TAHOE AND BEYOND:  DEFENSIBLE MORATORIA

California’s Experience
APA NATIONAL PLANNING CONFERENCE

March 29 – April 2, 2003

Denver, Colorado

April 1, 2003

Daniel J. Curtin, Jr.
Attorney at Law
daniel.curtin@bingham.com
Bingham McCutchen, LLP

DANIEL J. CURTIN, JR.
Daniel J. Curtin, Jr. concentrates his practice on local government and land use law representing both private and public-sector clients.  He is a member of the firm of Bingham McCutchen LLP in the Walnut Creek office.
Mr. Curtin serves as Immediate Past Chair and on the Council, the governing body, of the State and Local Government Law Section of the American Bar Association.  He was Past Chair of the Land Development, Planning & Zoning Section of the International Municipal Lawyers Association (formerly NIMLO).  He is past Vice‑Chair of the Executive Committee of the Real Property Law Section of the State Bar of California.  Mr. Curtin has also served as President of the City Attorneys’ Department of the League of California Cities, as a member of the Board of Directors of the League, and as Regional Vice President of the International Municipal Lawyers Association. 
In recognition of his extensive contributions to NIMLO and to the entire municipal law community nationwide, as well as his years of leadership and service to the legal profession, Mr. Curtin was honored with NIMLO’s Charles S. Rhyne Award for Lifetime Achievement in Municipal Law.  He is the recipient of the American Planning Association’s National Distinguished Leadership award for 20 years of writing, teaching, encouraging and supporting planning ideas.  He also was named Honorary Life Member of the California Park and Recreation Society in recognition of his exceptional service to the field of parks and recreation.
Mr. Curtin is the author of numerous publications on California land use and subdivision law, which have been cited frequently by the California Courts, including “Curtin’s California Land Use & Planning Law,” published and revised annually by Solano Press, “Subdivision Map Act Manual,” published by Solano Press and “Subdivision Map Act and the Development Process,” published by California Continuing Education of the Bar, Berkeley, California.  He is a frequent lecturer for the University of California Extension and Continuing Education of the Bar (CEB) and was an adjunct professor for the University of San Francisco Law School teaching Land Use Law.  
Mr. Curtin received his A.B. from the University of San Francisco and his J.D. from its School of Law.  He has served as assistant secretary of the California State Senate, Counsel to the Assembly Committee on Local Government, Deputy City Attorney of Richmond, and City Attorney of Walnut Creek. 
I.	
I.	tAHOE‑SIERRA WILL ENCOURAGE USE OF CALIFORNIA’S MORATORIUM LAW
The U.S. Supreme Court’s decision in Tahoe-Sierra Preservation Council Inc. v. Tahoe Regional Planning Agency, 122 S.Ct. 1465 (2002), reaffirmed the ability of local governments to use temporary development moratoria as a planning tool without necessarily having to compensate property owners for the time period during which development is banned.  
In Tahoe-Sierra, the Tahoe Regional Planning Agency imposed two moratoria totaling 32 months on development in the Lake Tahoe basin while formulating a comprehensive land use plan for the area.  Property owners filed suit in federal court claiming that the moratoria constituted a taking of private property without just compensation.
The U.S. Supreme Court stated that, because property subject to a temporary moratorium will recover its value when the moratorium is lifted, the moratorium did not permanently deprive the owner of all economically viable use.
The high court also noted that an areawide moratorium often provides a reciprocity of advantage to affected landowners because they each benefit from protection against hasty construction by their neighbors that may be inconsistent with the land use plan that is adopted.
The court noted that, unlike the “extraordinary circumstances” in which the government deprives the owner of all economic use, moratoria are used widely among land use planners to preserve the status quo while formulating a more permanent development strategy. The court went on to say that, in fact, the consensus in the planning community appears to be that moratoria or “interim development controls” are an essential tool of successful development.
Based on this reasoning, the U.S. Supreme Court held that the temporary moratoria did not constitute a categorical taking; instead, the court applied the case-by-case balancing test of Penn Central Transportation Co. v. City of New York, 438 U.S. 104 (1978), to the landowners’ claims.
The landowners had asked the Supreme Court to set a bright‑line rule that any moratorium of longer than one year was a categorical taking.  The court refused to do so, stating that formulation of a general rule of this kind was more suitable for the state legislatures.
The court noted that many states (including California) had enacted legislation authorizing interim ordinances, including moratoria, with specific time limits.  Footnote 37 of this opinion lists them as follows:  
Several states already have statutes authorizing interim zoning ordinances with specific time limits.  See Cal. Govt. Code Ann. 65858 (West Supp. 2002) (authorizing interim ordinance of up to two years); Colo. Rev. Stat. 3028121 (2001) (six months); Ky. Rev. Stat. Ann. 100.201 (2001) (one year); Mich. Comp. Laws Ann. 125.215 (2001) (three years); Minn. Stat. 394.34 (2000) (two years); N.H. Rev. Stat. 674:23 (2001) (one year); Ore. Rev. Stat. Ann. 197.520 (1997) (10 months); S.D. Codified Laws 11210 (2001) (two years); Utah Code Ann. 1727404 (1995) (18 months); Wash. Rev. Code 35.63.200 (2001); Wis. Stat. 62.23(7)(d) (2001) (two years).  Other states, although without specific statutory authority, have recognized that reasonable interim zoning ordinances may be enacted.  See, e.g., S.E.W. Freil v. Triangle Oil Co., 76 Md. App. 96, 543 A. 2nd 863 (1988); New Jersey Shore Builders Assn. v. Dover Twp. Comm., 191 N.J. Super. 627, 468 A. 2nd 742 (1983); SCA Chemical Waste Servs., Inc. v. Konigsberg, 636 S.W. 2nd 430 (Tenn. 1982); Stugess v. Chilmark, 380 Mass. 246, 402 N.E. 2nd 1346 (1980); Lebanon v. Woods, 153 Conn. 182, 215 A. 2nd 112 (1965).
II.	THE USE OF GOVERNMENT CODE SECTION 65858
This decision highlights the importance and use of interim urgency ordinances that California cities and counties have used for years to put developments on hold while they plan.  Now this decision gives them some definite assurance that, if they use the procedures of section 65858 correctly, a taking claim probably will not be successful.  No doubt the use of section 65858 will expand after Tahoe-Sierra.
There are times when a property owner will submit a land use proposal or request a building permit for use of property that may be in conflict with a contemplated general plan, specific plan, or zoning proposal that the city is considering, studying, or intending to study within a reasonable period of time. In these types of situations, Government Code section 65858 authorizes a city to adopt, as an urgency measure, an interim ordinance prohibiting such uses that may be in conflict with a general plan, specific plan, or zoning proposal that the city is considering, without following the procedures otherwise required for the adoption of a zoning ordinance.  However, such an urgency measure requires a four-fifths vote of the city for adoption.  No notice or hearing is required for the first adoption.  See Beck Dev. Co. v. Southern Pac. Transp. Co., 44 Cal. App. 4th 1160 (1996).
Interim urgency ordinances have statutory time limitations.  If an interim ordinance is initially adopted without notice and hearing, it is effective for only 45 days from the date of adoption.  However, after notice and hearing, the city council or board of supervisors may extend such interim ordinance for 10 months and 15 days and subsequently extend the interim ordinance for an additional one year.  However, like the ordinance itself, extensions require a four-fifths vote for adoption.  Additionally, not more than two extensions may be adopted.  Alternatively, an interim ordinance may be adopted initially by a four-fifths vote following notice and hearing, in which case it is effective for 45 days and can be extended, after notice and hearing, by a four-fifths vote for 22 months and 15 days.  Gov’t Code § 65858(b).  Under either approach, interim “urgency” ordinances are limited by statute to a two-year period.
Before adopting or extending an interim ordinance, the city council or board of supervisors must make a finding that there is a current and immediate threat to the public health, safety, or welfare, or that the approval of additional subdivisions, use permits, variances, building permits, or the like would result in such a threat.  The proper findings must be contained in the ordinance. See 216 Sutter Bay Assocs. v. County of Sutter, 58 Cal. App. 4th 860, 868 (1997) (upholding interim ordinance that recited facts that “may reasonably be held to constitute” an urgency).  Ten days prior to the expiration of the ordinance, the city council or board of supervisors must issue a written report describing the measures taken to alleviate the condition that led to the adoption of the ordinance.  Gov’t Code § 65858(d).
Extensions beyond 45 days of an interim ordinance that have the effect of denying approvals needed for the development of projects with a “significant component” (at least one‑third of the total project square footage) of multi-family housing, are prohibited unless specific findings are made and supported by substantial evidence.  Those findings include a conclusion that continued approval of multi-family housing projects would have a specific, adverse impact on public health or safety, that the interim ordinance is necessary to avoid that impact, and that there is no feasible alternative to satisfactorily avoid or mitigate such impact.  The ban on extensions does not, however, apply to demolition, conversion, redevelopment, or rehabilitation of lower income multi-family housing.  Gov’t Code §§ 65858(e), (g), (h).
Since the purpose of an interim ordinance is to preserve the status quo by prohibiting a use of land that may be inconsistent with a contemplated general plan, specific plan, or zoning proposal currently under consideration, an interim ordinance cannot be used to authorize construction.  This authorization can only be accomplished after notice and hearing under the State Zoning Law.  See Silvera v. City of S. Lake Tahoe, 3 Cal. App. 3rd 554, 558 (1970).  Nor can an interim ordinance be used to halt a use already in existence.  See Kieffer v. Spencer, 153 Cal. App. 3rd 54, 963 (1984).  However, a court has held that an interim ordinance may be used to cancel a development agreement prior to the expiration of the 30-day period between approval of the agreement and its effective date.  See 216 Sutter Bay Assocs. v. County of Sutter, 58 Cal. App. 4th at 870–71.
Although Government Code section 65858 provides that an interim ordinance can be used to prohibit uses of property, it cannot be used to prohibit the processing of a development application.  See Building Indus. Legal Defense Found. v. Superior Court, 72 Cal. App. 4th 1410, 1420 (1999) (the City of San Juan Capistrano’s interim ordinance was invalid to the extent that it applied to processing a development application).  
Government Code section 65858 preempts the entire field of interim zoning moratoria.  See Bank of the Orient v. Town of Tiburon, 220 Cal. App. 3rd 992, 1004 (1990) (the people, via an initiative, could not add an additional year to the two-year moratorium the town council had earlier imposed).
Under Government Code section 65858, a city or county may impose a moratorium for a maximum of two years.  However, upon termination of a prior interim ordinance, the city council or board of supervisors may adopt another interim ordinance if the new interim ordinance arises from an event, occurrence, or set of circumstances different from that which led to the adoption of the prior interim ordinance.  Gov’t Code § 65858(f). 
Although Tahoe-Sierra reaffirmed a city’s or county’s ability to impose a temporary moratorium through such planning tools as Government Code section 65858, a slight risk remains that a moratorium that constitutes an improper land use regulation may effect a temporary taking, and that money damages for such taking might have to be paid.  See First English Evangelical Lutheran Church v. County of Los Angeles, 482 U.S. 304, 321 (1987).  See also Tahoe-Sierra Preservation Council Inc. v. Tahoe Reg’l Planning Agency, 122 S. Ct. 1465, 1482 (2002) (reaffirming the holding in First English).  
Tahoe-Sierra makes clear that unless the regulation eliminates all economically beneficial uses of the land, the more flexible ad hoc analysis enunciated in Penn Central applies.  122 S. Ct. at 1481.  Therefore, it is good practice to allow some use of the property while the interim period is in effect and to insert a “safety valve” provision to allow the owner to apply for an exception.

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