HAA can provide a remedy, either directly or through its gravitational pull on CEQA and administrative law.


Our final piece will argue that the HAA ought to shape environmental impact analysis itself. Because CEQA only applies to discretionary governmental acts, environmental review for HAA-protected housing projects should consider only impacts caused by discretionary conditions of approval imposed by the city, not all of the impacts that result from adding new dwelling units to the site. This only makes sense: the latter are caused by state law (the HAA), not municipal discretion. Our HAA-informed gloss on the scope of CEQA review would eliminate substantial environmental reviews for the mine run of zoning-compliant housing projects.


Our scope-of-review proposal is consistent with CEQA’s first principles, but it would require jettisoning or substantially circumscribing several judicial precedents which have been incorporated into the official CEQA Guidelines. It’s up to the Governor and his appointees at the Office of Planning of Planning and Research and the Natural Resources Agency to decide whether to revise the Guidelines. If they do, and if the Legislature acquiesces, then the HAA will truly merit the moniker, “superstatute.” It will have “stuck in the public culture” and exerted “a broad effect on the law.”


But that is only one possible future. Another is that CEQA swallows the HAA, expelling more fodder for critics who’ve lampooned California’s symbolically liberal but operationally conservative politics. Stay tuned.

The authors write in their personal capacity. Nothing in these posts represent a position of the University of California or the U.S. District Court for the Northern District of California.