In Ruegg & Ellsworth v. City of Berkeley (2021) 63 Cal.App.5th 277, the First District Court of Appeal reversed the trial court’s denial of appellants’ petition filed after their application for ministerial approval of a mixed-use affordable housing development was denied under Government Code section 65913.4. Finding that the trial court improperly applied a deferential standard of review, the court held that the ministerial approval did not conflict with the City’s “home rule” authority over historic preservation or commercial uses and did not involve demolition of a historic structure that was placed on a historic register.
Background
In 2015, appellants submitted an application for a mixed-use development (the “Project”) in the City of Berkeley (the “City”). The Project is located in the West Berkeley Shellmound, an area designated as a City of Berkeley Landmark and listed in the California Register of Historical Resources. The Shellmound is a sacred burial ground from early native habitation and includes subsurface artifacts, but no above ground buildings or structures. In November 2016, the Berkeley Planning and Development Department (the “Department”) prepared a Draft Environmental Impact Report for the Project application, which concluded that the Project’s impacts on the Shellmound would be reduced to less-than-significant with mitigation measures.
On January 1, 2018, Senate Bill (“SB”) 35 went into effect, which added section 65913.4 to the Government Code. Section 65913.4 requires a streamlined ministerial approval process and an exemption from a conditional use permit for certain affordable housing projects when a locality has failed to provide its share of “regional housing needs, by income category.” In March 2018, appellants submitted an application pursuant to section 65913.4 for the development of 260 dwelling units, 50 percent of which would be “affordable to low-income households,” and retail space and parking. In April 2018, appellants asked the City to suspend processing of the use permit and California Environmental Quality Act documentation for the Project.
On June 5, 2018, the Department provided appellants with the required written response pursuant to section 65913.4, subdivision (b)(2), stating that SB 35 does not apply to the Project because it impinges on “legitimate municipal affairs”— the preservation of a designated City landmark. The Department nonetheless explained that several components of the application were inconsistent with the criteria for approval under section 65913.4. The Department denied the application for ministerial approval after appellants responded to each of the City’s points. Appellants subsequently filed suit.
The Court of Appeal’s Opinion
Demolition of a Historic Structure
The court determined that section 65913.4 is not a historical preservation statute and the term “structure” in section 65913.4, subdivision (a)(7)(C) does not include historical resources or sites. The court reasoned that section 65913.4 thus protects cultural resources differently from historic structures placed on a historic register; a project that threatens the former may obtain ministerial approval if there are no tribal objections, while the latter is ineligible for ministerial approval. While the court acknowledged that the Shellmound is an important historical and cultural resource, it concluded there is no evidence that it is a structure, let alone one that could be demolished by the Project.
Retroactive Application of AB 831’s Tribal Cultural Resource Protections
The court also refused to apply Assembly Bill (“AB”) 831’s tribal cultural resource protections retroactively to the Project application. It determined that the Legislature deliberatively allowed for some projects to proceed without tribal consultation to account for the interests of those who relied on section 65913.4 prior to AB 831’s effective date. The court held that it would be contrary to the Legislature’s intent and manifestly unfair to apply AB 831 retroactively.
The City’s “Home Rule” Authority Over Historic Preservation
Emphasizing the Legislature’s long history of frustration with local governments’ interference with addressing the statewide housing crisis, the court concluded that applying section 65913.4 would not interfere with the City’s “home rule” authority over historic preservation. Determining whether a matter falls within a charter city’s authority to govern itself free of state legislative intrusion requires the court to consider four issues: (1) whether the city ordinance at issue regulates an activity that can be characterized as a municipal affair; (2) whether there is an actual conflict between local and state law; (3) whether the state law addresses a matter of statewide concern; and (4) whether the law is reasonably related to resolution of that concern and narrowly tailored to avoid unnecessary interference in local governance.
The court dismissed the first three parts of the “home rule” test as essentially undisputed. As for the fourth part of the test, the court determined that section 65913.4 is reasonably related to resolving the statewide interest it addresses—affordable housing—and does not unduly interfere with the City’s historical preservation authority. Citing the legislative findings in Government Code section 65589.5, the court concluded that section 65913.4 is narrowly tailored because historical preservation is precisely the kind of subjective discretionary land use decision that the Legislature sought to prevent localities from using to defeat affordable housing development.
Applicability to Mixed-Use Developments
The court held that section 65913.4 applies to mixed-use development projects. The court rejected respondents’ argument that the statute is limited to projects located on sites that meet the minimum residential requirement for mixed-use developments, rather than the actual development that is the subject of the ministerial approval application. The court concluded that the Project at issue satisfied the two-thirds residential requirement, as it includes a residential area that would occupy 88 percent of the development space. The court further explained that regardless of whether the Project should be deemed consistent with this requirement, it is consistent with the standard due to the Department’s failure to timely raise any conflict with respect to the mixed-use aspect of the application in its letter.
The City’s “Home Rule” Authority to Regulate Commercial Uses
The court rejected respondents’ argument that applying section 65913.4 to mixed-use developments interferes with the City’s authority to regulate commercial uses. Applying the “home rule” test, the court found that any interference of section 65913.4 with the local regulation of commercial uses is minimal and incidental to the statute’s purpose of facilitating development of affordable housing. The court acknowledged that the overall Project would not be subject to a conditional use permit, but nothing in the statute permits ministerial approval of a Project with commercial uses that conflict with local zoning.
Conflict with the City’s AHMF and Traffic Capacity Requirements
The court also concluded that respondents’ Affordable Housing Mitigation Fee (“AHMF”) requirements and traffic zoning standards did not provide a sufficient basis for denial of ministerial approval. The court reasoned that the statewide interest served by section 65913.4 should not be defeated by the local AHMF ordinance, which requires a lower percentage of low-income housing than the Project involves. Additionally, the court determined that the traffic zoning standards did not constitute “objective standards” pursuant to section 65913.4 and the City failed to provide adequate written documentation of potential conflicts with any specific criterion for measuring traffic impacts.