Building Industry Assn. v. City of Oceanside

• Decision Date: 19 July 1994
• Docket Number: No. D016581,D016581
• Citation: 33 Cal.Rptr.2d 137,27 Cal.App.4th 744
• Parties: BUILDING INDUSTRY ASSOCIATION OF SAN DIEGO, INC., Plaintiff and Appellant, v. CITY OF OCEANSIDE, Defendant and Respondent.
• Court: California Court of Appeals Court of Appeals

Page 137

33 Cal.Rptr.2d 137

27 Cal.App.4th 744

BUILDING INDUSTRY ASSOCIATION OF SAN DIEGO, INC., Plaintiff and Appellant, v. CITY OF OCEANSIDE, Defendant and Respondent.

No. D016581.

Court of Appeal, Fourth District, Division 1, California.

July 19, 1994.

Rehearing Denied Aug. 16, 1994.

Review Denied Oct. 13, 1994.

Worley, Schwartz, Garfield & Rice, and Donald R. Worley, San Diego, for plaintiff and appellant.

Daniel S. Hentschke, Acting City Atty., Myers, Widders & Gibson, Katherine E. Stone, and J. Roger Myers, Ventura, for defendant and respondent.

Pacific Legal Foundation, People for Affordable Housing, Ronald A. Zumbrun, James S. Burling and Edward J. Connor, Jr., Sacramento, as Amici Curiae on behalf of plaintiff and appellant.

HUFFMAN, Acting Presiding Justice.

This appeal by the Building Industry Association of San Diego, Inc., a California nonprofit corporation (BIA), presents questions as to the validity of a residential growth control initiative, Chapter 32A of the City of Oceanside Municipal Code, commonly known as Proposition A (Prop. A), adopted by the voters of the respondent City of Oceanside (the City or Oceanside). Actions for declaratory and other relief by BIA and Del Oro Hills (Del Oro), a partnership, the plaintiff in a related action (judgment in which was also appealed and is pending before this appellate panel), were consolidated below, with Del Oro adopting the BIA arguments as to the invalidity of Prop. A, and additionally asserting its own damages claims in further trial proceedings. The City obtained judgment in its favor in a three-phase court trial on BIA's complaint as to the validity of Prop. A; summary judgment was then rendered for the City against Del Oro. By stipulation, appeals of the judgments against BIA and Del Oro were consolidated for hearing by this court, although we have vacated the consolidation order for the sole purpose of issuing separate opinions in the two matters. (Del Oro Hills v. Oceanside (D017139, app. pending).)

We have concluded that the BIA judgment must be reversed because the trial court erred in its application of the doctrine of law of the case based upon this court's prior opinion in writ proceedings arising out of the trial court's denial of BIA's motion for summary adjudication on the issues of whether Prop. A conflicted with the City's general plan and with state planning and zoning law (Gov.Code, § 65000 et seq.). ¹ (Building Industry Assn. v. Superior Court (1989) 211 Cal.App.3d 277, 259 Cal.Rptr. 325 [hereafter Building Industry or prior opinion].) Moreover, under the standards set by Lesher Communications, Inc. v. City of Walnut Creek (1990) 52 Cal.3d 531, 277 Cal.Rptr. 1, 802 P.2d 317 (Lesher ), Prop. A is facially in conflict with the City's general plan and with state planning and zoning law. In light of this finding of conflict, we need not reach the issue presented as to the appropriate burden of proof on the City under Evidence Code section 669.5 (whether the City had to show that Prop. A bore a real and substantial relationship to the public welfare of the citizens of Oceanside, or rather that its provisions were "necessary" to protect the public welfare).

FACTUAL AND PROCEDURAL BACKGROUND

1. Adoption of Prop. A

Our prior opinion contains the following summary of the adoption and content of Prop. A, alternatively referred to as Chapter 32A:

"Ch. 32A, adopted by the Oceanside electorate in April 1987, declares one of its purposes is 'to augment the policies of the City as recorded in the General Plan and City ordinances relating to the regulation of residential development,' and '[i]n order to accomplish this purpose, the City must be able to control the rate, distribution, quality and economic level of proposed development on a year to year basis.' Ch. 32A adopts a 'Residential Development Control System' (RDCS) which, with what may be significant exceptions, adopts a maximum number of dwelling units to be constructed each year, called annual allotments. The allotments are 1,000 for 1987 and 800 for each year thereafter until December 31, 1999, with power granted to the City Council to modify the annual allotment by an amount no greater than 10 percent more or less for any given year and a requirement the annual allotment for a next succeeding year be adjusted higher or lower in order to redress any excess or deficit in the preceding year. Excepted from the RDCS are the following: '(a) Projects of not more than four residential dwellings, limited to only one such project per developer per calendar year.

" '(b) Fourplexes or less numbered multiple dwellings on a single existing lot.

" '(c) Single family residential units on a single existing lot.

" '(d) Rehabilitation or remodeling of an existing dwelling, or conversion of apartments to condominiums, so long as no additional dwelling units are created.

" '(e) Units within the legally designated redevelopment project area.

" '(f) Those specific Units which are formally dedicated for occupancy by low income persons or senior citizens pursuant to the provisions of applicable federal, state, or local laws or programs provided these types of units are spread equitably throughout the city and not concentrated in one neighborhood. For the purposes of this section, a project is funded or subsidized pursuant to applicable federal, state or local laws or programs if it receives a loan, grant or continuing financial subsidy for the purpose of developing low-income or senior citizen housing units. This section does not exempt low-income or senior citizen projects built with density bonuses or other development considerations under any program.

" '(g) Single family dwelling unit projects with lots an average of which are 10,000 square feet or better, which can achieve a minimum of 70% or better, of the maximum awardable points using the Residential Development Evaluation System are exempt.'

"Ch. 32A, in addition, provides for application, evaluation and award of development allotments which must be granted before a building permit may be issued." (Building Industry, supra, 211 Cal.App.3d at pp. 285-286, 259 Cal.Rptr. 325.)

Under Prop. A, projects are reviewed by a "Residential Development Evaluation Board" (the Board) made up of members of the City's planning commission, who evaluate proposed projects for their impact upon public facilities and services (the "A" criteria) and site and architectural quality (the "B" criteria). A project which does not receive a score of 51 percent on the "A" criteria and 70 percent on the "B" criteria is eliminated from consideration for an annual allocation. The Board's recommendations are forwarded to the City Council, which makes the annual allocations. ²

2. Oceanside's Land Use Regulation

At the time Prop. A was adopted, there were a number of existing land use regulations in place in the City. Since 1982, the City had had an interim growth management element (IGME) as an element of its general plan, requiring projects with negative fiscal impacts to be approved only by a supermajority of the planning commission and city council, and only if there were offsetting benefits. Since 1979, the City's general plan had a public facilities and management element (PFME), which stated as its objective "[t]o influence the timing of development and to direct it to those locations within the City that avoid or minimize any adverse fiscal, economic, social or environmental impacts." The PFME divided the City into four areas and gave priority to development in those areas where adequate services were available. The PFME stated a policy of avoiding "direct controls on the number or location of new housing units built...." Neither the IGME nor the PFME gave the City the power to regulate the rate, timing or sequencing of development. ³

The PFME used the method of planning for growth by encouraging assessment districts and impact fees. The PFME was adopted by the City in light of a compound annual growth rate of 6.3 percent since 1970. An environmental impact report (EIR) for the PFME states that development was expected to continue in the range of 900 to 2,000 housing units per year through 1995, a range of 2.9 to 7 percent compound annual growth through 1995. The EIR for the PFME points out that that measure rejected the use of a point system, such as would later be used in Prop. A, with the explanation that "[p]oint systems usually are flawed by the potential for a high score for one service to offset a low score for another" and on the theory that "the problem of adding apples and oranges and then considering only the total is difficult to avoid." The EIR also rejected a "periodic comparative evaluation" system, such as Prop. A would later adopt.

In 1986, the year before Prop. A was adopted, the city council adopted a new land use element (LUE) of the general plan, setting forth the city's long-term goals, objectives, and policies for development. The LUE calls for but does not establish a timing mechanism to regulate residential development. At the time the LUE was adopted, the City recognized the PFME had not solved all the City's growth-related problems. However, no official City action had been taken to invalidate the PFME.

3. The City's Growth Status as of 1987

In the 1970's, the City's growth rate had reached 8.94 percent per year. While the City's population grew by 89.4 percent from 1970 to 1980, the County's population increased by 37.1 percent. The growth rate as of 1987 was 5 percent annual population increase, equivalent to 60 percent growth if sustained for a decade. The City's expert witness, Dr. Myers, a professor of urban and regional planning, testified that a 1 percent growth rate is normal, and 2 percent per year or 25 percent per decade is a healthy growth rate. In his opinion, at 40 percent growth per decade, it is difficult to "keep up" with a city's growing population. "[W]ith rapid growth the needs escalate[ ] and you are...