Housing Policy

Emergency COVID-19 Rules Effectively Give California's NIMBYs Unlimited Time To File Anti-Housing Environmental Lawsuits

And they are taking full advantage of the opportunity

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The COVID-19 outbreak might be a disaster for most of the globe, but it's proving to be a windfall for California's NIMBYs who are being provided with new legal tools for delaying real estate developments.

Last week, the Judicial Council of California—the rule-making body for the state's courts—issued 11 emergency rules for the judicial system during the current pandemic.

Included in the council's rules was a blanket extension of deadlines for filing civil actions until 90 days after the current state of emergency ends. Ominously for housing construction, this extended statute of limitations applies to lawsuits filed under the California Environmental Quality Act (CEQA).

That law requires local governments to study proposed developments for potentially significant environmental impacts. CEQA also gives third parties the power to sue local governments for approving a construction project if they feel that a particular environmental impact wasn't studied enough.

The law has become a favored tool of NIMBYs and other self-interested parties to delay unwanted developments or to extract concessions from developers. Anti-gentrification activists use CEQA to stop apartment buildings that might cast too much shadow. Construction unions use the law as leverage to secure exclusive project labor agreements.

Under normal circumstances, these CEQA lawsuits have to be filed within 30 or 35 days of a project receiving final approval. That deadline gives builders, and their lenders, a modicum of certainty about the future timeline of their projects.

By extending this statute of limitations to 90 days after the end of the state's emergency (which is still yet to be determined), the council is effectively giving project opponents an unlimited amount of time to hold up projects, says Jennifer Hernandez, a land-use attorney with the law firm Holland & Knight.

"It's not after the courts re-open, or after the courts re-open with a new and more cautious social distancing protocol," she tells Reason. "When the COVID emergency is no longer an emergency is a much more aspirational goal than trying to figure out what the rules should be for conducting business given the COVID emergency."

This could effectively put any construction project that hasn't already run out the clock on CEQA's statute of limitations on hold, says Nick Cammarota of the California Building Industry Association (CBIA).

"If I'm a builder I can't move forward with my project until the [CEQA] statute of limitations has expired. The reason why I can't do that is because if you do move forward, courts have the authority to order you tear down what you've built," Cammarota tells Reason, explaining that "lenders today are unwilling to fund those loans for construction until the statute of limitations has expired."

That's bad news for a state that is already suffering from a shortage of some 3.5 million homes according to one estimate, and which has given itself the goal of building 500,000 new units a year to make up for the shortfall.

In 2019, permits for 109,000 units were issued in the state, down from 117,000 in 2018, and 113,000 in 2017, according to U.S. Census Bureau data. The indefinite extension of the timeline for filing CEQA lawsuits plus the current shutdown of most construction sites in the Bay Area could mean California is looking at another lost year for new housing construction.

"Without construction, you don't have new housing and we stay in the housing catastrophe that we're in," says Hernandez.

In announcing their emergency provisions last week, the Judicial Council made clear that they were more or less operating on the fly and were open to revisions in their order.

"We are at this point truly with no guidance in history, law, or precedent," said California Chief Justice Tani Cantil-Sakauye, chair of the council, in a press release. "And to say that there is no playbook is a gross understatement of the situation."

Holland & Knight and the CBIA are both asking the Judicial Council to issue separate guidance for CEQA actions that offers a more limited extension of the statute of limitations.

California's local governments are asking much the same thing. On Monday, the California League of Cities, as well as two associations representing county governments, requested the Judicial Council modify its emergency rules to allow the normal CEQA statute of limitations to resume after the lifting of the COVID-19 state of emergency.

"The Governor is calling upon all cities and counties to step up and face these crises by approving more housing units on a very considerable scale," these local government associations say in their letter. The Judicial Council's extension of civil action deadlines means "any applicants who got their approvals after the first week of March 2020 may have to wait until several months from now to get a green light from their lenders."

Other than saying their emergency rules would be open for revision, the Judicial Council hasn't given any indication on when, or even if, they'll modify last week's ruling to carve out some exemption for CEQA.

Not changing anything would be disastrous for new housing construction in the state, says Hernandez, saying "if this remains in place as is we'd expect to see an even more catastrophic slowdown in housing starts."

NEXT: Trump Claims He Has 'Total' Authority Over When States End Social Distancing Rules. He's Wrong.

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  1. Millions will die, so no new housing needed anyway. A win-win, amirite?

    1. “We’re suing because we feel the environmental impact of developing millions of new cemetery plots has not been studied enough.”

      1. Start now earning extra $16,750 to $19,000 per month by doing an easy home based job in part time only. Last month i have got my 3rd paycheck of $17652 by giving this job only 3 hrs a day online on my Mobile.. Every person can now get this today and makes extra cash by follow details her…….More here

    2. California will probably sue the dead for substantially changing the makeup of the neighbor without permission.

    3. Wait till Newsom starts hitting up the next of kin with a bill for the CO2 emissions from the cremation

  2. I’m sorry, but ruining our environment is not essential.

    1. Now if only that were the actual reason these developments get sued

    2. Unless you are advocating moving all humans out of California and restoring the eden of 20,000 BC, piss off.

      Even then, piss off.

      1. Piss on, piss off…The pisser.

    3. You went full retard. Never go full retard.

    4. your shtick is entertaining so far.

  3. Californians so, so deserve themselves, at least along the coast.

    If we could only get them to truly isolate, in perpetuity.

  4. “We are at this point truly with no guidance in history, law, or precedent,”

    Well, in an act of true desperation, you could read the constitution.

    1. There are only a few parts of that which the State of CA doesn’t find “problematic” anymore, and that’s before even getting into their “salad bar” approach to the amendments.

      Limiting the authority and power of government doesn’t sit well with “progressive” ideologues who seem to view State Authority as something that’s the only appropriate solution to any problem and never capable of contributing or exacerbating the “corporations” that must be the cause of whatever it is that’s bothersome.

  5. No worries, the virus is killing the homeless at twice the normal rate, so more houses will not be needed! Those Californians know how to take advantage of a good pandemic!

  6. I hope every developer dies a horrible death by burning, and then that nothing is ever “developed” in CA again. I was so hoping that Covid-19 would kill at least 10% of the population, and now it’s clear it wont even get 1% – even if it is just left to rage. What a letdown.

    1. You could increase that %…by killing yourself.
      Don’t you just love those who say that the world will be better if someone else dies?

  7. Regarding California, I’ve gotten to the point where imho they deserve to have ‘Atlas Shrug’. And in a sense, spookk is right: it is too bad that 10% of Californians likely won’t die from this pandemic. They complain that too many people live there, and they are right.

  8. These NIMBYites were already facing the consequences of their own actions. A lot of service businesses have closed because their owners cannot afford to live in these areas due to the lack of housing. Supply and demand really is the leading factor that affects real estate prices. And when you choke off the supply, well, the prices are astronomical. Oh yeah – these NIMBYites may not have to see an unattractive building, instead they get to see a bunch of old ugly rvs. You eventually reap what you sow.

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