State Housing Law Again Preempts Subjective Local Development Standards | Miller Starr Regalia

On February 2, 2022, in Bankers Hill 150 v. City of San Diego__ Cal.App.5th __ (Case No. D077963), the Fourth District Court of Appeal relied on fundamental provisions of California’s Density Bonus Law in rejecting a challenge by local NIMBY’s to a 20-story mixed-use project in San Diego on the grounds that the project is inconsistent with the neighborhood because it is too dense, too tall, and too close to the street. The Court recognized that the NIMBY group sidestepped the implications of the Density Bonus Law, which shapes and limits a city’s discretion in reviewing a project.

The 204-unit housing development project at issue dedicated 12%, or 18, of its units to very low-income households and was thus entitled to a 38.75% density bonus and 3 incentives or concessions. With this density bonus, the developer sought to exceed the maximum zoned capacity of 147 units to add an additional 57 units. The developer also relied on the Density Bonus Law to request development incentives to avoid a setback on one street, eliminate two on-site loading spaces for trucks, and reduce the number of private storage areas for residents.

City staff correctly recommended approval of the project, which was unanimously approved by the Planning Commission. The City Council thereafter unanimously denied an appeal by the NIMBY opponents, thereby approving the project.

The Court of Appeal applied “blackletter” principles of the Density Bonus Law, which includes limited exceptions to its requirements and places the burden on a city to establish an exception applies. For example, an incentive or concession may be refused if the city can establish it would not result in identifiable and actual cost reductions to provide for affordable housing costs. The only other exceptions to the requirement to grant incentives and concessions or waivers and reductions of standards require a city to find, based on substantial evidence, that doing so (1) would have “a specific, adverse impact . . . upon public health and safety,” (2) would have an adverse impact on any historic resource, or (3) would be contrary to state or federal law.

Here, the Court rejected arguments that the project is inconsistent with the City’s land use plans the project did not “maintain and enhance views of Balboa Park,” included inadequate “façade articulation,” improperly transitioned from the shorter buildings, and did not respect the scale of buildings. Consistent with the plain terms of the law, the Court held that the developer was entitled under the Density Bonus Law to a waiver of any A development standard that would have the effect of physically precluding the construction of the project at the permitted density and with the requested incentive unless the City could make the specified findings to warrant an exception from the Density Bonus Law. The City concluded that it could not make those findings. Thus, regardless of the merit of the NIMBY group’s contentions on appeal, it failed to establish a basis for relief because the City’s discretion to deny the project application was constrained by state law.

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