A state law that requires developers of housing within the coastal zone to provide low- and moderate-income units does not apply in instances where all of the actual dwelling units are built outside the zone. Constructing a road and utility lines in the coastal zone to serve new houses outside the zone is not enough to trigger the affordable housing requirement, the Second District Court of Appeal ruled.

The decision was the second published ruling regarding a controversial project in the City of Los Angeles that is split by the coastal zone boundary. In a different case, the Second District held that the Coastal Commission cannot consider the environmental impacts to areas inside the coastal zone that result from development proposed outside the zone. That case, Sierra Club v. California Coastal Com., (2003) 107 Cal.App. 4th 1030 (see CP&DR Legal Digest, June 2003), has since been accepted for review by the state Supreme Court.

The project that is causing the controversy is a 114-lot housing subdivision on 45-acres in Playa del Rey proposed by Catellus Residential Group. (Construction actually began this year.) The coastal zone boundary splits the parcel. Under the project that Los Angeles and the Coastal Commission ultimately approved, all of the houses would be built on 33 acres outside the coastal zone. Only a road, utilities and erosion control facilities would be built on a portion of the 12 acres inside the coastal zone.

The groups Coalition of Concerned Communities and Spirit of the Sage Council sued the city. They contended that the environmental impact report was inadequate and that the city violated Government Code §§ 65590 and 65590.1 — statutes that require housing developers in the coastal zone to provide affordable units “where feasible” in the coastal zone or elsewhere in the city.

Los Angeles County Superior Court Judge David Jaffe ruled for the city. The project opponents appealed but also lost at the First District, where a three-judge panel ruled 2-1 that the city did not violate the affordable housing provision. In the unpublished portion of its decision, the court unanimously upheld the EIR.

At issue was the definition of “new housing developments constructed within the coastal zone” as used in Government Code § 65590, subdivision (d). The two-justice majority found the term to be “ambiguous,” while the dissenting justice did not.

Writing for the court, Justice Richard Aldrich construed the key phrase to mean “new developments that include residential structures constructed within the coastal zone.”

“Our construction,” Aldrich wrote, “gives effect to each word of the phrase in the context of both the phrase and the statute as a whole, the clear purpose of which is to require the provision of affordable housing based on activities within the coastal zone.”

Thus, because Catellus proposed no actual homes inside the coastal zone, the affordable housing requirement did not apply, the court held.

In his dissent, Justice Walter Croskey centered on the term “housing developments.” He wrote: “After repeated references to ‘dwelling units’ and ‘residential structure’ earlier in the statute, subdivision (d) pointedly does not state that the affordable housing requirement applies only if there are ‘new dwelling units constructed within the coastal zone or only if there are ‘new residential structures constructed in the coastal zone.’ Rather, the statute employs a term that encompasses not only dwelling units and residential structures but the whole of an improved tract of land: ‘housing developments.’”

Croskey contended that if a “substantial part” of a housing development were constructed in the coastal zone, the affordable housing requirement was applicable. In this case, 2.3 acres of grading for a road, utilities and erosion control were a substantial part, he opined.

But the two-judge majority said Croskey’s standard was “amorphous” and provided “no clear direction.” Besides, the majority said, 2.3 acres of grading in a 45-acre project is not a “substantial part” of the project.

The Case:
Coalition of Concerned Communities, Inc. v. City of Los Angeles, No. B149092, 03 C.D.O.S. 8215. Filed September 8, 2003.
The Lawyers:
For Concerned Communities: Craig Sherman, (619) 702-7892.
For the city: Jack L. Brown, city attorney’s office, (213) 473-5502.