Is Recent Court Decision on ‘Density Bonus’ in San Diego a Death Blow to Community Planning?

By Mat Wahlstrom

Last Wednesday, February 2, the Fourth Appellate Court of California certified as precedent its judgment on appeal of the Bankers Hill 150 v. City of San Diego lawsuit. The result, if left unchallenged, effectively strikes down all community plans throughout the state, along with the ability of cities or citizens to challenge whatever developers want to build, if projects include token and time-delimited ‘affordable’ units.

Going beyond consideration of the actual plan-centered merits argued by both plaintiffs and the city regarding just the 20-story 6th & Olive project, the court leapfrogged over both to invoke the state’s Density Bonus Law as trumping these deliberations and — at the urging of the Building Industry Association and the developer, Greystar — to establish its interpretation as precedent.

It’s such an earth-shattering reversal that the City of San Diego — which won — specifically asked the court *not* to go forward with it.

First approved in 1979 and modified several times since, the Density Bonus Law spells out a complex gamut of “incentives or concessions” governments must allow based on the mix of percentage levels of ‘affordable’ housing that is claimed to be provided. As each project requests different incentives or concessions, the approval process has heretofore been done on a case-by-case basis.

The 6th & Olive project replaced a naturally affordable two-story, 16-unit apartment building with a 223’ luxury/mixed-use tower of 204 dwelling units, of which 18 are deed restricted as affordable for 55 years. In exchange, the developer claimed several density bonus allowances, including zero setback from the street along Olive, 57 more units than zoned, and height above the 65’ overlay limit. And the city claimed that this was “consistent with the goals and policies of the General Plan and the Uptown Community Plan.”

The Bankers Hill 150 case was filed in part to answer the simple question of whether interpretations of guidelines per community plans, such as for setbacks, zoned density, height limits, etc., are objective or subjective.

And in fact, the city itself said they were only briefed on, that is argued their case on, plan interpretations not the Density Bonus Law.

But the appellate court gave only superficial attention to this question, instead using it as a pretext to get at what they really wanted to decide: “When a developer meets the requirements of the Density Bonus Law, a local government is obligated to permit increased building density, grant incentives, and waive any conflicting local development standards unless certain limited exceptions apply.” (Emphasis added.)

In other words, unless a “city can establish it would not result in identifiable and actual cost reductions to provide for affordable housing costs,” the appellate court would limit exceptions for every other criteria to just three: “that doing so (1) would have ‘a specific, adverse impact…upon public health and safety,’ (2) would have an adverse impact on any historic resource, or (3) would be contrary to state or federal law.”

(They also note recent changes removed ‘physical environment’ as an impact category from public health and safety, showing how the legislature has further whittled away local control.)

Going forward, the appellate court has affirmed any developer in the state claiming a density bonus on a project is free from *all* local planning constraints. And any municipality or community voice objecting to them bears a burden of proof under eviscerated terms.

What’s lost in the privileging of this one law are all the literally hundreds of other statutes governing general and community plans, the citizen structures empowered by them, and the mandate of the state to ensure orderly planning and land use.

No wonder the Building Industry Association pushed for this as precedent; and why San Diego and the other 478 members of the League of California Cities are against it.

There is a terrible truth revealed by this decision. It lays bare the stage machinery both sides have manipulated to parlay their pet schemes — but now would take public hands off the control levers.

Will this be the final tipping point against the developers’ regulatory capture of all three branches of state? Or will this be the final capitulation of the state to capital?