A land use diversion, to take you into the weekend. As land users know, the vested rights and zoning estoppel doctrines are all about timing. When did the government gave the green light” (however that is defined in your jurisdiction), what did the property owner do after that, and when did the government decide “hey, wait a minute, we’ve changed our mind” about that earlier green light? For more, see this law review article we co-authored a few years ago that highlights these dynamics. Even the title reflects that it is all about timing: “Arrow of Time: Vested Rights, Zoning Estoppel, and Development Agreements in Hawaii.”
As we wrote, “These closely-related principles permit the government to retain flexibility in land use planning only if a property owner has not proceeded sufficiently along the development path that it would unconstitutional or unfair to prevent it from completion.”
Well, here’s an opinion from the California Court of Appeal that illustrates that principle. In Stewart Enterprises, Inc. v. City of Oakland, No. A143417 (June 23, 2016), the court concluded that a property owner had vested rights to build a crematorium. The court rejected the city’s argument that a subsequently-adopted ordinance requiring a conditional use permit for new crematoria prohibited the owner from going forward.
We won’t go into the details of the case, but vested rights mavens will be familiar with the basic tale: the crematorium was okay under existing law, and after purchasing the property, it obtained a building permit from the city. The city’s own ordinance provided that after a building permit is secured, “neither the original adoption of the zoning regulations nor the adoption of any subsequent rezoning or other amendment … shall prohibit the construction … authorized by said permit.”
But crematoria are the type of LULU’s that can get neighbors up in arms, which predictably did. Responding to these concerns, the city adopted an interim “emergency ordinance” that required a conditional use permit for new crematoria. This was, the ordinance, noted, “necessary to preserve the public peace, health, welfare or safety … of the community.” Not thinking it fair that it should go get a CUP, the owner sued, alleging, among other things, that its rights had vested.
The trial court and the court of appeals agreed. The city focused its arguments on the police power and the necessity for the CUP requirement, but the court held that the city had not introduced enough evidence that allowing the already-permitted crematorium to go forward would be so detrimental to the public welfare. Slip op. at 10. This really wasn’t an emergency, at least an emergency of such magnitude that it would justify stopping the construction. There was no “menace to the public health and safety or a public nuisance.” Slip op. at 12.
The court also rejected the city’s claim that the new CUP ordinance “trumped” the permit vesting ordinance, and any rights which the owner gained there. The court held that the city’s timing was all wrong. It’s not whether the CUP ordinance was a good idea, but whether it was adopted after the owner’s rights had already vested:
These argument are misdirected. The determination whether Stewart had a vested right in the building permit “is not made by looking at the effect of the [City’s] subsequent enactments but is made as of the time” Stewart obtained the permit. (Davidson, supra, 49 Cal.App.4th at pp. 647-648.) And under its plain terms, the permit-vesting ordinance conveyed a vested right because it shielded the holder of a lawfully issued building permit from having to comply with any subsequently adopted zoning regulations if such regulations would “prohibit the construction . . . authorized by said permit.”
Slip op. at 8. That’s what vested rights are all about.
Finally, the court also rejected the city’s claim that requiring a CUP wasn’t a prohibition of the owner’s right to build. It didn’t ban building, only required the owner to go get another permit. Not so, held the court, “prohibit” here means “to prevent or hinder,” and to make the owner go get another permit would certainly do that. It couldn’t build the already-permitted crematorium until it did. “The possibility that Stewart could regain the right to build the crematorium if it applied for and was granted a CUP does not change this fact.” Slip op. at 10.
Build it, and they will come.
Final postscript: the city subsequently repealed that “vested rights” ordinance. The City Attorney is on the job, it appears.
Stewart Enterprises, Inc. v. City of Oakland, No. A143417 (Cal. App. June 23, 2016)