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A pair of recent decisions have added new detail to the possibilities and limitations of ballot measures. In City of Morgan Hill v. Bushey, the California Supreme Court held that voters may use a referendum to invalidate a jurisdiction’s zoning amendment – even where it creates an inconsistency between the zoning ordinance and the general plan. In Ctr. For Community Action and Environ. Justice v. City of Moreno Valley, the 4th District restricted the scope of initiatives, holding that development agreements are exclusively delegated to local legislative bodies and may not be directly adopted by the voters through initiative.

These cases follow a renewed interest in the use of ballot measures to make local land use decisions, particularly since the Supreme Court’s 2014 decision in Tuolumne Jobs & Small Bus. Alliance v. Superior Court. Tuolumne held that voter-sponsored initiatives are not subject to CEQA review, even where the agency adopts the legislation. That decision inspired a series of developer-backed attempts to win project approval from voters to avoid the time and liability of CEQA. Opponents of development have also been active  – using ballot initiatives to limit density and referendums to reject project approvals.

City of Morgan Hill v. Bushey (Cal., Aug. 23, 2018, No. S243042)

In Bushey, the California Supreme Court resolved a split in the appellate courts on whether a voter referendum can invalidate a municipality’s zoning amendment, even where that action leaves the zoning ordinance inconsistent with the municipality’s general plan. The Court held that such a referendum is valid, provided that the jurisdiction can achieve consistency with another amendment to resolve the inconsistency within a “reasonable time.”

In November of 2014, the City of Morgan Hill approved a land owner’s application for a general plan amendment to redesignate a 3.39-acre property from Industrial to Commercial to allow for the owner’s plans to develop a hotel on the site. Several months later, the City completed a rezoning to General Commercial; the designation both brought the zoning ordinance into conformance with the revised general plan as required by Government Code Section 65860 (a) and allowed for the land owner’s proposed use.

A group of hotel owners, concerned that the market would not support an additional hotel project, initiated a referendum to suspend the zoning change. The City sought to remove the referendum from the ballot arguing it would create an invalid inconsistency between the zoning ordinance and the general plan. That position was supported by the holding of deBottari v. City of Norco (1985) 171, Cal.App.3d 1204, 1212, which held that a referendum could not be used to repeal a zoning amendment meant to create consistency between the jurisdiction’s zoning ordinance and general plan, since it would “enact” an illegal inconsistent zoning ordinance by returning the ordinance to its pre-amended state. The Court of Appeal disagreed, directly contradicting deBottari, and the California Supreme Court took up the case to resolve the issue.

The California Supreme Court agreed with the court below. The Court recognized its own caselaw holding that an inconsistent zoning amendment is invalid even where passed by voter initiative, but distinguished here the voters’ right to overturn a municipality’s zoning amendment by referendum – even where that act results in a vertical inconsistency with the general plan. The Court thus distinguished between the creation of a new inconsistency, which is invalid, and a referendum that returns the jurisdiction’s zoning ordinance to an inconsistency created by the general plan amendment, a status anticipated by Government Code Section 65860 which governs zoning ordinances that were valid when enacted but made inconsistent by changes to the general plan. (Slip op. at 8.) Borrowing from the language of Section 65860, the Court found that the City would likely be able to make a change to the zoning ordinance that would comply with both the general plan and the referendum “within a reasonable time.” (Slip op. at 24.)

Bushey holds that the people of a local jurisdiction may indeed challenge a zoning amendment by referendum, even where that amendment changes a property’s zoning designation to bring it into compliance with a general plan amendment, provided that there are “other consistent zoning options available, or the municipality has the power to make the zoning ordinance and general plan consistent through other means.” (Slip op. at 9.)

Ctr. For Community Action and Environ. Justice v. City of Moreno Valley (4th Dist. Court of Appeal, Aug. 23, 2018, D073451)

In Center for Community Action, the 4th District reversed a superior court ruling and backed environmental groups’ contention that the City’s approval of a voter-sponsored development agreement for a warehouse complex was an invalid exercise of the initiative power.

In August of 2015, the Moreno Valley City Council adopted ordinances and resolutions approving the World Logistics Center project, a large warehouse and distribution center. Approvals included a development agreement securing the property owner’s right to develop, and an Environmental Impact Report (EIR) reviewing the project. Environmental groups quickly filed suit, challenging the validity of the EIR. While the CEQA challenge was being heard, the Moreno Valley Jobs Coalition filed an initiative petition that would repeal the ordinance approving the project’s development agreement and replace it with another development agreement that was substantially similar to the first agreement, but that would not have to undergo CEQA review. The initiative gathered sufficient signatures to qualify for the ballot and the City Council adopted the initiative as an ordinance pursuant to Election Code § 9215.

The court rejected the validity of the ballot initiative and subsequent approval by the City. While recognizing that the ballot power is a liberally construed right and that the courts have an obligation to “resolve doubts in favor of the exercise of the right whenever possible,” the court held that development agreements are outside of the electorate’s powers. (Slip op. at 7, quoting Cal. Cannabis Coalition v. City of Upland (2017) 3 Cal.5th 924, 934.) The court’s examination was multi-faceted but was based on a single essential line of reasoning: the statutes governing development agreements, found at Government Code §§ 65864 et seq., represent an authority granted from the legislature, as opposed to derived from inherent local police powers; the legislature delegated that authority directly to local governing bodies as opposed to the electorate, subject to rejection by referendum but not to creation through the initiative process. (Slip op. at 31.)

A petition for review may be forthcoming on this case.

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