Published On: December 4th, 2018 / Categories: general plan, land use /

For regular readers of this blog, California land use matters are a frequent offering on our legal menu. These topics have ranged from grand-scale theories to seemingly trifling notions. Yet despite their variety, these issues all have significance to someone or another, demonstrating the nugget of truth behind the cliché, “All politics are local.”

One of the thornier fields of this region of California law can be located at the intersection between the regulation of land use matters by government and the direct enactment of land use laws by the electorate through the exercise of the referendum and initiative powers. As this power is guarded jealously by both camps, disputes are inevitable. Recently, the California Supreme Court had the opportunity to weigh in on these competing concerns in a case arising in Morgan Hill out of efforts by a landowner to develop a hotel on a vacant lot there, but may have created more confusion instead.

In 2014, the City of Morgan Hill (the “City”) amended its general plan to change the land use designation of a vacant lot from “Industrial” to “Commercial” to allow the landowner to develop a hotel on that site. The following year, the City amended the zoning designation from “ML-Light Industrial” to “CG-General Commercial,” but shortly thereafter, a referendum petition was successfully circulated to challenge the zoning change. After initially certifying the referendum, the City discontinued processing it on the ground that it would enact zoning that would render the ordinance inconsistent with the general plan, contrary to California Government Code Section 65860(a), which requires zoning ordinances to be consistent with the general plan.

Amid a variety of legal maneuvers, the City placed the referendum on the ballot in 2016, but filed a petition for a writ of mandate against the county registrar of voters and the city clerk seeking to remove the referendum from the ballot and certify the amended zoning ordinance. The trial court ruled in favor of the City, citing the Fourth District case of deBotarri v. City of Norco (1985) 171 Cal.App.3d 1204, for the proposition that a referendum shall be invalid if it would enact a zoning ordinance that would be inconsistent with the applicable general plan. On appeal, the Sixth District reversed the trial court in City of Morgan Hill v. Bushey (2017) 12 Cal.App.5th 34, specifically disagreeing with the holding in deBotarri and asserting that a referendum setting aside a zoning change would be valid where the City could adopt another zoning designation consistent with the general plan in a “reasonable time.” The California Supreme Court then accepted the case for review in order to address the split in the courts of appeal.

The Supreme Court affirmed the Sixth District, ruling that a referendum petition may be used to challenge a zoning ordinance amendment intended to make a city’s zoning consistent with its general plan, even if there are no existing zoning designations that are consistent with the general plan, as long as the city could create new zoning designations or revise the general plan to create such consistency. The Court found the referendum would not “revive” the original inconsistent zoning ordinance, which would be in violation of Government Code Section 65860(a), but would instead nullify the amended zoning ordinance as though it never existed, which would then allow the City, pursuant to Government Code Section 65860(c), which permits a city to amend its zoning ordinance within a “reasonable time” to make it consistent with the general plan, to further amend its zoning ordinance.

In adopting this reasoning, the Court disapproved and distinguished deBotarri and the line of cases thereunder as failing to acknowledge the authority granted by Government Code Section 65860(c) to harmonize an inconsistent zoning ordinance with the general plan. The Court also noted with approval the rationale adopted by the Sixth District in the appeal of this case, and followed in Save Lafayette v. City of Lafayette (2018) 20 Cal.App.5th 657, to employ Section 65860(c)’s exception to the consistency requirement of Section 65860(a). Further, the Court recognized the power of the voters to adopt land use policy through the power of initiative and referendum, as upheld in DeVita v. County of Napa (1995) 9 Cal.4th 763, which power should be rigorously protected and not be lightly disregarded. Finally, the Court vacated the Court of Appeal’s judgment and sent the case back to the Sixth District with instructions to remand the case to the trial court to determine what other zoning designations are available and what is a “reasonable time” in which to adopt such a designation.

While the Supreme Court found that the electorate can set land use policy through the power of initiative and referendum, the manner in which that power can be exercised may create uncertainty for developers who seek to rely on local land use policies. This ruling may allow for increased risks of delay or defeat for development projects, by allowing project opponents to use the referendum or initiative powers to delay or derail projects that have been previously been greenlighted. Only time will tell how these powers will be used.

The case is City of Morgan Hill v. Bushey, et al. (Aug. 23, 2018), Case No. S243042.

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