By Glen C. Hansen

The City of San Clemente (“City”) imposed an “RVL” or “Residential, Very Low” set of land use restrictions on an undeveloped 2.85-acre parcel in the middle of a residential tract otherwise zoned “Residential, Low Density Zone” (“RL”). The RVL designation limited parcels to one dwelling per 20 acres. The RL designation, by contrast, allowed at least four dwellings per acre. According to the court of appeal, the property looked like “a small RVL spot surrounded by denser land uses” on the City’s general plan map, and was a “one-house-per-20-acre island in a two-to-six house-per-acre sea.” The property owners applied to develop four houses on the property, and the City denied that application. The owners petitioned the superior court for a writ of mandate. There were two phases of trial. In phase one, the trial court concluded that the application of the RVL restrictions in this case constituted spot zoning. It issued a writ of mandate that ordered the City to vacate the resolution denying the owners’ application. In the second phase of the trial on the owners’ request for damages, the trial court found a compensable taking. The trial court then entered a conditional judgment in favor of the owners, giving the City the choice of either (1) complying with the court’s writ of mandate that declared the resolution denying the owners’ application to develop four houses on the property null and void and that ordered the city to adopt a new resolution vacating the resolution denying the owners’ application, or (2) paying $1.3 million in damages for the value of the property taken by the RVL restrictions. The City appealed the conditional judgment.

The Court of Appeal for the Fourth Appellate District affirmed the judgment in so far as the trial court gave the City the choice of either complying with the writ of mandate or paying inverse condemnation damages. The court found that zoning maps in the record provided substantial evidence of spot zoning, the essence of which is “irrational discrimination.” The general plan states that the purpose of RVL zoning is “preserve currently undeveloped canyons which are either geologically unstable, or aesthetic open-space, or biological resources.” RVL zoning, under the terms of the City’s ordinance, is intended to apply to cases of “significant acreage.” But here, the subject parcel constituted 2.85 acres of sloping property; the property did not contain any “sensitive biological resources”; the property was not a canyon; and the ordinance did not say anything about slopes. Thus, the express rationale for the city’s RVL zoning did not apply to the property at issue. The trial court found that the City ignored its own ordinance requiring the City planning department to cooperate with local landowners so as to achieve a balanced accommodation of interests, as the City did not review the specifics of the plaintiffs’ application and did not consider measures to “cure” the impact of grading or retaining walls. “This parcel, in this neighborhood, was being singled out for discriminatory treatment independent of the reason for RVL zoning in the first place.” Therefore, the City’s refusal to lift the imposition of the RVL restriction on this particular parcel was arbitrary, capricious and constituted a taking.

The three core factors of a compensable taking under Penn Central Transp. Co. v. New York City (1978) 438 U.S. 104, readily applied here. First, the economic effect was dramatic ($1.3 million difference between the property valued if four houses could be built compared to value under RVL zoning). Second, the regulation wholly undermined the investment-backed expectations of the owners. Third, the character of the governmental action appears to have been largely motivated to keep the subject parcel open space. Additional Penn Central factors also pointed to a taking, including the subject parcel being singled out for unequal treatment, evidence that the neighbors and City simply wanted to keep the parcel as nearby open space, the lack of any serious consideration by the City of mitigation measures in turning down the application, and the fact that the best use of the land was consistent with the density of the surrounding neighborhood.

However, the court of appeal reversed the part of the trial court’s judgment that placed a value on the property owner’s loss. The court concluded that the trial court erred in failing to account for the property’s value with the one house the RVL zoning did allow. On remand, the trial court must reconsider the fair market value of the property. Avenida San Juan Partnership v. City of San Clemente (December 14, 2011, G043479) ____ Cal.App.4th ___.

Glen C. Hansen is an attorney 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, or 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.