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Whitney Hodges is a partner in the Real Estate, Energy, Land Use & Environmental Practice Group in the firm's San Diego office. She is the leader of the firm’s Cannabis Industry Team and serves on the firm's Pro Bono, Recruiting and Diversity & Inclusion committees, as well as numerous industry specific teams.

Undoubtedly, development impact fees (DIFs)[1] can make or break the pro forma of any development project. Until this month, developers hoping to challenge the assessment of project-related DIFs were often limited in the causes of action that could be brought. For instance, in California, a DIF may be challenged under the Mitigation Fee Act (Govt. Code §§ 66000 et seq.), and only DIFs that were “imposed neither generally nor ministerially, but on an individual and discretionary basis” could invoke the Takings Clause embedded in the Fifth Amendment of the United States Constitution.[2] This limitation on developers’ ability to utilize the Takings Clause meant that courts would not apply the “Nollan/Dolan test” to DIFs generally applicable to a broad class of property owners pursuant to legislative action.[3]Continue Reading What the Sheetz: Where California Development Impact Fees Stand Following Recent Supreme Court Decision

According to the Public Policy Institute of California, a non-profit, non-partisan think tank, California is facing a jaw-dropping 3.5 million unit housing deficient for the current population. This despite several legislative sessions enacting a large number of bills aimed at boosting housing production. 2023 was no different. During its first year of the current 2-year legislative cycle, Governor Newsom signed an unprecedented 56 housing bills into law, reflecting the California Legislature’s continued effort to respond to the housing crisis, and the multi-dimensional approach to developing, retaining, and permitting housing options for Californians. In sum, the housing bills intend to incentivize and reduce barriers to housing production, especially “affordable” or below-market rate housing by addressing previously-identified hurdles in the market. To do so, some bills include further expansion of State Density Bonus Law, including Senate Bill (SB) 423’s extension of the sunset date in 2017’s SB 35. The package also includes bills aimed to keep tenants in their existing homes and reflects the state’s desire to limit local governments’ ability to deny housing projects.Continue Reading California Continues Trend of Pushing Housing Legislation to Address Ongoing Housing Shortage

Despite repeated attempts at reform by the Legislature, the California Environmental Quality Act (CEQA) continues to be a minefield for those assigned with the herculean task of complying with the law’s myriad of directives. Add to the already inherent complexity of CEQA, judicial interpretation of its provisions has wide-reaching implications that can create even more potential pitfalls for those required to abide by its mandates, including decisionmakers and project proponents. Below are the summaries of the most notable CEQA cases from 2023, broken down by category.Continue Reading 2023 Year-in-Review CEQA Litigation

In late June, California’s Fourth District Court of Appeal upheld a Superior Court decision in Save Our Access v. City of San Diego, providing clarity for determining when a “later activity” is beyond the scope of an existing Program Environmental Impact Report (PEIR) under the California Environmental Quality Act (CEQA). Specifically, the Court held that a proposed ballot measure initiated by the City of San Diego to exclude the Midway-Pacific Highway Community Plan area from a voter-enacted height limit did not qualify as a “later activity” within the scope of the existing PEIR for the Community Plan Update because the PEIR relied on the height limit in its analysis of the potential environmental impacts. The Court held that the proper remedy is for the City to conduct further analysis of the potential impact of taller buildings in the Community Plan area in order to comply with CEQA before proceeding with the ballot measure.Continue Reading California Court Holds Proposed Ballot Measure Excluding Community Plan Area from Height Limit Is Not a “Later Activity” For Purposes of a Within-the-Scope Analysis

On June 13, 2023, the Second Appellate District affirmed the City of Pomona’s use of a statutory exemption for its Commercial Cannabis Overlay Permit Program under California Environmental Quality Act (CEQA) Guidelines section 15183, finding that the program required no additional environmental review. The decision in Lucas v. City of Pomona is noteworthy for the appellate court’s broad interpretation of the statutory exemption,[1] holding that (i) the City’s zoning ordinance, General Plan Update, and environmental impact report (EIR) that do not address “density” may be exempt under CEQA Guidelines section 15183, and (ii) uses, including cannabis-related uses, that are not literally included in land use plan documents, may be determined to be sufficiently similar to existing and defined land uses allowed by underlying zoning.Continue Reading Commercial Cannabis Permit Program and Overlay District Statutorily Exempt Under CEQA Guideline Section 15183

Last week, in California Restaurant Association v. City of Berkeley, the Ninth Circuit ruled the federal Energy Policy and Conservation Act (EPCA) preempts local bans on the installation of natural gas infrastructure in new construction. Specifically, the Ninth Circuit held that EPCA’s preemption of local efforts to regulate the energy use of natural gas appliances is to be construed broadly, applying equally to regulations that affect the use of such appliances. In other words, because the City of Berkeley’s ban on natural gas pipes in new construction “render[ed] the gas appliances useless,” it had improperly infringed on the federal government’s exclusive power to regulate the use of gas appliances.Continue Reading Ninth Circuit Strikes Down Berkeley’s Ban on Natural Gas in New Construction, Dealing Blow to California’s Electrification Efforts

Last week the Office of the Attorney General demonstrated the State of California’s unwillingness to cede its enforcement of state housing laws even in the face of defiance from local governments. On April 10, in People of California v. City of Huntington Beach (OCSC, Case No. 30-2023-01312235-CU-WM-CJC), Attorney General Rob Bonta filed a Motion to Amend its Petition For Writ of Mandate and Complaint For Declaratory and Injunctive Relief (Motion to Amend), which included the proposed First Amended Petition (Amended Petition), after the City of Huntington Beach (City), again, failed to adopt its sixth cycle update to its Housing Element[1] (6th Cycle) on April 4, 2023 – more than 16 months after the statutory deadline – in violation of the state Housing Element Law (Govt Code. § 65580 et seq.). Continue Reading California City Flouts Housing Laws, Inviting State Scrutiny

As of January 31st, the deadline for many Bay Area cities and counties to adopt legally compliant Housing Elements now has passed, and many jurisdictions remain without certifications from the

Continue Reading As Deadline for Housing Element Certification Passes, “Builder’s Remedy” and AB 1398 Remedies Loom for Noncompliant Bay Area Cities and Counties

For many in the cannabis industry, April 1, 2022 is seen as a day of reckoning following the July 2021 passage of Assembly Bill 141 and Senate Bill 160 (collectively, the Cannabis Trailer Bill).  In an attempt to transition to an annual licensure program, April 1st marked the beginning of the end for provisional cannabis licensure.  It also ushered in significant changes to renewal process for previously granted provisional licenses.  These modifications now require applicants to comply with the California Environmental Quality Act (Pub. Res. Code §§ 21000 et seq.) (CEQA), a complex statewide policy of environmental protection fraught with potential traps for those unversed in the law, before an operator is eligible to be awarded a cannabis state license.  This requirement alone carries the potential to create a much higher barrier to entrance into the cannabis market.
Continue Reading No April Fools: Starting April 1st, Cannabis Operators Face CEQA Compliance Requirements for State Licenses

In Citizens’ Committee to Complete the Refuge et al. v. City of Newark et al., the First District Court of Appeal (Div. 4) found the California Environmental Quality Act did not require subsequent or supplemental environmental review for the City of Newark’s approval of a 469‑lot residential subdivision project.  Instead, the court affirmed the City’s use of Government Code section 65457’s CEQA exemption for projects consistent with a “specific plan” for which a environmental impact report (EIR) was previously certified.
Continue Reading Petitioners Failed to Show Subdivision Consistent With a Specific Plan EIR Was Outside the Scope of a Statutory Exemption