In a brief – and somewhat odd – opinion filed April 22, and belatedly ordered partially published on May 20, 2016, the Fourth District Court of Appeal reversed a trial court judgment denying a petition for writ of mandate challenging a General Plan Amendment (GPA) adopted by the City of Palm Springs as categorically exempt from CEQA. People for Proper Planning v. City of Palm Springs (4th Dist., Div. 2, 2016) ____ Cal.App.4th _______, 2016 WL 1633062, Case No. E062725. The Court held the trial court erred in upholding the City’s positions that the GPA, which eliminated minimum density requirements for all residential land use categories, was exempt from CEQA review under the Class 5 categorical exemption and because it allegedly did not change the environmental “baseline,” i.e., the City’s alleged preexisting practice of ignoring the General Plan’s minimum density provisions (and, hence, its allowable density ranges) when acting on residential development applications. In light of its CEQA ruling requiring reversal and further environmental (and necessarily General Plan consistency) analyses by the City, the Court held that it need not reach appellant PFPP’s other arguments that the GPA rendered the General Plan internally inconsistent, and violated statutory requirements that City accommodate its fair share of regional housing needs for all income levels.

Relevant Background Facts

Prior to City’s September 24, 2013 adoption of Resolution No. 23415 enacting the GPA, its General Plan designated minimum and maximum densities of residential units for certain land use categories, e.g., its high density designation allowed for a range of 15.1 to 30 dwelling units per acre, and its medium density designation allowed for a range of 6.1 to 15 units per acre. In describing its residential designations’ “range of allowable densities,” the General Plan described the “maximum density” as the “maximum number of dwelling units … allowed” and the “lower threshold figure” as a “minimum amount of development anticipated, provided that all other required conditions can be met.” The EIR for the City’s 2007 General Plan update contained land use element policies to “[e]ncourage, where appropriate, high density projects to maximize the use of land” and housing element policies to encourage a broad range of housing opportunities and types. It recognized that Government Code § 65863 restricts cities’ ability to reduce maximum residential densities and stated “the City could not permit the “reduction of density of any such residentially designated parcel unless the city finds the proposed reduction is consistent with the General Plan,” and that there are remaining sites adequate to accommodate the City’s share of the regional housing needs.”

The Court of Appeal’s CEQA Analysis

Given these General Plan and EIR provisions, the Court of Appeal had little trouble concluding that the GPA eliminating minimum density requirements for all residential land categories was not exempt from CEQA under the claimed Class 5 exemption for projects that “consist[ ] of minor alterations in land use limitations in areas with an average slope of less than 20%, which do not result in any changes in land use or density, including but not limited to [minor lot line adjustments, side yard and set back variances creating no new parcels, minor encroachment permits, and reversions to acreage under the Map Act].” (14 Cal. Code Regs., § 15305, emph. the Court’s.) The Court disagreed with City’s argument that the GPA retained existing density maximum standards, reasoning: “While the [GPA] does not reduce the maximum allowable density for residential areas, its elimination of the minimum allowable density changes the density range, effecting a lower average density for residential areas than anticipated in the 2007 EIR. The City’s claim that the [GPA] is exempt from CEQA analysis begs the question: Is the City able to accommodate its share of the regional housing needs if there is no minimum (and a lower average) density for residential areas as originally identified and required in the General Plan?”

It also noted that, even assuming arguendo the GPA fell within the Class 5 categorical exemption, PFPP met its burden of establishing an exemption by presenting a “fair argument” that the GPA’s cumulative environmental impacts would be significant “due to its across-the-board change in land use regulation that affects every residential area identified by the General Plan.” Per the Court: “Moreover, the [GPA] is capable of causing significant cumulative impacts on the City’s stock of high-density, low and moderate income housing due to its elimination of the minimum density allowances.”

The Belatedly Published Opinion’s Takeaways – and Quirks

The biggest practical takeaway for local legislative bodies contemplating general plan amendments is to pay close attention to the correlation between the land use and housing elements, and to be wary of changing the range of allowable land use densities when those have been relied on in the housing element to satisfy the agency’s fair share of regional housing needs. Such an action threatens to create an internal inconsistency among the general plan’s elements which would require CEQA analysis and invalidate the amendment.

The opinion undoubtedly reaches the correct result as a matter of both law (because the Class 5 exemption plainly did not apply on its face to the GPA) and equity (because the City’s attempted justification that it had always ignored the lower end of the residential density ranges in its General Plan was, to put it mildly, an unappealing position). Nonetheless, the opinion also seems odd in a number of respects which might explain why it was not initially certified by the Court as suitable for publication.

First, its cursory discussion of the standards of judicial review is incomplete and could be misleading if misapplied in other cases. While the Court states “an appellate court reviewing a trial court’s ruling on a petition for writ of mandate is confined to inquiry whether the findings and judgment of the trial court are supported by substantial evidence[,]” that is not the standard of review generally applied in CEQA cases, where the appellate court normally reviews the lead agency’s decision directly and the administrative record de novo and grants no deference to the trial court’s findings.

Similarly, the Court’s statement that “determining the meaning of a provision of a general plan” is a “question of law” for the Court’s independent review is oversimplified in this context, neglecting to mention the well-established body of law granting substantial deference and applying an “arbitrary and capricious” standard of review to a local legislative body’s general plan consistency determinations, so that they will be overturned only if the evidence is such that “no reasonable person could agree” with them. While the Court purported not to reach the “internal inconsistency” general plan argument of PFPP which arguably would have implicated this standard, much of its “CEQA” analysis really seemed to focus primarily on Planning and Zoning Law (not CEQA) concepts and to do just that.

Another oddity was the Court’s rather cursory discussion of a split in authority that it “need not decide” as to whether the “substantial evidence” or “fair argument” standard of review applies to the “determination of whether an exception to … [a claimed categorical] exemption exists.” While despite making this statement the Court later seemed to apply the “fair argument” standard (in what was probably dictum), it strangely failed even to cite or discuss the possible relevance of the California Supreme Court’s recent landmark categorical exemption exception case, Berkeley Hillside Preservation v. City of Berkeley (2015) 60 Cal.4th 1086, which construed (and resolved a split of authority on the standard anyway of review for) the application of the “unusual circumstances” exception to categorical exemptions under Guidelines § 15300.2(c).

In rejecting the City’s CEQA “baseline” argument – i.e., that it never interpreted the General Plan as mandating minimum residential densities so the GPA merely conformed to its existing practice and effected no change – the Court stated that once adopted “the General Plan itself provided the baseline for future projects.” It analogized the City’s legal obligation to address future regional housing needs to its discretion to use a time-of-approval traffic baseline to address future increases in traffic (citing Save Our Peninsula Committee v. Monterey County Bd. of Supervisors (2001) 87 Cal.App.4th 99, 125-126), but strangely neglected to discuss potentially relevant future baseline authorities, including most prominently the Supreme Court’s landmark decision in Neighbors for Smart Rail v. Exposition Metro Line Construction Authority (2013) 57 Cal.4th 439.

Conclusion

While reaching the correct result, the decision appears to misstate applicable review standards, overlook relevant case authorities, and mix and muddle land use planning law concepts with CEQA rules for assessing physical environmental impacts in a way that blurs important analytical distinctions. Not infrequently, appellate decisions that are correct in their end result are nonetheless better off remaining unpublished, and this decision may well fall into that category.