California Supreme Court Denies Review in Berkeley Shellmound Case Paving the Way for Housing Under SB 35

In an exciting development regarding the validity of SB 35, the California Supreme Court on July 28, 2021, denied review of a recent First District Court of Appeal decision, Reugg & Ellsworth v. City of Berkeley that found that the City violated the law and wrongfully denied a mixed-use project on a site with possible tribal cultural resources.  The application was based upon Senate Bill 35 (Government Code section 65913.4) which requires streamlined, ministerial review of certain qualifying housing projects.

The developer filed an application for a mixed-use project (featuring 260 units, half of which were proposed to be affordable) on the former Spenger’s restaurant parking lot site.  The City designated the area as an “historic resource” due to the potential presence of tribal cultural resources in the form of Native American shellmound remnants.

The developer sought to rely on the streamlined ministerial approval process afforded by SB 35, but the City determined the project was ineligible because SB 35 excludes projects that “would require the demolition of a historic structure … on a national, state, or local historic register.”

The City further argued SB 35 was unconstitutional because it violated a charter city’s “home rule” authority in that it seeks to override local landmark and historic resource protection ordinances and requires ministerial processing of mixed-use projects.  The City also argued that the project didn’t comply with certain “objective” local standards.

In 2019, an Alameda County trial court judge ruled in favor of the City and concluded that SB 35 does not permit ministerial processing for mixed-use projects unless a local agency’s zoning mandates that all projects in that zone be at least 2/3 residential by square footage.

In April 2021, the Court of Appeal overturned the trial court’s decision and issued the first published opinion interpreting SB 35.  The Court of Appeal found that the project met all objective standards and acknowledged there was a “crisis of insufficient housing in the state by eliminating local discretion to deny approval where specified objective planning criteria are met”.  The court also underscored the Legislature’s statement in SB 35 that the statute applies to charter cities because access to affordable housing applies statewide and is not a municipal affair.

The court found no evidence that the Spenger’s parking lot was an “historic structure” and specifically stated that the SB 35 carve-out for historic structures was not intended to apply to structures that may, potentially, have once existed but, rather, only to existing historic structures.

The court also rejected the argument that SB 35’s 2/3 residential square footage requirement was intended to apply to the underlying zoning of a project site and held that SB 35 applies to projects that designate at least two-thirds of their square footage to residential use.  While the traditional mandamus standard of review requires deference to a local agency’s land use determination, the court opined that deference here  was “inappropriate” given the legislative intent of SB 35 to limit local authority in order to address the “crisis of insufficient housing in the state”.

The Court of Appeal decision, authored by Presiding Justice Anthony Kline, also linked SB 35 to the powerful Housing Accountability Act (Government Code section 65589.5 et seq.) and suggested that the two statutes should be read together and in favor of housing project approval and production.

Justice Kline boldly stated that the state’s intrusion into local government authority over land use is warranted in this case “in light of the Legislature’s long history of attempting to address the state’s housing crisis and frustration with local governments’ interference with that goal.”

Wendel Rosen LLP land use attorneys Patricia Curtin, Amara Morrison and Todd Williams assisted the City of Cupertino in the processing of the state’s largest SB 35 application and represent developers in processing SB 35 applications.