On May 4, 2021, in Alliance for Responsible Planning v. Taylor (County of El Dorado), __ Cal.App.5th __ (2021) (Case No. C085712), the Third District Court of Appeal affirmed a trial court decision invalidating as a violation of the unconstitutional conditions doctrine certain County of El Dorado planning policies enacted via ballot initiative.
El Dorado County voters adopted Measure E in June 2016 to end the practice of “paper roads.” Prior to Measure E, if a project requiring discretionary approval would increase traffic beyond certain thresholds, the project could be approved if the developer contributed its proportional share of traffic impact fees to cover the cost of future road improvements and if the necessary traffic-mitigating improvements were included in the County’s Capital Improvement Program. Measure E sought to end the practice of developments going forward, while traffic-mitigating road improvements remained on paper. Measure E did so by modifying several County general plan policies to require that “all necessary road capacity improvements shall be fully completed to prevent cumulative traffic impacts from new development from reaching Level of Service F during peak hours upon any highways, arterial roads and their intersections during weekday, peak-hour periods in unincorporated areas of the county before any form of discretionary approval can be given to a project.”
Alliance filed a facial challenge, arguing that the conditions imposed by Measure E were exactions, exceeding fair share and lacking a reasonable relationship to the harm flowing from a development. Alliance argued that the general plan policies, as amended, were subject to several interpretations, all of which imposed unconstitutional conditions under Nollan v. California Coastal Commission, 483 U.S. 825 (1987) and Dolan v. City of Tigard, 512 U.S. 374 (1994). A developer would either have to construct every programmed traffic-mitigating improvement or merely those necessary to prevent traffic resulting from its own development along with other cumulative developments. Both cases exceeded fair share in that developers must construct road improvements to serve other developments and not just their own.
The trial court agreed, finding that the general plan policies violate the takings clause by conditioning approval on the developer paying more than its fair share for the cost of traffic mitigation arising from the development. The court reasoned that a developer seeking approval of a single project is solely responsible to pay for construction of all road improvements necessary to bring the traffic volume on the roads affected by the project to a specified level. This would require developers to pay for not only the their own project’s incremental impact to traffic congestion, but also be responsible to pay for improvements that arise from the cumulative effect of other projects, and in some instances to pay for projected future increases in traffic. The court concluded that this clearly exceeds the developer’s fair share in that it is not roughly proportional to the project’s traffic impact.
The Court of Appeal first rejected the argument that the trial court’s consideration of the facial challenge to Measure E was premature because it required speculation as to how the provisions would apply to various project applications. A controversy is “ripe” when it has reached, but has not passed, the point that the facts are sufficient to permit an intelligent and useful decision to be made. Here, because the challenged amendments cannot be interpreted as constitutional, delaying consideration could only serve to impose unconstitutional conditions or delay on developers and spur unnecessary litigation.
Addressing the merits of the case, the Court noted that an initiative measure must be upheld unless its unconstitutionality “clearly, positively, and unmistakably appears.” Pala Band of Mission Indians v. Board of Supervisors, 54 Cal.App.4th 565, 574 (1997). For a facial challenge to succeed, the plaintiff must demonstrate the challenged portion will result in legally impermissible outcomes in the generality or great majority of cases.
In evaluating whether a statute effects an unconstitutional exaction, under Nollan and Dolan and their progeny, the court must first determine whether an “essential nexus” exists between a legitimate state interest and the permit condition. If so, the court must determine if the “degree of exaction” demanded by the condition bears the “required relationship” to the projected impact of the proposed development. There must be “rough proportionality” between the property the government demands and the social costs of the applicant’s proposal. In addition, under Koontz v. St. Johns River Water Management Dist., 570 U.S. 595 (2013), an unlawful condition need not only be for land—demands for money can also violate Nollan and Dolan.
The Court explained that “[l]audable as traffic mitigation is, there are outer limits to how this may be done.” The Court agreed with the trial court that the County’s traffic mitigation policies are unconstitutional. Both interpretations violate Nollan and Dolan. If the policies require the completion of “all necessary road capacity improvements” to prevent peak-hour gridlock, they plainly cast a wider net than the harm resulting from an individual project. Thus, rough proportionality is unsatisfied and mostly likely essential nexus is as well. Similarly, if the policies demand only mitigation addressing traffic from the discretionary project combined with “cumulative traffic impacts from new development,” a developer must still complete improvements addressing impacts beyond its own. Thus, this also exceeds rough proportionality. Similarly unavailing is the suggestion that a developer can simply wait until others complete the improvements. As explained in Koontz: “The principles that undergird our decisions in Nollan and Dolan do not change depending on whether the government approves a permit on the condition that the applicant turn over property or denies a permit because the applicant refuses to do so.”
Finally, the Court rejected the claim that Measure E is a land use control. The Court relied on California Building Industry Assn. v. City of San Jose, 61 Cal.4th 435, 463 (2015), which purported to explain the difference between a lawful land use control and an unlawful taking . There, a challenge was brought to a San Jose ordinance requiring new residential developments to provide affordable housing. Holding that the ordinance did not violate Nollan and Dolan, the California Supreme Court explained that no exaction took place because the ordinance ostensibly does not require a developer to give up a property interest for which the government would have been required to pay just compensation under the takings clause outside of the permit process. Instead, according to the California Supreme Court, requiring the developer to sell a portion of its units at affordable housing prices “simply places a restriction on the way the developer may use its property by limiting the price for which the developer may offer some of its units for sale.”
Here, by contrast, the Third District Court of Appeal explained that under Measure E a developer must give up a property interest as a condition of approval: the developer must complete or construct road improvements. The initiative therefore may not be upheld as a land use control California Building Industry Assn. v. City of San Jose.
Alliance for Responsible Planning appears to be the first time a court has invalidated a California ballot initiative as an unconstitutional exaction under Nollan and Dolan. It also appears to be the first time a traffic mitigation requirement has been invalidated as an unconstitutional exaction. And while the case does not shed much helpful light on the thinly reasoned California Building Industry Assn. v. City of San Jose case, it does make clear that mitigation measures requiring construction of improvements implicates constitutionally-protected property interests.
