The Housing Accountability Act roars into life

In 2017 and 2018, the California Legislature added teeth to the Housing Accountability Act, Government Code Section 65589.5 et seq., which is a previously little-known statute that, due to recent amendments, has emerged from obscurity. The Legislature's stated intention in strengthening the HAA is to curb the ability of local governments to deny housing development projects or reduce their density. The HAA applies to both market rate and affordable housing development projects and has become a litigation favorite of developers and the "Yes in My Backyard" groups seeking to challenge housing denials and reductions in density.

The HAA does not address other root causes of the state's severe housing shortage, such as the Legislature's 2011 abolition of redevelopment agencies. Under the state's former Redevelopment Law (Health and Safety Code Section 33000 et seq.), approximately $1 billion per year was dedicated to housing. Lynch & Morales, "Redevelopment 2.0: Existing Laws, Pending Legislation and Legal Theory" (League of California Cities, October 2019). And, the HAA does not trump the California Environmental Quality Act. As mentioned below, the HAA states that nothing in the act can be construed to excuse local government from making required CEQA findings. Gov't. Code Section 65589.5(e).

A party claiming a violation of the HAA must file an action in administrative mandamus pursuant to Code of Civil Procedure Section 1094.5. Id. Section 65589.5(m)(5). Unlike in a traditional mandamus action, the city or county bears the burden of proof that its actions conformed to the HAA. Id. Section 65589.6. The act confers standing upon project applicants, persons eligible for residency in the housing development project, and "housing organizations," defined to include trade, industry and advocacy groups whose mission includes advocating for low income housing. Id. Sections 65589.5(k)(1)(A)(i), (k)(2). In certain circumstances, a prevailing plaintiff in an HAA action may recover attorney fees. Id. Section (k)(10(A)(ii); (K)(2).

In a controversial amendment, effective Jan. 1, 2018, the act provides that a project "shall" be deemed consistent with applicable standards if there is substantial evidence that would allow a reasonable person to conclude that the project is consistent. Id. Section 65589.5(f)(4). Applicants, over local governments' strenuous objection, have attempted to use the new provision to argue that a planning commission or city council's determination on a project effectively does not matter, so long as they can point to evidence of consistency. The provision has not yet been interpreted in any published decision.

1. The HAA's Focus on "Objective" Standards when Denying or Reducing the Density of a Housing Development Project.

In a nutshell, the HAA makes it difficult for local government to deny or reduce the density of projects that comply with "objective" local standards. "Objective" was undefined in the act until Jan. 1, 2020. However, the Legislature has now imported Senate Bill 35's definition of "objective" into the HAA, in effect until Jan. 1, 2025: "'[O]bjective' means involving no personal or subjective judgment by a public official and being uniformly verifiable by reference to an external and uniform benchmark or criterion available and knowable by both the development applicant or proponent and the public official." Gov't. Code Section 65589.5(h)(8).

There are still only a few published decisions interpreting the HAA, and none construe the above definition of "objective." For example, in Honchariw v. County of Stanislaus, 200 Cal. App. 4th 1066 (2011), Stanislaus County rejected a subdivision proposal because the proposal was "not physically suitable," citing the rule that "all lots of a subdivision shall be connected to a public water system ... whenever available." Id. at 1078. The court concluded that a "physical suitability" standard was too subjective. Id. at 1080.

The Honchariw court also noted that the HAA, "take[s] away an agency's ability to use what might be called a 'subjective' development 'policy' (for example, 'suitability')." Id. at 1076. In other words, "suitability" is not an objective standard.

2. The HAA Does Not Trump CEQA.

Government Code Section 65589.5(e) states that the HAA does not excuse an agency from complying with CEQA before approving a housing development project, including by making findings for approval required under CEQA: "Nothing ... in this section [shall] be construed to relieve the local agency from making one or more of the findings required pursuant to Section 21081 of the Public Resources Code or otherwise complying with the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code)."

At least one court in a published decision has concluded that a CEQA review must be complete before an HAA claim may be stated. Schellinger Brothers v. City of Sebastopol, 179 Cal. App. 4th 1245, 1262 (2009). In Schellinger, in addition to bringing a CEQA claim to compel the local agency to certify an EIR for a housing project, the developer also sued under the HAA, even though the city had not yet completed environmental review of the project. The Court of Appeal agreed with the trial court that the developer failed to state a claim, noting that the HAA "specifically pegs its applicability to the approval, denial, or conditional approval of a 'housing development project' ... which ... can occur only after [an] EIR is certified." Id., citing Gov't. Code Section 65589.5(e) (original emphasis).

Arguably, allowing judicial review under the HAA without the completion of CEQA review would result in the rendering of an advisory opinion only. "The ripeness requirement, a branch of the doctrine of justiciability, prevents courts from issuing purely advisory opinions." Pacific Legal Foundation v. California Coastal Com., 33 Cal. 3d 158, 170 (1982). Projects cannot be meaningfully reviewed for conformance with objective city standards because mitigation measures or alternatives may be required to comply with CEQA that are not included in the current project design. It would be meaningless for the court to review the findings for conformance with the HAA before the final CEQA requirements are known.

In sum, beefing up the HAA has been a major focus of the Legislature's recent housing bills. HAA litigation is increasing substantially, including litigating the meaning of recent amendments to the HAA, designed to curtail local agency discretion in deciding whether to approve or deny housing development projects. 