- November 12, 2019
- Posted by: Hanson Law Firm
- Categories: Real Estate, War Story Wednesdays
So, who’s heard of a regulatory taking?
Basically, it’s when a government regulation limits your use of private property so much, it might as well be government property. It’s still yours, in name only. You can’t use it, can’t make money off it, nada.
So, who’s heard of the California Coastal Commission (CCC… no, let’s go with the sleeker, more San Fran/tech C³)?
“To protect, conserve, restore, and enhance the environment of the California coastline.” A noble cause, for sure. One of the ways it enforces this mission is the Coastal Act. If your property is in a coastal zone, you need a Coastal Development Permit to, well, develop your property – not just a house, mind you, but even something as small as sticking up a “no trespassing” sign to keep pesky long-haired teens off your slice of beach. In some areas, you need to apply to your local authorities for a permit, but in others, you’ll need to apply to your local authorities and to our buddy, the C³. These areas are known as “dual permit jurisdictions.”
So. What does one thing have to do with the other? Well, in law, sometimes… worlds collide. This is one such time.
Mark and Bella Greene owned a gorgeous little beachside duplex in Playa Del Rey. Their son and his family lived there, but the elder Greenes wanted to remodel the property enough to turn it into a cozy place to spend their golden years. A planned 1,200 square feet expansion would’ve moved their current 15-foot setback to 1.5 feet at ground level, and zero (0) feet on the second floor. Additionally, they wanted to build a seawall. Here’s where it gets a little tricky.
Now, the Greenes’ project wouldn’t have involved any zoning variances, but the City of Los Angeles had their own plan: building a public walkway called “Ocean Front Walk.” The walkway didn’t exist yet (because, you know, public projects get stuck in development hell longer than most Hollywood flicks), but it was a sure thing.
The property was in a dual jurisdiction area, and the Greenes got their plans approved by the City without too much trouble. The C³, however, proved more of a challenge. The Commission recommended a 5-foot setback from the property line, because the proposed 1.5 feet would intrude on the planned walkway: people would assume the area in front of the house was private property, homeowners and workers would have to occupy the walkway to conduct maintenance on the home, and there’s a history of people building too close to the property line using the adjacent public area as if it were theirs. The Commission cited safety concerns due to rising sea levels to further justify the 5-foot setback, and asked the Greenes to abandon the seawall idea.
The Greenes weren’t happy.
In court, the prosecution argued that the Commission’s recommendations distorted the truth about the project and the area it was to be executed. By misrepresenting the Greenes’ plans for the Commission’s own gain (presumably), and denying the family’s right to enjoy their property at their discretion when (according to the prosecution) the expansion wouldn’t have impacted the City’s projected walkway, the C³ was infringing on their constitutional rights. To quote them: ˮ Commission bureaucrats may not impose conditions on property use based on speculation unsupported by substantial evidence that the use is causing a public harm that requires mitigation.ˮ
Well, quite. So, what happened?
After a first hearing, the trial court denied the Greenes’ petition and the takings claim, so the prosecution appealed. The Court of Appeal doubled down on the decision, dismissing the sea level concern but pointing out that the impact on public access to the walkway was well founded. The Greenes hadn’t managed to provide adequate rebuttal to the Commission’s arguments, waiving their right to pursue them in court. The Greenes tried to say that there was no evidence the Ocean Front Walk would ever be completed, so their expansion couldn’t interfere with it, but the Court of Appeal stated that though construction was “intermittent,“ the City had “consistently required all development of beachfront property to include construction of part of the walkway or pay an in lieu fee. This was substantial evidence that the walkway would continue to be built, albeit slowly.“ Predictably, the Greenes lost the case.
This case is pretty specific – a lot of elements came together to complicate it more and more, but the basic lesson here is that, for now, the California Coastal Act (enforced by our friends at the Commission) will bar a takings challenge if an applicant doesn’t assert this challenge during the permit proceedings. It’s not too different from a lot of other cases, in that respect: before you make any real estate moves, legal or construction-related or whatever else, leave no stone unturned during your research!