II. Johnston v. City of Hermosa Beach
The CCC’s inconsistent course of action arose in responding to a restrictive ordinance enacted by the city of Hermosa Beach in July 2016, which banned all STVRs in the city’s residential zoning districts within the coastal area but which permitted STVRs in commercial districts. The ordinance was enacted despite CCC’s written objections submitted at the public hearings. Despite the CCC’s objections, when the ban was enacted, the CCC failed to initiate a civil injunction action against Hermosa Beach or by intervening as a party in an equitable injunction action brought by aggrieved STVR homeowners to enjoin enforcement of the ordinance.
The preliminary-injunction motion asserted that, without having prepared an LCP certified by the CCC authorizing such a ban, the ordinance was void by reason of conflict preemption with the statutory policies of the Coastal Act; and, by lessening the density or intensity of STVR use, the ordinance constituted a “development,” requiring the city to issue a Coastal Development Permit (CDP) appealable to the CCC.
The failure of the CCC to intervene in the Johnston case, even as amicus curiae, enabled the Court of Appeals, Second Appellate District, to uphold the unconstitutional evasion of the Coastal Act by a city acting without having issued a CDP (subject to appeal to the CCC) or receiving a prior CCC certification of an LCP authorizing a ban on STVRs. The Court of Appeals misread California Public Resources Code § 30512.2, providing in part that “the commission is not authorized by any provision of this division to diminish or abridge the authority of a local government to adopt and establish, by ordinance, the precise content of its land use plan, by failing to include a key provision preceding the portion,it quoted:
(a) The commission’s review of a land use plan shall be limited to its administrative determination that the land use plan submitted by the local government does, or does not, conform with the requirements of Chapter 3 (commencing with Section 30200).
The Attorney General, acting on behalf of the CCC, compounded the problem by belatedly seeking amicus curiae status in the Johnston case only after the Court of Appeals opinion had been written, opposing publication of the opinion, rather than requesting the Court of Appeals en banc to reverse the decision or petition the Supreme Court to reverse the decision.
The Attorney General opinion letter sent to the Court of Appeals as amicus, on the issue of rejecting publication motions brought by city and county associations, strongly asserted that the city of Hermosa Beach was preempted by the Coastal Act to bar STVRs in the coastal areas where the city had neither prepared nor obtained a certified LCP nor issued a CDP.
The CCC engaged in similar reluctance to intervene in Surfrider, where the CCC appeared solely as amici curiae on the appeal of a trial court order, to object to a court issued injunction requiring a coastal landowner to open public access to the beach that theoretically could have resulted in a judicial or quasi-judicial taking against the state trial-court judge and the CCC. The Court of Appeal in Surfrider avoided such a judgment against the CCCby overruling the Superior Court order holding that there was a taking, on the basis that the private owner had failed to exhaust his administrative remedies by not applying for a CDP.
The rationale of the CCC for this questionable practice of objecting to ordinances banning STVRs in the coastal zone at legislative hearings but failing to enforce those objections by pursuing injunctions in the courts is difficult to determine. It could possibly derive from two scenarios: (1) a fear that injunctions against local governments could lead to judicial or quasi-judicial takings judgments requiring compensation from the CCC; or (2) fear of lobbying from city and county governments and associations seeking amendments to the Coastal Act, further transferring and accelerating power to local government to bar STVRs without having prepared a CCC-certified LCP, or reviewing on appeal from a CDP.
Since the unpublished Johnson Court of Appeals decision is of no binding legal effect, except to the unfortunate plaintiffs in the case, the Attorney General Opinion letter, Douda, Yost, and the Kracke and Surfrider decisions conclusivelyestablish that neither cities nor counties can enact bans on STVRs in coastal zones without authorization from a certified LCP or issuing a CDP for the ordinance as a “development” appealable to the CCC.
Nevertheless, subsequent to the Johnson decision, and supported by a recent student article that reaches the same conclusion as the Johnston decision without citing Johnston, the attorney general opinion letter in Johnston and the 2017 Kracke and Surfrider decisions; and the cities of Del Mar and Laguna Beach, subsequent to Surfrider, have passed bans on STVRs in the state’s coastal zones. The city of San Diego, having passed a similar ban, reluctantly repealed it following a ballot referendum petition to repeal the ordinance that was heading for a citywide vote.
III. Short-Term Vacation Rentals
Over the past nine years, the number of STVRs, and other housing that facilitates the “share” or “accommodation” economy, has grown rapidly throughout the United States. This increase has been largely assisted by websites such as Airbnb, on which homeowners may advertise their homes or parts thereof to rent to vacation travelers. Airbnb has a never-ending battle with government interference with—or banning of—short-term rentals.
The rapid rise of Airbnb has jolted the conventional hotel industry, as well as neighboring single-family homeowners. Residents of traditional single-family homes are often opposed to the increased numbers of transient renters, and these residents complain about noise, late night partying, drug and alcohol use, trash, crime, odors, lighting, and other alleged nuisances, creating a loss of the “sense of community,” as if, magically, rentals for thirty days or more within the same structures do not present such problems. STVRs have also come under criticism that such rentals may contribute to the removal of otherwise affordable housing units.
Responding to such neighborhood criticism, STVRs are often prohibited or regulated at the local government level through zoning and public nuisance laws, but effective enforcement is difficult due to the decentralized and Internet-based nature of the STVR industry in locations across the city or county.
In coastal areas of California, the situation differs because local planning and regulation of STVRs are controlled by the requirements of the Act. The Act “superimposes upon the planning, zoning and building regulation functions of counties and cities mandatory requirements.” The Act lays out state goals and policies for the coastal zone that then must be implemented at the local level. Before regulating STVRs, coastal cities and counties (“local governments”) must prepare and assemble land use plans, zoning ordinances, and maps for their coastal zone into a local coastal plan (LCP), which must then be certified by the California Coastal Commission (Commission) for conformity with Coastal Act goals and policies. The only exception to the certification of an LCP is the authority of a local government to adopt genuine public nuisance ordinances.
Once the LCP is certified, local governments may adopt zoning regulations or approve coastal development permits (CDPs) for projects, so long as the regulation “conforms” with the Act’s goals and policies as administratively interpreted by the Commission. The only statutory exception permits local governments to adopt public nuisance regulations without adopting a CCC-certified LCP, but the nuisance ordinance may not constitute a pretext to avoid its obligation to prepare and receive certification of an LCP.
In its Johnston opinion, the Court of Appeal—contrary to the Dana Point decision— authorized cities allegedly acting under their home-rule powers, in lieu of their nuisance powers, to evade the beach-access requirements of the Coastal Act by enacting zoning ordinances banning STVRs without having submitted an LCP and having it certified as being consistent with the Coastal Act’s Policies, or issuing a CDP requiring CCC approval on appeal. It is clear that by the principles of statutory interpretation no ordinances can be enacted that are inconsistent with the LCP and the goals and policies of the Coastal Act. In La Fe, Inc. v. Los Angeles County, 73 Cal. App. 4th 231, 239, 240 (1999), where the Court of Appeal held:
“[I]n construing a statute, a court [must] ascertain the intent of the Legislature so as to effectuate the purpose of the law.” In determining that intent, we first examine the words of the respective statutes: “If there is no ambiguity in the language of the statute, then the Legislature is presumed to have meant what it said, and the plain meaning of the language governs.” “Where the statute is clear, courts will not ‘interpret away clear language in favor of an ambiguity that does not exist.” If, however, the terms of a statute provide no definitive answer, then courts may resort to extrinsic sources, including the ostensible objects to be achieved and the legislative history. “We must select the construction that comports most closely with the apparent intent of the Legislature, with a view to promoting rather than defeating the general purpose of the statute, and avoid an interpretation that would lead to absurd consequences.” The commission’s construction of the statute is entitled to great weight.
Since the Coastal Act expressly authorizes the CCC to enact its own LCP where the municipality has not prepared one, the clear intent of the Act establishes that a city or county, without a certified LCP, cannot enact ordinances or issue CDPs in the coastal zone. In its unpublished opinion, the Court of Appeal erroneously found that “plaintiffs conceded in the trial court—and make no contrary argument here—that the Ordinance does not constitute a ‘development’ requiring a CDP.” In the light of the published Attorney-General opinion and the Kracke and Surfrider decisions holding that an ordinance banning STVRs in the coastal zone constitutes a “development” and requires a CDP subject to appeal to CCC, the Johnston unpublicized decision is simply erroneous as a matter of law.
Unpublished opinions are decisions that are not certified for publication in the Official Reports and may not be cited or relied on by other courts except by the parties seeking res judicata or collateral estoppel. After the Court of Appeal announced its unpublished decision, the California attorney general submitted a letter opinion dated February 12, 2018, requesting the Court of Appeal to deny a motion made by Hermosa Beach, and amicus curiae California League of Cities and California Association of Counties, to publish the opinion, in which the attorney general opined that the Hermosa Beach zoning ordinance was unconstitutional, being in direct conflict with the Coastal Act.
Since an unpublished opinion cannot be cited and is not binding on anyone other than the parties to the case, the attorney general’s Letter Opinion on behalf of the Coastal Commission declaring the unconstitutionality of the Hermosa Beach ordinance ordinances means that the Banning, Dana Point, Douda, Kracke, Malibu, Pacific Palisades,and Surfrider decisions will prevail.
IV. The Planning Requirement
A primary issue in the Johnston case concerned the applicability of state preemption law to zoning ordinances that have not been previously embodied in a local coastal plan or plan amendment certified by the California Coastal Commission.
Since the Coastal Act contemplates that both the state, through the CCC, and cities and counties share responsibility for implementing the Act, a mechanism was needed to provide the linkage for that cooperation. The genius shown by the legislators, in enacting the Coastal Act, was to establish mixed state-local planning that allows a city or county to propose a plan suited to its own and state needs, but subject to the overriding state interest that the plan implement, not contradict, the goals, policies, and implementation strategies of the Coastal Act as promulgated by the CCC before certifying it.
The entire scheme for regulating the coastal areas lies in the preparation and certification of an LCP before any implementing action by the local government can occur. In Yost, the California Supreme Court held that, in the case of mixed state and local concerns under the Coastal Act, “the act establishes a regime of state regulation more intrusive than the local government planning and zoning law. It not only sets forth statewide planning goals (Pub. Resources Code, § 30200 et seq.), but, unlike the Government Code planning law, it dictates that the LCP required by the Act be approved by a state body, the Coastal Commission (id. § 30512), to be consistent with the Act. The Supreme Court in Yost concluded: “There is no doubt that the Coastal Act is an attempt to deal with coastal land use on a statewide basis. That state planning requirement is mandatory before local government authority can be exercised.” (emphasis added).
Pursuant to Banning, Dana Point, Douda, Kracke, Malibu, Pacific Palisades,and Surfrider, the Coastal Act describes two methods by which the CCC ensures that city or county zoning ordinances comply with the Act’s coastal goals and policies: (a) where a city or county prepares an LCP (including proposed zoning ordinances) and the Commission certifies the LCP as conforming with the goals and policies of the Act; or (b) if a local government does not have a certified LCP, or the CCC rejects certification of a proposed LCP, for inconsistency with the Coastal Act’s policies in Chapter 3, the CCC remains in charge over all city or county actions.
The CCC has three paths that it can follow pursuant to (b) above: (1) it can itself prepare and adopt an LCP for the city or county (as the Act specifically grants the CCC an optional mandate to create and adopt an LCP for cities and counties that have not adopted one, Pub. Res. Code §§ 30500, 30517.5; (2) it can exercise its appellate jurisdiction to review all CDPs and all other local actions pursuant to §§ 30602 and 30603; and (3) pursuant to §30116, in sensitive coastal resource areas (defined as including beach access and visitor accommodation), the CCC is obligated to reject developments that contravene the policies of the Coastal Act.
It has now been forty-three years since the California Coastal Act was passed, yet twenty-six coastal cities and counties still do not have a certified LCP, either because they have never submitted one or because their submissions have been denied by the Coastal Commission as not being in conformity with the policies of the Coastal Act. The role of the Coastal Commission in approving development (by enactment of ordinances or approval of development projects) varies depending on whether or not the locality has a certified local coastal program. Only after an LCP has been certified, does the coastal development permitting authority and legislative zoning power pass from the Coastal Commission to the local government.
With a few exceptions for emergency situations and governmental entities, “any person . . . wishing to perform or undertake development in the coastal zone . . . [must] obtain a coastal development permit.” If a city or county does not have a certified local coastal program, development permits for that city or county can (in most cases) be issued by the Coastal Commission. The proposed development must be in conformity with the policies of the California Coastal Act and not jeopardize the completion of a local coastal plan.
Once an LCP is certified, authority to issue coastal development permits for the areas covered by the plan passes to the city or county. The city or county cannot, however, enact zoning ordinance amendments, or issue CDPs and other zoning permits for “development” that does not conform with the LCP.
The Act expressly states: “[T]he Commission shall require conformance with the policies and requirements of Chapter 3 . . . only to the extent necessary to achieve the basic state goals specified in Section 30001.5.” The Act prescribes that “the precise content of each local coastal program shall be determined by the local government” and that the program need not be “so detailed as to require amendment and commission review for minor changes.”
All permits for developments along the shoreline between the water and the nearest public road must also contain specific findings that the development conforms to the public access and public recreation policies of the Coastal Act. Given concentrations of vacation rentals near beaches, coastal views, and aquatic recreation, specific findings of consistency with the LCP are necessary for coastal development permits involving regulation of STVRs.
Local ordinances are theoretically free to impose additional restrictions and to reflect additional local concerns and priorities beyond those of the Coastal Act. Section 30005 of the Coastal Act states that “no provision of [the Act] is a limitation on . . . the power of a city or county or city and county to adopt and enforce additional regulations, not in conflict with this act, imposing further conditions, restrictions, or limitations with respect to any land or water use or other activity which might adversely affect the resources of the coastal zone.” In the words of the California Supreme Court, the city or county “can decide to be more restrictive with respect to any parcel of land, provided such restrictions do not conflict with the act.” Nevertheless, a city or county cannot allow the enactment of legislation that conflicts with the Act’s policies.
V. State Preemption As Applied to the Coastal Act
The general principles governing state preemption of local regulation are well settled. Where otherwise valid regulations “conflict” with state law, they are preempted and are legally deemed unconstitutional and void. Under the principles of statutory interpretation, four types of conflicts give rise to state law preemption: (1) state statutes that expressly or by legislative implication manifests that the state has “fully occupied” the field of regulation; (2) the local ordinance is contradictory or inimical by directly requiring what the statute expressly forbids, or prohibits what the statute expressly demands; (3) the local legislation is duplicative or coextensive with the statute or general law; and (4) the subject matter has been partially covered by general law, and the subject is of such a nature that the adverse effect of a local ordinance on the transient citizens of the state outweighs the possible benefit to the locality.
Due to the authority given to cities and counties after the LCP is certified, state preemption, under the Coastal Act, arises only in the third sense above, when local government regulatory, planning, and nuisance powers are in conflict with the Act as a general state law or inconsistent with the goals and policies of the Act as interpreted by the Commission in its quasi-legislative and administrative functions. Conflict occurs when a local government permits what is prohibited by the Act, or when it prohibits what is permitted by the Act. Conflict is the operative factor when local governments, not field preempted, seek to ban STVRs.
Because of the powers reserved for local governments, the Coastal Act is not a field-occupying preemptive law under which local governments are able to act only where the Act does not prevent their doing so. The comprehensive nature of the Act has been consistently recognized and reaffirmed by case law, since at least the 1984 case of Yost v. Thomas, which held that the Coastal Act “was enacted by the Legislature as a comprehensive scheme to govern land use planning for the entire coastal zone of California.” The California Court of Appeal has noted: “A fundamental purpose of the Coastal Act is to ensure that state policies prevail over the concerns of local government.” Yost held that the Act does not occupy the entire field but instead leaves substantial authority to local governments with respect to preparing the LCP and regulating specific local actions through legislation and development approval as long as such implementation does not conflict with the Act and is consistent with the certified LCP. The Court specifically held that the Act contemplates “local discretion and autonomy in planning subject to review for conformity to statewide standards.”
Although the Coastal Act by its express terms does not occupy the field, it greatly empowers the Coastal Commission to implement the Act’s policies. As a creation of the state, the Coastal Commission is not bound by the “separation of powers” doctrine in reviewing local legislative decisions, and courts have accordingly held that it can and must do more than simply review local legislation “for arbitrary and capricious enactments” or “for conceivable conformity to the state standards rather than actual compliance.” The Commission, instead, “must exercise its independent judgment to decide if such conformity has been achieved because that decision cannot be completely delegated to the local entity where it is likely to be subject to local economic and political pressures which cannot so readily influence the CCC.”
In practice, this directive significantly restricts cities’ and counties’ ability to depart from state policies as interpreted by the Coastal Commission. According to an Opinion of the California Attorney General, section 30005’s allowance of local restrictions applies to local actions “not in conflict with the Act,” and a city or county may not lawfully prohibit a use of land permitted by a certified LCP without Commission approval, or allow a use that has been prohibited. As STVRs are not prohibited by the Act and the Coastal Commission has looked upon them favorably as being allowed and encouraged by the Act’s policies, this directive does not bode well for cities seeking to ban STVRs.59
The CCC’s position on STVRs for providing public recreational access is factually supported. Access to the California coast has become increasingly expensive when factors such as transportation, parking, and lodging are considered, threatening to make the beach and coast realistically inaccessible for poor and even middle-class citizens. Such financial exclusivity, moreover, exacerbates geographical, cultural, and socioeconomic factors that have kept historically marginalized communities from enjoying coastal access. Researchers have identified the high cost of accommodations near the coast as a major part of the accessibility problem. The lack of affordable coastal lodging has garnered mainstream media attention, and state legislative efforts have been made to increase, rather than reduce, the coastal vacation lodging supply.
VI. Partial Restrictions on STVRs
Although California cities and counties cannot enact a total ban on STVRs, a wide range of limited regulatory options are still available. The CCC has historically supported limited regulation of vacation rental that provide for any or all of the following conditions:
- Limits on the total number of vacation rentals allowed within certain areas (e.g., by neighborhood or by communitywide ratios);
- Limits on housing types that can be used as a vacation rental (disallowing vacation rentals in affordable or quasi-public housing for veterans, the homeless, halfway houses, senior citizens and disabled persons);
- Limits on the maximum number of vacation rental occupancies during a given year for each unit;
- Limits on the number of days in a month that a residential unit can be used as a vacation rental;
- Requirements for twenty-four-hour management and/or response, whether on or offsite:
- Requirements regarding on and off-site parking, trash pickup, noise and light controls;
- Signage requirements, including posting twenty-four-hour contact information and restrictions on-site and within units incorporating operational requirements and default or violation consequences;
- Requirements for distance standards between STVR uses in areas of high volume and oversaturation in the neighborhood;
- Payment of transient occupancy tax; and
- Requirements for owners to respond to complaints and to enforce against violations of vacation rental requirements for government revocation of vacation rental permits.
These Coastal Commission views were published prior to Surfrider by at least one lower court in California, the Santa Barbara County Superior Court, which held in the recent case of Kracke v. City of Santa Barbara that, “[b]ut for the existence of STVRs with the City’s Coastal Zone, the segment of the public who use STVRs would be unable to access and enjoy the City’s Coastal Zone.” The court accordingly concluded that after city actions to classify STVRs as hotels and restrict them to the city’s R-4 and commercial districts, “tens of thousands of people [were] being deprived of the option of staying at an STVR in the City’s Coastal Zone,” and that “the City’s implementation of the STVR ban and its broad enforcement efforts intentionally caused a substantial, direct, and quantifiable change in the density and intensity of use of the land and the intensity of use of water or access to the coast for potentially hundreds of thousands of visitors on an annual basis.” The City’s actions, therefore, “amount[ed] to a ‘development’ under the Coastal Act and required a CDP, or alternatively, an amendment to the City’s certified LCP.
The Commission’s announcement of its views on limited regulation of STVRs is in conformity with many of its past decisions regarding LCPs that sought to ban or regulate STVRs. The City of Pismo Beach and Santa Cruz County provide illustrative examples, though many more are available. In 2016, Pismo Beach sought an amendment to its LCP, seeking to define STVRs (previously unaddressed in the LCP) and ban them from R-1, R-2, and R-3 residential zones in the coastal zone, instead limiting them to commercial and hotel zones. The Coastal Commission denied this amendment, finding that there was little other vacation housing in much of the coastal strip, and banning STVRs would thus be inconsistent with the public access policies of the Coastal Act. The Commission noted that it had historically not approved LCP amendments that outright ban STVRs, but had approved regulations banning STVRs in specific areas based on rental supply and neighborhood capacity, such as those in LCP amendments for Imperial Beach, Humboldt County, San Luis Obispo County, and Santa Cruz County.
Santa Cruz County sought its LCP amendment in 2011 and, in contrast to Pismo Beach, did not seek to effectively ban STVRs, but instead sought to implement a number of limited regulations regarding STVRs, including a permitting/registration process, a Transient Occupancy Tax (TOT), signage requirements, a dispute-resolution process, limits on the number of guests allowed at any one time, and the number of vehicles allowed per vacation rental unit. This plan was approved by the CCC as a regulation that did not unduly restrict public access to the coast.
The Coastal Commission clarified its position:
[V]acation rental regulation in the coastal zone must occur within the context of your local coastal program (LCP) and/or be authorized pursuant to a coastal development permit (CDP). The regulation of short-term/vacation rentals represents a change in the intensity of use and of access to the shoreline, and thus constitutes development to which the Coastal Act and LCPs must apply. We do not believe that regulation outside of that LCP/CDP context (e.g., outright vacation rental bans through other local processes) is legally enforceable in the coastal zone, and we strongly encourage your community to pursue vacation rental regulation through your LCP.
Since “development” includes anything that “change[s] the density or intensity of use of land,” including zoning ordinances banning STVRs in the Coastal Act uses, the published opinion in Surfrider overrides the non-published opinion of Hermosa Beach, where the city made such an argument. A 2016 ordinance in the city of Hermosa Beach made it “unlawful for any person to offer or make available for rent or to rent . . . a residential dwelling, a dwelling unit or a room in a dwelling for less than thirty (30) consecutive days,” or to “maintain any advertisement of [such a] rental.” The Coastal Commission contacted the city and repeatedly warned that a CDP was necessary for such an ordinance and that such a blanket STVR ban was preempted by the policies of the California Coastal Act. When litigation arose over the ordinance, however, the city erroneously argued that it did not need a CDP to pass the ordinance because “[t]he Act’s definition of ‘development’ does not extend to the adoption of a zoning ordinance of general applicability. Development means a ‘change in the density or intensity of use of land’ not a change in local law governing the density or intensity of use of land.”
The city also more broadly argued that the Coastal Commission does not actually have power over a municipality’s legislative actions. The city went so far as to claim that because the Coastal Act leaves it to the a municipality to determine the content of its own land use plans and only gives the Coastal Commission the power to enforce the Act’s policies, “if a city without a certified LCP were to amend its zoning code to permit strip mining, the Coastal Commission could deny a CDP [to a mine operator] if it found the proposed development inconsistent with Coastal Act chapter 3 policies,” but “cannot prevent that hypothetical (or any) city from adopting its own zoning rules or otherwise exercising its police powers.” It relied on somewhat dubious interpretation of Dana Point, claiming that “the Court of Appeal . . . found that the Coastal Commission’s authority is limited to quasi-judicial permitting functions. [T]he Commission does not adjudicate the City’s legislative prerogative.”
VII. Advertising
Many cities and counties see the increase in STVRs and associated problems as being driven by the rise of online marketplaces and hosting platforms, and have attempted to restrict or ban advertisement of STVRs on these platforms. The Hermosa Beach ordinance, for instance, not only banned STVRs themselves, but made it illegal to “maintain any advertisement of [such a] rental,” “whether in a magazine, newspaper, handbill, notice, display, billboard, poster, email, Internet website or application, or any other form,” Such restrictions are intended to impose liability on Airbnb, Home Away, and other similar online STVR facilitators, which would no doubt be more effective in restricting STVRs than in attempting to enforce ordinances against individual rental operators. However, because these prohibitions on advertising amount to a content-based restriction on speech, they are on shaky First Amendment grounds and likely cannot survive a legal challenge.
Content based restrictions on speech are allowable only where they are necessary to serve a compelling government interest. They are presumptively unconstitutional and justified only if the government proves they are narrowly tailored to serve the compelling government interests. In the case of STVRs, it is unlikely that a compelling governmental interest is at stake, as such interests, analogous to those required for nuisance abatement, typically involve basic public-safety concerns.
Even if mitigating effects of STVRs are a compelling government interest, content-based restrictions, such as permanently banning STVR advertising, is impermissible, especially if content-neutral ordinances regulating STVRs may achieve the same ends. Both the United States and California Supreme Courts have held that advertisements for illegal activity have no free speech protection.
A further difficulty exists in regulating STVR advertising and hosting services on the Internet, where the vast majority of such services are to be found. Under the federal Communications Decency Act, “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” This provision prevents website operators from being liable for the actions of others using their websites. Importantly for cities and counties attempting to regulate STVRs, this law establishes that “no cause of action may be brought, and no liability imposed, under any State or local law that is inconsistent with the Communications Decency Act.”
The Communications Decency Act makes it difficult for websites to restrict or limit STVR hosting websites, without running the risk of costly federal litigation. The city of Anaheim in 2016 enacted a sweeping “Short-Term Rental Ordinance,” which not only banned STVRs from all zones in which residential uses were permitted but also imposed major restrictions on websites hosting advertisements for STVRs:
No hosting platform shall list or advertise a short-term rental for which the city has not issued a permit. Upon written or electronic notification from the city that the city has not issued a permit for a short-term rental which is listed or advertised on the Internet web site provided or maintained by a hosting platform, the hosting platform shall discontinue and remove the listing or advertisement within ten (10) calendar days from the transmittal date of the notification. The hosting platform thereafter shall not list or advertise the short-term rental without written certification from the city that the required permit has been issued . . . . A hosting platform shall not otherwise facilitate . . . the occupancy of a short-term rental if the occupancy will violate any ordinance, regulation or law of the city.
Having faced the prospect of federal Communications Decency Act litigation, the city decided not to enforce that portion of its ordinance against rental hosting websites. By imposing requirements on hosting websites as though the website operators themselves, rather than their users, were “listing” or “advertising” the rentals, the city is treating the website provider as the speaker or publisher of the information, which is impermissible under the First Amendment and the Communications Decency Act.
VIII. STVRs as Vested Non-Conforming Uses
Aside from being disfavored by Coastal Act policies, local government STVR bans also raise the prospect of creating a constitutional due-process or takings violation if existing STVRs with valid nonconforming use vested rights are barred. Unlike nuisance abatement laws, zoning ordinances cannot destroy existing uses, but can prohibit these uses in the future. Unless the city succeeds in declaring STVRs a nuisance (as nuisance regulations are retroactive to destroy vested rights), existing STVR operators have vested rights that cannot be destroyed by any land-use or zoning ordinance the city enacts.
Governments have the constitutional power to limit land uses and allocate uses into different zoning districts. Zoning may not, however, destroy “fundamental” or “vested” rights, (i.e., rights or uses the destruction of which would substantially deprive a property owner of his or her interest in the property). Rights or interests that have been held to be “vested” or “fundamental” cannot be impaired or affected by new legislation:
[T]he right of an owner of a vested interest in real property as to an agency action that substantially affects that interest (L&M Professional Consultants, Inc. v. Ferreira, 146 Cal.App.3d 1038 (1983)); and the right of an owner of a business as to an agency’s denial of a zoning change or permit approval that effectively prevents continuance of the business (Hansen Brothers Enterprises, Inc. v. Board of Supervisor, 12 Cal.4th 533 (1996)).
Prohibition of existing STVRs would substantially affect the interests of the owners of those existing houses and apartments, many of whom acquired their properties for the purpose of renting as STVRs. An exception prevails if, at the time the nonconforming use was built or sprang into existence, the existing zoning ordinance had previously expressly prohibited the use. In their answering brief to the motion for a preliminary injunction filed in the Superior Court in the Johnston case, Hermosa Beach argued that, since STVRs were not ever expressly permitted as a lawful use, they were prohibited. No other case in California supports the doctrine that a lawful use is prohibited if not expressly permitted. Such a proposition is an absurdity.
STVRs, outside of the coastal zone, established after the zoning ordinance has expressly prohibited STVRs in their zoning district, will require variances to conduct their rental purpose. A variance is also used in zoning parlance for an application to establish an existing use as a non-conforming use. Under California law, a use not prohibited in the zoning ordinance at the time the nonconforming use sprang into existence will be granted vested-use status.
Similarly, the Telecommunications Act mandates that state or local regulation, governing placement and construction of personal wireless service facilities, “shall not prohibit or have the effect of prohibiting the provision” of such services.” A showing of express prohibition is required. Simply demonstrating that the locality could provide services for such facilities is insufficient.
An exception exists to finding substantive due process violations under both the U.S. and California Constitutions for immediate termination of preexisting use rights, if the government compensates through providing a reasonable period of amortization. The California Court of Appeal describes how a subsequent limitation on existing property uses could be a violation of due process:
Gage became vested with the right to use the property for the purpose that it was used; insofar as the Los Angeles Municipal Code purports to require the abandonment of the use of the building on Lot 221 as an office for the plumbing and plumbing supply business or the use of Lot 220 for the open storage of plumbing supplies in the manner that it has been and is being used by Gage, it is void and of no legal effect.
Because of the constitutional difficulties in banning valid existing non-conforming uses, except where operation is a public nuisance, a provision exempting existing uses from new zoning requirements “is ordinarily included in zoning ordinances.” This exemption “may either exempt an existing use altogether or allow a limited period of continued operation for amortization of the owners’ interest in that use.” A city or county could prohibit, limit, or regulate the operation of a STVR or boarding rental in a single-family home located in a low- density residential (R-1) zone, outside the coastal zone.
IX. Recommendations
To avoid further dispute over the powers of cities and counties to take any action to regulate land uses or permits in coastal zones without first preparing a local coastal program and plan certified by the CCC, it is recommended that (1) a new regulation be enacted by the CCC; (2) the CCC request a new Opinion from the Attorney General, adopting the recent judicial decisions that have resolved that ordinances (constituting “development” or “CDPs”) banning STVRs in the coastal zone cannot escape CCC review, together with the Attorney-General Opinion letter of February 17, 2018, in the Johnston case; and (3) to further substantiate (1) and (2), the CCC should issue a new quasi-legislative rule; and (4) as a matter of last resort, submit amendments to both the Government Code and Coastal Act, as set forth ahead, where it determines that strong lobbying by cities, counties and homeowners associations will not defeat such legislation.
A recent Stanford Environmental Law Journal article, authored by Joel Jacobs, Deputy Attorney-General in San Diego, who supervises enforcement of the Coastal Act, similarly calls for an amendment of the Coastal Act when a local government has declined to implement the recommendations of the CCC’s periodic review.
A. Proposed Commission Quasi-Legislative Regulation
Delete Current Rule: 14 CCR § 13330.
Title 14 Natural Resources, Division 5.5 California Coastal Commission, Chapter 7, Coastal Development-Permits, Subchapter 1.5 Development and Coastal Development Permits Issued and Reviewed by Local Governments and the Commission Pursuant to Certified Land Use Plans, 14 CCR §13330 Scope; 14 CA ADC § 13330.
The scope of this section provides: “The procedures of this subchapter shall apply to appeals to the California Coastal Commission where the coastal development permit authority has been delegated to a local government prior to certification of its local coastal program pursuant to Public Resources Code Sections 30520, 30600.5 and 30624. The procedures shall not apply to coastal developments specified in PRC Sections 30519(b) and 30601 or with respect to any development proposed by any state agency where, pursuant to PRC Section 30600.5(b), direct application must be made to the commission,” and substitute a new 14 CCR § 13330. City and County Local Programs and Plans:
(a) It is the purpose of this regulation to authorize city and county adoption and administration of zoning laws, subdivision regulations, environmental, nuisance and health and safety ordinances, general, area and specific plans (including the mandatory local coastal element of the general plan), and quasi-legislative rules and regulations (“local programs”), so long as such local programs and plans are first submitted to the Commission for certification for their compatibility and consistency in every detail with the goals and policies of the Coastal Act as established by (1) the Coastal Act; (2) Commission quasi-legislative regulations and staff reports and official letters; and (3) judicial and administrative decisions regarding coastal development permits and development, as defined by the Coastal Act.
(b) It shall be a mandatory requirement that a city or county prior to exercising any legislative, administrative, or ministerial function set forth in subparagraph (a) above, with respect to coastal area land uses, coastal development permits and development, as defined by the Coastal Act, shall prepare a local coastal program and plan, certified by the Commission, and that such local coastal program and plan shall be fully compatible and consistent with the goals and policies of the Coastal Act. The Commission declares that, in enacting this regulation, it is its intention to provide that, until a city or county prepares such local coastal, plan and program, and obtains Commission certification thereof, such city or county shall not exercise any ministerial, administrative, or legislative functions, including, but not limited to, enactment of ordinances; issuance of conditional use and building permits or certificates of occupancy; coastal development permits; enactment of quasi-legislative or administrative regulations; and enactment of zoning, health, environmental or nuisance ordinances within the jurisdictional boundaries of their coastal zone; and
(c) Certification by the Commission shall assure that once such local programs and plans are determined to be compatible and consistent in every detail with the goals and policies of the Coastal Act as established by the Commission pursuant to the Coastal Act and quasi-legislative regulations and administrative decisions enacted by the Commission over coastal development permits and development, as defined in this Act, cities and counties shall have full power and authority to act within the Coastal Zone pursuant to the provisions of §30005.5. “Local governmental powers; construction” and to assure that the Commission shall not require any local government, to exercise any power it does not already have under the Constitution and laws of this state or that is not specifically delegated pursuant to Section 30519.
Proposed California Government Code Amendment
§ 65800. Purpose (the bolded words constituting the new amendment)
It is the purpose of this chapter to provide for the adoption and administration of zoning laws, subdivision regulations, environmental, nuisance, and health and safety ordinances, rules, and regulations by counties and cities ) (“local programs”), as well as to implement such general plan as may be in effect in any such county or city so long as such local programs are compatible and consistent in every detail with the goals and policies of the Coastal Act as established by the California Coastal Commission through its quasi-legislative regulations and administrative decisions over coastal-development permits and development, as defined in the Coastal Act. It shall be a mandatory requirement that a city or county, prior to exercising any legislative, administrative or ministerial function with respect to coastal area land uses and development, shall prepare a local coastal program and plan, as defined in the Coastal Act and certified by the Commission, that such local coastal program and plan are fully compatible and consistent with the goals and policies of the Coastal Act. The Legislature declares that in enacting this section it is its intention to provide that until a city or county prepares such local coastal program and plan and receives Commission certification thereof, such city or county shall not exercise any ministerial, administrative, or legislative functions, including, but not limited to, enactment of ordinances; issuance of conditional use and building permits or certificates of occupancy; coastal development permits; enactment of quasi-legislative or administrative regulations; and enactment of zoning, health, environmental, or nuisance ordinances within the jurisdictional boundaries of the coastal zone.
Proposed Coastal Act Amendment
Pub. Resources Code, § 30001, Legislative findings and declarations; ecological balance
(e) It is the purpose of this chapter to provide for the adoption and administration of zoning laws, subdivision regulations, environmental, nuisance, health and safety ordinances, general, area, neighborhood, and specific plans (including the mandatory local coastal element of the general plan), quasi-legislative rules and regulations by counties and cities) (”local programs”), implementing the local coastal element of the general plan so long as such local programs and plans comply with subparagraph (g) below.
(f) Development, as defined in this Chapter, shall include, but not be limited to, city and county ordinances, regulations, and issuance of conditional use permits, building permits, certificates of occupancy, planned unit developments, and variances, and such development be compatible and consistent in every detail with the goals and policies of the Coastal Act.
(g) Every city or county, prior to exercising any legislative, administrative, or ministerial function with respect to coastal area land uses and development, as listed in subparagraph (f) above, shall prepare a local coastal program and plan as defined in this Act, certified by the Commission that such local coastal program and plan is fully compatible and consistent with the goals and policies of the Coastal Act. The Legislature declares that, in enacting this section, it is its intention to assure that, until a city or county prepares such local coastal plan and program and obtains Commission certification thereof, such city or county shall not exercise any ministerial, administrative, or legislative functions within the coastal area, including, but not limited to, enactment of general, specific, area, neighborhood plan or general plan elements; any interim or permanent ordinances or moratoria embracing zoning, subdivision regulations, environmental, nuisance, health, safety and housing ordinances, and quasi-legislative rules and regulation,s as well as to implement such general, specific, area, or neighborhood plans as may be in effect in any such county or city.
(h) Certification by the Commission shall ensure that once such local programs and plans are determined to be compatible and consistent in every detail with the goals and policies of the Coastal Act as established by the Commission through this legislation, quasi-legislative regulations, and administrative decisions enacted by the Commission over coastal development permits and development, as defined in this Act, cities and counties shall have full power and authority to act within the Coastal Zone pursuant to the provisions of § 30005.5, assuring that local government may exercise any power it has under the Constitution and laws of this state or as specifically delegated to cities and counties pursuant to § 30519 of this Act.
