The harsh effects on property rights resulting from the California Coastal Act’s broad definition of “development” are on display again following the Second District Court of Appeal’s March 27, 2018 opinion, in Greenfield v. Mandalay Shores Community Association, __ Cal.App.5th __ (2018) (Case No.B281089), where the Court held that “[t]he decision to ban or regulate [short-term rentals] must be made by the City and Coastal Commission, not a homeowner’s association.”
The case arose following the Mandalay Shores Community Association’s adoption of a resolution barring the rental of single-family dwellings within the homeowner’s association for less than 30 days. The resolution was intended to curtail parking, noise, and trash problems caused by short-term rentals. The resolution generated local controversy in Mandalay Shores, resulting in a lawsuit by a homeowner affected by the policy who alleged that the ban violates the California Coastal Act.
Enacted in 1976, the Coastal Act is intended to, among other things, “[m]aximize public access to and along the coast and maximize public recreational opportunities to the coastal zone consistent with sound resources conservation principles and constitutionally protected right of private property owners.” The Act requires that any person who seeks to undertake a “development” in the coastal zone obtain a coastal development permit. In addition, the Act broadly defines “development” to include, among other things, any “change in the density or intensity of use of land . . . .” (Emphasis added.)
The Mandalay Shores trial court held that the short-term rental ban was not “development” and, thus, denied the plaintiff’s request for a preliminary injunction. The Court of Appeal reversed, explaining that “[o]ur courts have given the term “development” “[a]n expansive interpretation . . . consistent with the mandate that the Coastal Act is to be ‘liberally construed to accomplish its purposes and objectives.”
The Court cited several cases that broadly interpreted “development” under the Coastal Act, including Surfrider Foundation v. Martins Beach 1, LLC, 14 Cal.App.5th 238 (2017), which held that closing and locking a gate that had long been open to allow public access to a beach over private property is “development” under the Act. (We wrote about that ongoing battle here and in a Daily Journal article entitled “Billionaire vs surfers case may go to high court” following the landowner’s filing of a petition for writ of certiorari with the U.S. Supreme Court.)
Given such liberal interpretation of the meaning of “development,” the Court held that short-term rental bans are a matter for the City and Coastal Commission to address and that short-term rentals “may not be regulated by private actors where it affects the intensity of use or access to single family residences in a coastal zone.”
Mandalay Shores highlights the significance of a broad interpretation of “development” under the Coastal Act, where activities that reduce the density or intensity of use of land can be subjected to the Act’s permitting requirements. That counterintuitive interpretation may not survive, however, if the Supreme Court grants certiorari in Surfrider Foundation.