In a partially published opinion in Save Lafayette v. City of Lafayette (2022) 85 Cal.App.5th 842, the First District Court of Appeal upheld approval of an affordable housing project in the face of the third in a series of lawsuits filed by a citizens group against it. The Court held that the applicant could resume processing of its application after several years pursuing an alternative proposal, subject to the standards applicable when the initial application had been deemed complete. In the unpublished portion of the opinion, which is not discussed further in this summary, the Court rejected arguments that the long-since certified EIR had become “stale,” that it had not adequately examined impacts to special-status species and wildfire hazards, and that a supplemental EIR had been required for those reasons and due to the removal of 10 additional trees.

O’Brien Land Company, LLC (O’Brien) applied to the City of Lafayette (City) in 2011 to build the Terraces of Lafayette – a 315-unit affordable housing development (Project). An EIR was certified in 2013. However, before the Project was approved, the City and O’Brien agreed to suspend processing of the application while the applicant pursued a lower density alternative (the process agreement). The process agreement stipulated that O’Brien could resume the initial Project if the alternative was not approved or was legally delayed by appeal, challenge, or referendum.

The City approved the alternative, including general plan and zoning amendments. However, a citizen’s group calling itself Save Lafayette filed a CEQA lawsuit. The parties settled the suit in January 2016. Save Lafayette then filed a referendum petition, seeking to have the zone change either invalidated or submitted to a public vote. The City declined and Save Lafayette filed a second suit. Though the trial court denied the second petition, the Court of Appeal reversed. The parties reportedly settled the second case after the decision with a payment to Save Lafayette of $650,000 in attorney fees. Voters rejected the proposed rezone ordinance, and the City subsequently adopted an even lower density zoning for the site, requiring lot sizes three times larger than those voters rejected.

O’Brien consequently abandoned the alternative project in 2018, and resumed processing of the 315-unit Project under the process agreement, with minimal changes. The City approved the resumed Project in 2020 with an addendum to the 2013 EIR. Save Lafayette filed a third lawsuit challenging approval of the resumed Project, alleging defects in the 2013 EIR and the 2020 addendum, and apparent conflicts with the existing, low-density zoning of the site. The trial court denied the petition and this appeal followed.

Save Lafayette argued that the Project as approved was subject to, and inconsistent with, land use standards applicable in 2018, when O’Brien resumed processing of the original Project. The Court disagreed, finding that the applicable standards were those in effect at the time the initial application had been deemed complete in 2011. The Permit Streamlining Act (PSA) requires an application to receive a completeness determination within 30 days of its submittal and requires approval or denial of the project within 180 days of certification of an EIR, with one permitted 90-day extension allowed if accepted by the applicant and agency. The Housing Accountability Act (HAA) provides that a housing development project must comply with the standards in effect at the time the application is deemed complete.

The Court noted that the PSA has no provision for suspending consideration of a project, notwithstanding the process agreement’s attempt to do so. As such, the Court presumed that the multi-year delay violated the PSA. Save Lafayette argued that the completeness determination had therefore lapsed once the City lost the power to act on the application under the PSA. However, as the Court noted, such an interpretation would mean that the application was deemed disapproved by operation of the law. In fact, if the PSA’s approval timeline is violated, then the applicant is allowed to provide necessary public notice for the project to be deemed approved by operation of law.

The Court listed four additional reasons for rejecting Save Lafayette’s interpretation. First, nowhere does the PSA provide for deemed withdrawal or disapproval of an application. Second, the PSA does provide for restarting the completeness determination timeline upon application resubmittal, but specifically where the application is resubmitted to add information identified as initially missing, which did not occur here. Third, The PSA expressly provides that any disapproval must be on the basis of articulated reasons, suggesting that a “silent disapproval” of the sort Save Lafayette urged is not possible. Lastly, the Court construed the PSA in light of the HAA and its clear expressions that the law must be interpreted to afford the fullest possible weight to the interest of, and the approval and provision of, housing. As such, the Court upheld denial of the petition in full. The case is another example of how housing developments, particularly those proposing affordable housing, can face staunch and protracted opposition on the basis of somewhat less staunch legal theories. As a different panel of the First District reminded us earlier this year, delay itself can be the goal of such opposition, to wage “a never-ending battle of attrition with ever-changing targets for project opponents to aim for.” (Tiburon Open Space Committee v. County of Marin (2022) 78 Cal.App.5th 700, 781, quoting Center for Biological Diversity v. Department of Fish & Wildlife (2015) 62 Cal.4th 204, 245 (dis. opn. of Chin, J.).) The battle for this project is not over. Save Lafayette filed a petition for rehearing, which was denied the following day, and on January 5, 2023 filed a petition for review to the California Supreme Court. Meanwhile, the Project’s already-approved affordable housing remains tied up in the litigation, at least for the time being.

Key Point

  • The Permit Streamlining Act does not provide for automatic disapproval of development applications.