United States: California Appellate Court Upholds Negative Declaration For County "Up-Zoning" Ordinance

Bradley Brownlow is a Partner for Holland & Knight's San Francisco office.

Aptos Council v. County of Santa Cruz ruling also clarifies CEQA "Piecemeal" Doctrine

HIGHLIGHTS:

  • The Sixth District Court of Appeal's recent decision in Aptos Council v. County of Santa Cruz provides useful California Environmental Quality Act (CEQA) guidance to lead agencies considering legislation that would relax existing land-use restrictions on new development.
  • Under Aptos Council, CEQA requires a lead agency to evaluate the potential impacts of future development under a new regulatory regime only if there is substantial evidence in the record that future development is reasonably foreseeable. In the absence of such evidence, a lead agency need not evaluate the impacts of future development prior to adopting the new regulations, provided it adequately investigates whether such development is likely to occur.
  • Aptos Council also clarifies application of CEQA's "piecemeal review" doctrine in the context of zoning ordinance amendments.

Spurred in part by a desire to reduce vehicle miles traveled and corresponding greenhouse-gas emissions, many local agencies are in the process of revising zoning ordinances and land use regulations to relax restrictions on high-density projects near job centers and transit corridors. In Aptos Council v. County of Santa Cruz, published on March 30, 2017, California's Sixth District Court of Appeal upheld, under the non-deferential "fair argument" standard of review, a negative declaration prepared for an ordinance that "up-zoned" property to allow for higher-density hotel development with reduced parking. Notably, the court held that the California Environmental Quality Act (CEQA) does not require a lead agency to analyze the potential environmental effects of future development authorized by relaxed land-use restrictions in the absence of substantial evidence that future development is reasonably foreseeable. This case thus provides important guidance to local agencies regarding the extent of environmental review required for zoning amendments that increase density and reduce barriers to growth. This case also holds that a lead agency does not engage in improper "piecemeal" environmental review when it treats multiple zoning amendments as separate CEQA projects when such amendments operate independently and each serves a unique legislative purpose.

Case Background

At issue in Aptos Council were three ordinances adopted by the Santa Cruz County Board of Supervisors as part of a long-range "regulatory reform" process first proposed by the planning department in 2010 to modernize, clarify and streamline county development standards and permit requirements. Ordinance 5181, adopted in January 2014, expands application of previously adopted "minor exceptions" to certain development standards and setback requirements with an administrative permit approval. The second ordinance, Ordinance 5171, also adopted in January 2014, relaxes the county's hotel room density restrictions, hotel parking requirements and hotel height limitations. The third, Ordinance 5172, adopted in March 2014, eliminates certain variance and public hearing requirements for exceptions to the county sign standards and authorizes administrative approval of such exceptions with public notice.

For purposes of CEQA compliance, the county processed the ordinances as three separate "projects" and pursued different compliance pathways for each. For Ordinance 5181, the county prepared an addendum to a 2010 negative declaration for a previously approved zoning amendment that established the "minor exceptions" extended by Ordinance 5181. For Ordinance No. 5171, the county adopted a new negative declaration that determined the ordinance would not cause a significant effect on the environment. For Ordinance 5172, the county relied on various statutory and categorical CEQA exemptions.

Following adoption of Ordinance 5172, Aptos Council, an unincorporated community organization, sought a writ of mandate in the trial court, claiming that 1) the negative declaration for Ordinance 5717 was inadequate under CEQA, and 2) the county engaged in "piecemeal" environmental review by treating the ordinances as three separate CEQA projects. The trial court denied the writ petition on all grounds and the Court of Appeal affirmed.

Court Upholds Negative Declaration Under "Fair Argument" Standard

The court rejected the appellant's argument that the negative declaration prepared for Ordinance 5171 was inadequate. As discussed above, Ordinance 5171 relaxes the county's hotel room density restrictions, hotel parking requirements and hotel height limits. The negative declaration and its corresponding initial study determined that the ordinance could increase the number of county hotel rooms with fewer parking spaces, and would allow four-story hotels in areas previously zoned for three-story structures. Nevertheless, the negative declaration determined that the project would not cause any significant environmental effects because its regulatory text amendments would have no direct impact, and the potential indirect impacts resulting from future hotel development under the ordinance were presently unknown and would be subject to future discretionary approval and CEQA review.

On appeal, the appellant argued that the negative declaration violated CEQA because it failed to evaluate impacts associated with future hotel uses approved under Ordinance 5717, citing CEQA case law that generally requires such analysis for projects that reduce barriers to future development. In rejecting the appellant's argument, the court acknowledged that negative declarations are subject to the non-deferential "fair argument" standard of judicial review, which requires preparation of a full environmental impact report when there is substantial record evidence to support a fair argument that a project may cause a significant environmental effect. However, the court held that its "initial inquiry is not whether a fair argument that a significant environmental impact may result from the project exists; rather, it is whether the negative declaration and corresponding initial study should have taken into account the impacts of future development."

The court held that CEQA only requires consideration of "reasonably foreseeable indirect physical changes in the environment which may be caused by the project" and that "[a] change which is speculative or unlikely to occur is not reasonably foreseeable," citing CEQA Guideline § 15064 (emphasis added). The court explained that the county investigated the potential for hotel development under the ordinance by conducting an inventory of available development sites and interviewing the owners of such sites to determine whether they had any plans for hotel development. Since the county's investigation determined that no hotel development was presently being proposed, as demonstrated by the administrative record, the court held that the environmental review of hypothetical, unspecified hotel projects under the ordinance would be a speculative exercise that is not required by CEQA.

The court distinguished case law cited by appellants on the basis that, in those cases, there was substantial record evidence the projects would result in reasonably foreseeable development, or that the lead agency failed to investigate the likelihood of such development. The Aptos Council administrative record contained no such evidence and the court thus determined that the appellant's reliance on the cited cases was misplaced. Since the appellant could not point to evidence in the record demonstrating that Ordinance 5717 would cause reasonably foreseeable hotel development, and could thus only speculate as to its potential impact on the environment, the court held that the appellant failed to adequately support its "fair argument" claim and upheld the negative declaration.

Court Rejects Appellant's CEQA "Piecemeal Review" Argument

The appellant also argued that the county violated CEQA when it treated each of the challenged ordinances as separate projects for the purposes of environmental review. According to the appellant, each of the ordinances furthered a single legislative purpose – i.e., overhauling the county zoning code per the regulatory reform effort first proposed in 2010 – and thus should have been considered a single "project" for purposes of environmental review. The court soundly rejected this argument, relying principally on Laurel Heights Improvement Association v. Regents of the University of California (1988) 47 Cal.3d 376, 390 (Laurel Heights).

Per CEQA Guideline §15378(a), the term "project" means the "whole of an action, which has the potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect change in the environment" (emphasis added). This broad definition is intended to avoid so-called "piecemeal" environmental review whereby a large project with significant adverse effects is partitioned into several small projects, each with nominal adverse environmental effects, thereby masking the true environmental consequences of the whole action. Consistent with this principle, the Laurel Heights court held that a CEQA document "must include an analysis of the environmental effects of future expansion or other action if (1) it is reasonably foreseeable consequence of the initial project; and (2) the future expansion or action will be significant in that it will likely change the scope and nature of the initial project or its environmental effects."

The court acknowledged evidence in the record that the challenged ordinances were adopted as part of the county's overall regulatory reform program. Nevertheless, it held that, under Laurel Heights, the county had not engaged in piecemeal review of their environmental effects because amending certain zoning requirements, such as those regulating hotel height and parking, is not a reasonably foreseeable consequence of amending different zoning requirements, such as those regulating signs and minor exceptions. According to the court, even if the challenged ordinances can be characterized as part of the county's larger regulatory reform effort, they each serve a different purpose. Since each ordinance operates independently of the others, their respective environmental consequences can be independently reviewed without violating CEQA.

Conclusion

This case provides useful guidance to lead agencies considering legislation that would relax existing restrictions on new development. Under Aptos Council, CEQA requires a lead agency to evaluate the potential impacts of future development under a new regulatory regime only if there is substantial evidence in the record that such development is reasonably foreseeable. In the absence of such evidence, a lead agency need not evaluate the impacts of future development at the time it adopts the new regulations, provided it adequately investigates whether such development is likely to occur and documents the investigation findings in the administrative record. By clarifying CEQA's "piecemeal review" doctrine in the context of zoning amendments, this case also provides welcome guidance to local agencies who wish to update their zoning codes in a comprehensive manner, but on an intermittent schedule. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions