By Katherine J. Hart
For those of us who assist jurisdictions with their land use planning, general plan updates often raise enormous policy issues which undoubtedly turn to legal issues – some of which have never been addressed by the courts. The controversy surrounding the conversion of agricultural land – especially in rural counties – has been brewing for some time now. And, as most know, there have been no cases addressing whether Section 815.3(b) of the Civil Code applies to agricultural conservation easements mandated by a city or county’s general plan policies . . . until now.
In the much anticipated opinion of Building Industry Association of Central California v. County of Stanislaus, et al. (November 29, 2010, F058826) by the California Court of Appeal, Fifth Appellate District, the Court reversed the trial court’s ruling to invalidate the Farmland Mitigation Program (“FMP”) adopted as an update to the County of Stanislaus’ (“County”) agricultural element of the County’s general plan. Specifically, the Court held that the FMP bears a reasonable relationship to the impacts caused by residential development on agricultural land, and that the FMP is not invalid under Civil Code section 815.3(b).
The genesis of this case was the County Board of Supervisor’s (“Board”) adoption of an update to the agricultural element of its general plan in December 2007, which included specific mitigation requirements for the conversion of agricultural land to residential development via the FMP. The new FMP requires the County to condition discretionary projects converting agricultural land to residential development with the requirement that the agricultural land be replaced at a one to one ratio with agricultural land of equal quality located within the County. FMP Guidelines were also considered and adopted. The FMP Guidelines specify that for a project of 20 acres or more, farmland mitigation must be satisfied by direct acquisition of a permanent agricultural conservation easement, but for a project of less than 20 acres, the County can authorize the payment of an in-lieu mitigation fee.
The BIA filed objections to the FMP at the planning commission and Board hearings on the grounds that 1) the County failed to identify its legal authority for mandating the dedication of permanent conservation easements pursuant to its general plan, 2) there is no reasonable relationship between the requirements of the FMP and the adverse public impacts resulting from agricultural conversion (police power argument), and 3) conservation easements must be voluntary and thus, cannot be required by policies like the FMP.
With respect to the police power argument, the Court held that the BIA had the burden at trial of demonstrating the invalidity of the FMP (not the County’s burden to prove the FMP valid), which it did not sufficiently do. Additionally, the Court held that the FMP requirements clearly bear a reasonable relationship to the loss of farmland to residential development citing to the goals and policies in the County’s agricultural element. Notably, the Court said, “to meet the reasonable relationship standard it is not necessary to fully offset the loss.” Reasoning that land use regulation is a function of local government pursuant to the police power, the Court also held that, “the trial court  erred in concluding that the FMP was not authorized by the County’s police power.”
Finally, and most importantly, the Court held that Civil Code section 815.3(b), which prohibits a local agency from conditioning the issuance of a land use entitlement on the applicant’s granting of a conservation easement applied to the FMP, in no way invalidates (via conflict preemption) the FMP. In considering this issue of first impression, the Court sided with the County reasoning that the FMP does not violate the statute’s prohibition against conditioning the issuance of an approval on the grant of a conservation easement because the applicant and/or developer is not required to grant the easement. “Rather, the FMP allows the applicant to arrange for a third party to voluntarily convey an easement to a land trust or the County.” It appears the Court was actually saying something even more succinct: that a developer may choose to develop or not, and if the developer chooses to develop – that is a voluntary choice that comes with a price (e.g., the permanent protection of one acre of farmland for every acre of farmland developed).
This case should not, in this author’s opinion, be read to require rural cities and counties conducting general plan updates to include mandatory mitigation for the conversion of agricultural land. Whether cities and counties choose to obligate landowners and developers to mitigate for farmland conversions is a policy determination which must be given great thought and supported by evidence in the record. Instead, this case provides long-awaited protection for cities and counties that affirmatively choose to employ a farmland mitigation policy.
Furthermore, this case should not be read to conflict with another very recent case out of the Fourth Appellate District – Cherry Valley Pass Acres and Neighbors v. City of Beaumont (Nov. 22, 2010, No. E049651) ____ Cal.App.4th ____. In that case, a CEQA challenge was filed against a specific plan approved by the City of Beaumont (“City”). The land in question was being converted from agricultural to residential. The City’s environmental impact report (“EIR”) recognized the long-term trend in agricultural land conversion and concluded that mitigation was not feasible. The Appellate Court upheld the City’s decision on the grounds it was supported by substantial evidence in the record – mainly that historic and expected trends would eventually result in decreased agricultural land if for no other reason than the farmers selling their land for urban development.
For an interesting chronicle of the evolution of a rural Pennsylvania farm field to a housing tract called New Daleville, I recommend The Last Harvest by Witold Rybczynski. NPR's coverage of New Daleville can be found at http://www.npr.org/templates/story/story.php?storyId=93842128.
Petition for review was denied February 16, 2011, as was the request for de-publication.
Katherine J. Hart is a senior associate at Abbott & Kindermann, LLP. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, LLP at (916) 456-9595.
The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, LLP, nor the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.