Judge: James L. Crandall, Case: 21-1176935, Date: 2022-07-21 Tentative Ruling

Demurrer to Amended Complaint

The demurrer of Defendant Maria Luisa Yee, Trustee of the Yee Trust Established June 15, 2010 is SUSTAINED with leave to amend.

Plaintiff’s objections to Defendant’s Exhibits 3, 4, and 5 (architectural drawings with handwritten notes) are sustained. (See South Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 732 [demurrer reaches only contents of the pleading and matters subject to judicial notice].)

Defendant contends this dispute is not yet ripe because Plaintiff’s entitlements for the development have not yet been issued by the City of Huntington Beach. Plaintiff responds that this is an affordable housing project covered by SB 35 and the City’s approval of this particular project is therefore ministerial, not discretionary.

To be the proper subject of declaratory relief, a controversy must be “ripe,” as stated in Zolly v. City of Oakland (2020) 47 Cal.App.5th 73, 90–91 (citations and internal punctuation omitted):

“The ‘actual controversy’ language in Code of Civil Procedure section 1060 encompasses a probable future controversy relating to the legal rights and duties of the parties. [Citation.] For a probable future controversy to constitute an ‘actual controversy,’ however, the probable future controversy must be ripe. A ‘controversy is “ripe” when it has reached, but has not passed, the point that the facts have sufficiently congealed to permit an intelligent and useful decision to be made.’ ” “It does not embrace controversies that are ‘conjectural, anticipated to occur in the future, or an attempt to obtain an advisory opinion from the court.’ ” “ ‘ “Whether a claim presents an ‘actual controversy’ within the meaning of Code of Civil Procedure section 1060 is a question of law that we review de novo.” ’ ”

“A ripeness inquiry involves a two-step analysis: First, whether the issue is appropriate for immediate judicial resolution; and second, whether the complaining party will suffer a hardship from a refusal to entertain its legal challenge. Under the first test, ‘ “courts will decline to adjudicate a dispute if ‘the abstract posture of the proceeding makes it difficult to evaluate ... the issues’, if the court is asked to speculate on the resolution of hypothetical situations, or if the case presents a ‘contrived inquiry’.” ’ Under the second test, courts generally will not consider issues based on speculative future harm. This is particularly true where the complaining party will have the opportunity to pursue appropriate legal remedies should the anticipated harm ever materialize.””

Ruegg & Ellsworth v. City of Berkeley (2021) 63 Cal.App.5th 277, 291–292, summarizes the effect of SB 35 as follows:

“[T]he Legislature enacted Senate Bill No. 35, effective January 1, 2018, adding section 65913.4 to the Government Code.3 (Stats. 2017, ch. 366, § 3.) Section 65913.4 requires a “ministerial approval process” for certain affordable housing projects when a locality has failed to provide its share of “regional housing needs, by income category.” (§ 65913.4, subd. (a)(4)(A).)4

Section 65913.4, subdivision (a), provides that if a proposed development satisfies all of the “objective planning standards” enumerated in the statute, it is subject to a “streamlined, ministerial approval process” and “not subject to a conditional use permit.” Among the objective planning standards, as relevant here, and as worded at the time of appellants’ application,5 the development must be “a multifamily housing development that contains two or more residential units” (§ 65913.4, subd. (a)(1)); the development must be “located on a site that satisfies all of the following: [¶] ... [¶] (C) A site that is zoned for residential use or residential mixed-use development, or has a general plan designation that allows residential use or a mix of residential and nonresidential uses, with at least two-thirds of the square footage of the development designated for residential use” (§ 65913.4, subd. (a)(2)(C));6 and the development must be “consistent with objective zoning standards, objective subdivision standards, and objective design review standards in effect at the time that the development is submitted to the local government pursuant to this section” (§ 65913.4, subd. (a)(5)).

If the local government determines that a development submitted pursuant to section 65913.4 is “in conflict with any of the objective planning standards specified in subdivision (a), it shall provide the development proponent written documentation of which standard or standards the development conflicts with, and an explanation for the reason or reasons the development conflicts with that standard or standards,” within 60 days for a development of up to 150 housing units or within 90 days for a development containing more than 150 housing units. (§ 65913.4, former subd. (b)(1), now subd (c)(1).)

“If the local government fails to provide the required documentation pursuant to paragraph (1), the development shall be deemed to satisfy the objective planning standards specified in subdivision (a).” (§ 65913.4, former subd. (b)(2), now subd. (c)(2).)”

At paragraphs 12 and 13, Plaintiff alleges that the proposed affordable housing development is subject to a ministerial review pursuant to SB 35, under which the City is mandated to approve the project:

“SB 35 was passed in 2017 and as pertinent here, amended Government Code sections 65400 and 65582.1 and added section 65913.4. New section 65913.4 provides that a developer of multi-family housing may access a streamlined ministerial approval process which bypasses the California Environmental Quality Act ("CEQA") and the need for a conditional use permit in certain circumstances.

The Subject Property is listed on the City of Huntington Beach’s 2013-2021 Housing Element plan adopted February 2020 and filed with the California Department of Housing and Community Development (“HCD”) as a RHNA property.” (FAC ¶ 12.)

“AMG is an affordable housing developer who has submitted an Application to the City of Huntington Beach to develop affordable housing on the Subject Property pursuant to SB 35.

AMG’s site plan for the project is attached hereto as Exhibit 7 and incorporated herein by this reference. The City has confirmed to AMG that the Subject Property is within the City’s affordable housing overlay which is a streamlined process (site plan review only) that does not require a hearing.

Under Government Code Section 65589.5(d), the City cannot deny the Application for permits unless it makes one of five findings that do not apply to AMG’s project.

Further, Section 65589.5(d)(A) provides that “[t]his paragraph cannot be utilized to disapprove or conditionally approve a housing development project if the housing development project is proposed on a site that is identified as suitable or available for very low, low-, or moderate income households in the jurisdiction’s housing element, and consistent with the density specified in the housing element, even though it is inconsistent with both the jurisdiction’s zoning ordinance and general plan land use designation.” (FAC ¶ 13.)

At paragraph 19, Plaintiff alleges,

“The City of Huntington Beach’s general plan permits the use proposed by AMG and the City’s Senior Planning has confirmed that the AMG project falls within the the [sic] City’s affordable housing overlay which under SB 35 is a streamlined process (site plan review only) that does not require a public hearing.

AMG is seeking this judicial declaration simultaneously with its pursuit of its entitlements with the City of Huntington Beach pursuant to SB 35 because if AMG has to wait the 9 to 18 months it may take to receive entitlements and then after that, defendants object to the Project on the grounds that it violates the Easement as YEE has already indicated it will, then Plaintiff will have wasted hundreds of thousands of dollars in architectural, engineering, expeditor, landscape architect and permitting fees along with wasting it’s and the City’s time and money only to have to start the process over again once it then again files a lawsuit and obtains a ruling on YEE’s purported objections and contentions.”

However, Plaintiff acknowledges that certain exceptions (paraphrased below) under Government Code section 65589.5(d) could allow the City to issue an adverse decision:

1. “The jurisdiction has adopted a housing element pursuant to this article that has been revised in accordance with Section 65588, is in substantial compliance with this article, and the jurisdiction has met or exceeded its share of the regional housing need allocation. . .” (Gov. Code § 65589.5(d)(1).)

2. “The housing development project or emergency shelter as proposed would have a specific, adverse impact upon the public health or safety. . .” (Gov. Code § 65589.5(d)(2).)

3. “The denial of the housing development project or imposition of conditions is required in order to comply with specific state or federal law. . .” (Gov. Code § 65589.5(d)(3).)

4. “The housing development project or emergency shelter is proposed on land zoned for agriculture or resource preservation that is surrounded on at least two sides by land being used for agricultural or resource preservation purposes, or which does not have adequate water or wastewater facilities to serve the project” (Gov. Code § 65589.5(d)(4).)

5. “The housing development project or emergency shelter is inconsistent with both the jurisdiction's zoning ordinance and general plan land use designation as specified in any element of the general plan as it existed on the date the application was deemed complete, and the jurisdiction has adopted a revised housing element in accordance with Section 65588 that is in substantial compliance with this article.” (Gov. Code § 65589.5(d)(5).) Subdivision (d)(5)(A) further explains, “This paragraph cannot be utilized to disapprove or conditionally approve a housing development project if the housing development project is proposed on a site that is identified as suitable or available for very low, low-, or moderate-income households in the jurisdiction's housing element, and consistent with the density specified in the housing element, even though it is inconsistent with both the jurisdiction's zoning ordinance and general plan land use designation.”

At paragraph 13 of the FAC, Plaintiff alleges, “Under Government Code Section 65589.5(d), the City cannot deny the Application for permits unless it makes one of five findings that do not apply to AMG’s project.”

However, Plaintiff has failed to allege facts showing the exceptions under section 65589.5(d) are inapplicable.

Plaintiff has not adequately alleged a ripe controversy because Plaintiff has not alleged facts showing that the City’s approval of the project is merely ministerial under the circumstances of this case.

Based on the allegations in the FAC, it remains plausible that the project specifications could be modified or the project could be abandoned, depending on the City’s response to Plaintiff’s application for entitlements, which could render this dispute moot.

Plaintiff will be given a final opportunity to amend the complaint to demonstrate a ripe controversy. Plaintiff shall file an amended complaint within 30 days of service of notice of this order.

Moving Party to give notice.

Future hearing dates

3/3/23 – MSC

4/3/23 – Jury Trial