AIDS Healthcare Foundation v. City of L.A.

Filed 5/2/22
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION ONE
AIDS HEALTHCARE FOUNDATION B309892
et al.,
(Los Angeles County
Plaintiffs and Appellants, Super. Ct. No. 19STCP03103)
v.
CITY OF LOS ANGELES,
Defendant and Respondent;
6400 SUNSET, LLC,
Real Party in Interest and
Respondent.
APPEAL from an order of the Superior Court of Los Angeles
County, Richard L. Fruin, Jr., Judge. Affirmed.
Chatten-Brown, Carstens & Minteer, Douglas P. Carstens,
Michelle Black and Sunjana Supekar for Plaintiffs and Appellants
AIDS Healthcare Foundation and Coalition to Preserve LA.
Best Best & Krieger, Christi Hogin and Patrick T. Donegan;
Los Angles City Attorney, Steven N. Blau, Kathryn Phelan and
Jennifer Tobkin for Defendant and Respondent City of Los Angeles.
Glaser Weil Fink Howard Avchen & Shapiro, Patricia L.
Glaser, Joel N. Klevens and Alexander J. Suarez for Real Party in
Interest and Respondent 6400 Sunset, LLC.
In 1986, the former Community Redevelopment Agency
of the City of Los Angeles (CRA-LA) established the Hollywood
Redevelopment Plan in accordance with the Community
Redevelopment Law. (Health & Saf. Code, 1 § 33000 et seq.)
The Community Redevelopment Law includes certain housing
affordability provisions, including what the parties refer to as
the 15 percent requirement. Under this provision, “[p]rior to the
time limit on the effectiveness of the redevelopment plan . . . at
least 15 percent of all new and substantially rehabilitated dwelling
units developed within a project area under the jurisdiction of
an agency by public or private entities or persons other than the
agency shall be available at affordable housing cost to, and occupied
by, persons and families of low or moderate income.” (§ 33413,
subd. (b)(2)(A)(i).) This requirement applies “in the aggregate,”
“not to each individual case of rehabilitation, development, or
construction of dwelling units.” (Id., subd. (b)(3).)
In 2011, the Legislature enacted what is known as
the Dissolution Law (§§ 34170−34191.6), which dissolved
redevelopment agencies (§ 34172, subd. (a)(1)) and rendered
inoperative any provisions of the Community Redevelopment
Law that depended upon the “tax increment” method of financing
redevelopment agency activities (§ 34189, subd. (a)).
AIDS Healthcare Foundation and Coalition to Preserve
LA (CPLA) (collectively, appellants) filed a petition for writ of
mandate in the superior court challenging the approval by the
City of Los Angeles (the City) of a real estate development project
(the project) proposed in an area covered by the Hollywood
Redevelopment Plan. Appellants argued that the City’s approval
1Subsequent unspecified statutory references are to the
Health and Safety Code.
2
of the project violated the 15 percent requirement because it did not
commit 15 percent of the residential units for affordable housing.
The court denied the petition and entered judgment for the City and
the real party in interest, 6400 Sunset, LLC (the real party).
We agree with the City and the real party that the
Dissolution Law rendered the 15 percent requirement inoperative
and, even if it had remained operative, it does not apply to the real
party’s “individual case of . . . development.” (§ 33413, subd. (b)(3).)
We therefore affirm the judgment.
FACTUAL AND PROCEDURAL SUMMARY
The real party proposed to construct a 26-story mixed-use
building on 0.89 acres within the area covered by the Hollywood
Redevelopment Plan. The project would provide up to 200 dwelling
units and approximately 7,000 square feet of commercial space
on the ground floor. Five percent of the dwelling units would be
reserved for “very low income households,” as defined in state
regulations. (See Cal. Code Regs., tit. 25, § 6926, subd. (a).)
In January 2019, the City’s Advisory Agency approved a
tentative tract map for the project. CPLA appealed that decision
to the City Planning Commission, and argued that the Community
Redevelopment Law and the Hollywood Redevelopment Plan
required that the real party make 15 percent of the dwelling units
available for very low income households. The City Planning
Commission denied the appeal in March 2019. CPLA appealed the
City Planning Commission’s decision to the City Council’s Planning
and Land Use Management Committee, which denied the appeal in
June 2019.
In July 2019, appellants filed a petition for writ of mandate in
the superior court seeking, among other relief, a writ commanding
the City to set aside and vacate its approval of the project. As is
3
relevant here, appellants alleged that the project failed to comply
with the 15 percent requirement. The court denied the petition
on the grounds that the pertinent provisions of the Community
Redevelopment Law had been “repealed and the redevelopment
agencies themselves dissolved in 2012”; and, even under the
Community Redevelopment Law, the 15 percent requirement
“need not be imposed on each individual project.” The court
thereafter entered judgment for the City and the real party.
DISCUSSION
A. The Community Redevelopment Law and the
15 Percent Requirement
Under the Community Redevelopment Law, prior to
the enactment of the Dissolution Law, local governments
were permitted to establish redevelopment agencies “to ‘prepare
and carry out plans for the improvement, rehabilitation, and
redevelopment of blighted areas.’ (§ 33131, subd. (a).)” (California
Redevelopment Assn. v. Matosantos (2011) 53 Cal.4th 231, 246
(Matosantos).) The former redevelopment agencies did not have
the power to tax; instead, they financed their activities through
“tax increment financing.” (Ibid.; see Cal. Const., art. XVI, § 16;
§ 33670, subds. (a) & (b).) Under tax increment financing, public
entities that were entitled to receive property tax revenue derived
from property within a redevelopment project area, such as cities
and school districts, received property tax revenue based on the
assessed value of the property prior to the effective date of the
redevelopment plan. The tax revenue received in excess of that
amount was a “tax increment” (Matosantos, supra, 53 Cal.4th
at p. 246) “awarded to the [former] redevelopment agency on the
theory that the increase [was] the result of redevelopment” (id. at
p. 247).
4
The Community Redevelopment Law specifies the powers
that former redevelopment agencies had. They include, generally,
the power to: borrow money and issue bonds (§§ 33601, 33640,
33761); execute contracts, deeds of trusts, and other instruments
(§§ 33125, subd. (c), 33601); purchase, lease, or otherwise acquire
(including by eminent domain) interests in property (§§ 33391,
33334.2, subd. (e)(1) & (6)); construct buildings and improve
real property with onsite or offsite improvements (§§ 33334.2,
subd. (e)(2) & (5), 33421); provide financing for residential and
commercial construction (§§ 33743, 33760, subd. (a), 33791,
subd. (a)); clear or move improvements from real property (§ 33420);
rent, manage, operate, and repair property (§ 33400, subd. (b)),
provide subsidies to families of low or moderate incomes (§ 33334.2,
subd. (e)(8)), and sell, lease, donate, or otherwise dispose of property
(§§ 33430, 33334.2, subd. (e)(3)). (See Matosantos, supra, 53 Cal.4th
at p. 246.)
The Community Redevelopment Law provides for certain
housing affordability requirements, including the 15 percent
requirement. (§ 33413, subds. (a) & (b).) As noted above, this
requirement provides: “Prior to the time limit on the effectiveness
of the redevelopment plan . . . at least 15 percent of all new and
substantially rehabilitated dwelling units developed within a
project area under the jurisdiction of an agency by public or private
entities or persons other than the agency shall be available at
affordable housing cost to, and occupied by, persons and families
of low or moderate income.” (Id., subd. (b)(2)(A)(i).) 2
2 The time limit for the effectiveness of redevelopment plans
that were adopted prior to 1994 “shall not exceed 40 years from the
adoption of the redevelopment plan or January 1, 2009, whichever
is later.” (§ 33333.6, subd. (a).) The Hollywood Redevelopment
Plan was adopted in 1986.
5
Former redevelopment agencies could fulfill the 15 percent
requirement by: (1) causing “to be available . . . two units outside a
project area for each unit that otherwise would have been required
to be available inside a project area” (§ 33413, subd. (b)(2)(A)(ii));
(2) aggregating “new or substantially rehabilitated dwelling
units in one or more project areas, if the agency finds, based on
substantial evidence, after a public hearing, that the aggregation
will not cause or exacerbate racial, ethnic, or economic segregation”
(id., subd. (b)(2)(A)(v)); and (3) purchasing or otherwise acquiring
“long-term affordability covenants on multifamily units that restrict
the cost of renting or purchasing those units” (id., subd. (b)(2)(B)).
B. The Hollywood Redevelopment Plan
In May 1986, the CRA-LA established the Hollywood
Redevelopment Plan to pursue redevelopment in the Hollywood
area that “will attain the purposes of the California Community
Redevelopment Law.” (See Blue v. City of Los Angeles (2006)
137 Cal.App.4th 1131, 1134.) Among the goals of the plan are
to “increase the supply and improve the quality of housing for
all income and age groups, especially for persons with low and
moderate incomes.”
The Hollywood Redevelopment Plan includes a provision
that mirrors the 15 percent requirement 3 and includes the proviso
that the requirement “shall apply in the aggregate to housing in the
[Hollywood Redevelopment] Project Area and not to each individual
3 The pertinent provision in the Hollywood Redevelopment
Plan states: “At least fifteen percent (15%) of all new or
rehabilitated units developed within the [p]roject [a]rea by public
or private entities or persons . . . shall be for persons and families
of low or moderate income.”
6
case of rehabilitation, development or construction of dwelling
units.”
C. The Dissolution Law
The system of tax increment financing for redevelopment
agencies became “a source of contention because of the financial
advantage it provide[d] redevelopment agencies and their
community sponsors, primarily cities, over school districts and
other local taxing agencies,” and its effect “on school districts’
property tax revenues . . . [became] a point of fiscal conflict between
California’s community redevelopment agencies and the state
itself.” (Matosantos, supra, 53 Cal.4th at p. 248.) By 2011, the
“diversion” of “property tax revenue to redevelopment agencies
each year . . . made it increasingly difficult for the state to meet
its funding obligations to the schools.” (Stats. 2011, 1st Ex. Sess.
2011−2012, ch. 6, § 1(b), p. 5865.) The Legislature therefore
enacted the Dissolution Law. (See, e.g., Cuenca v. Cohen (2017) 8
Cal.App.5th 200, 208 (Cuenca); County of San Bernardino v. Cohen
(2015) 242 Cal.App.4th 803, 815; see Stats. 2011, 1st Ex. Sess.
2011−2012, ch. 5, § 7, pp. 5848−5862 [enacting part 1.85 of the
Health and Safety Code].)
The Dissolution Law “eliminated the tax increment” (Cuenca,
supra, 8 Cal.App.5th at p. 211) and declared “inoperative” “all
provisions of the Community Redevelopment Law that depend on
the allocation of tax increment to redevelopment agencies” (§ 34189,
subd. (a); see Covarrubias v. Cohen (2016) 3 Cal.App.5th 1229, 1237
[under section 34189, “any provision depending on allocation of tax
increment is inoperative”]).
The Dissolution Law also dissolves all redevelopment
agencies (§ 34172, subd. (a)(1)), generally bars the creation of
new redevelopment agencies (id., subd. (a)(2)), and withdraws the
7
authority of former redevelopment agencies “to transact business
or exercise powers previously granted under the Community
Redevelopment Law” (id., subd. (b)).
The Dissolution Law provides for the creation of “successor
agencies” to the former redevelopment agencies (§ 34173, subd. (a))
and “housing successor[s]” (§ 34176, subd. (a)(3)), which acquired
the former redevelopment agency’s “housing functions and assets”
(§ 34177, subd. (g)). The successor agencies, however, have no
“legal authority to participate in redevelopment activities, except to
complete any work related to an approved enforceable obligation.”
(§ 34173, subd. (g).)
The Dissolution Law places tax increment funds previously
allocated to former redevelopment agencies in a trust fund
administered by the county auditor-controller to pay the principal
and interest on loans and other indebtedness incurred by the
former agencies. (§§ 34170.5, subd. (b), 34172, subd. (c).) Any
“unencumbered balances of redevelopment agency funds” are
required to be distributed “to the taxing entities,” such as cities,
counties, and school districts. (§ 34177, subd. (d).)
Prospectively, revenue from property taxes that would
have been allocated to redevelopment agencies under the
Community Redevelopment Law are, under the Dissolution Law,
used to make payments on the former redevelopment agency’s
debts and other obligations, and to pay for certain administrative
costs. (§§ 34172, subd. (d), 34183, subd. (a)(1)−(3).) Any excess
amounts are distributed to taxing entities. (§§ 34172, subd. (d),
34183, subd. (a)(4); see City of Chula Vista v. Drager (2020) 49
Cal.App.5th 539, 560−563.)
8
D. Analysis
The City and the real party contend that the Dissolution
Law renders the 15 percent requirement inoperative because
complying with that requirement depends upon the allocation
of tax increment to redevelopment agencies. We agree.
Under the Dissolution Law, “all provisions of the Community
Redevelopment Law that depend on the allocation of tax increment
to redevelopment agencies . . . shall be inoperative.” (§ 34189,
subd. (a).) Determining whether the 15 percent requirement
depends upon the allocation of tax increment requires the
interpretation of the Community Redevelopment Law and the
Dissolution Law. We review these issues de novo. (See City of
Petaluma v. Cohen (2015) 238 Cal.App.4th 1430, 1438−1439;
County of Sonoma v. Cohen (2015) 235 Cal.App.4th 42, 47.)
In interpretating statutes “we must interpret [particular
provisions] in context with the entire statute and the statutory
scheme.” (In re Jennings (2004) 34 Cal.4th 254, 263.) Here, the
15 percent requirement is among the affordable housing obligations
within the Community Redevelopment Law and must be viewed in
the context of that law. (Cf. City of Grass Valley v. Cohen (2017)
17 Cal.App.5th 567, 585 [particular provisions of the Dissolution
Law “must be harmonized with the rest of the dissolution statutes,
if possible”].)
The Community Redevelopment Law provided former
redevelopment agencies with various statutory tools to satisfy
the 15 percent requirement and the financial means—specifically,
the allocation to the former agencies of tax increment—necessary
to implement these tools. Agencies could, for example, fulfill the
15 percent requirement by purchasing apartment buildings and
leasing units to low and moderate income families (§§ 33391,
33334.2, subd. (e)(1), 33430), constructing or rehabilitating low and
9
moderate income housing units (§ 33334.2, subd. (e)(5) & (7)),
providing subsidies to low and moderate income families
for housing (id., subd. (e)(8)), purchasing and donating land
to organizations that would build affordable housing (id.,
subd. (e)(1) & (3)), or purchasing long-term affordability covenants
on multifamily units (§ 33413, subd. (b)(2)(B)). These and other
tools available to former redevelopment agencies to meet the
affordable housing obligations required money. Redevelopment
agencies, however, could not levy taxes to pay for these tools;
the agencies were dependent upon the funds supplied by the tax
increment. 4 (Matosantos, supra, 53 Cal.4th at p. 246.) Appellants
do not identify any another source of funds in their appellate briefs.
During oral argument, counsel for appellants asserted for
the first time that former redevelopment agencies could raise funds
to finance the costs of fulfilling the 15 percent requirement by
issuing bonds. (See § 33640.) Bonds, however, have to be repaid,
and the former agencies repaid the bonds, generally, from the
same source of funds used to pay other obligations—from the tax
increment. (See Matosantos, supra, 53 Cal.4th at p. 247; § 33670,
subd. (b) [tax increment funds are “paid into a special fund of
4 Although former redevelopment agencies could receive
funds derived from their redevelopment activities, such as rent
payments from tenants and proceeds from the sale of property,
such post-Dissolution Law sources of revenue reflect “significantly
reduced resources and income that may be sporadic and somewhat
unpredictable.” (Assem. Com. on Appropriations, Analysis of Sen.
Bill. No. 341 (2013−2014 Reg. Sess.) as amended May 30, 2013,
pp. 1−2.) Former redevelopment agencies could not reasonably
depend upon such insignificant and undependable sources of
revenue to meet the 15 percent requirement; the availability of
tax increment funds was therefore essential to implementing the
15 percent requirement.
10
the redevelopment agency to pay the principal of and interest on
loans, moneys advanced to, or indebtedness . . . incurred by the
redevelopment agency to finance or refinance, in whole or in part,
the redevelopment project”]; Community Redevelopment Agency v.
Bloodgood (1986) 182 Cal.App.3d 342, 344 [a former redevelopment
agency’s “major source of funds to repay its debts” is the tax
increment].) The issuance of bonds, therefore, was an integral
part of tax increment financing and dependent upon it, not an
alternative to it.
Thus, the only means available to the former redevelopment
agencies for fulfilling the 15 percent requirement were the tools
specified in the Community Redevelopment Law, which were
funded primarily with tax increment. Complying with the
15 percent requirement was therefore dependent upon the funds
supplied by tax increment. Because the Dissolution Law rendered
all provisions that depended upon tax increment inoperative, the
Dissolution Law rendered the 15 percent requirement inoperative.
Appellants do not refer us to any provision in the Dissolution
Law that reasonably suggests that the Legislature intended the
15 percent requirement to survive after it dissolved redevelopment
agencies and eliminated tax increment financing. Indeed,
rather than directing successor agencies to fulfill the former
redevelopment agencies’ affordable housing requirements, which,
under the Community Redevelopment Law, could have occurred
over several decades (§ 33333.6, subd. (a)), the Legislature directed
successor agencies to “[e]xpeditiously wind down the affairs of
the redevelopment agency” (§ 34177, subd. (h)), generally barred
them from “participat[ing] in redevelopment activities” (§ 34173,
subd. (g)), and required them to remit to the county auditor-
controller for distribution to the taxing entities the “unencumbered
balances of redevelopment agency funds” that might otherwise have
11
been available to fulfill the affordable housing requirements
(§ 34177, subd. (d).) Housing successors have access, generally,
only to the funds derived from housing assets 5 and must spend
them fulfilling specific tasks, which do not include complying
with the 15 percent requirement. (§ 34176.1, subd. (a)(1)−(3).)
Appellants note that, under the Dissolution Law, successor
agencies must perform the former redevelopment agencies’
“enforceable obligations” (§ 34177, subds. (a) & (c)), and contend
that the 15 percent requirement is such an obligation. We disagree.
Although the statutory definition of “enforceable obligations”
(§ 34171, subd. (d)(1)(C)) includes “obligations imposed by state
law” (§ 34167, subd. (d)(3)), the Dissolution Law consistently refers
to enforceable obligations in terms of monetary and existing
contractual obligations, and does not contemplate that the phrase
includes the statutory housing affordability requirements. Under
section 34169, for example, after the enactment of the Dissolution
Law, but before the creation of successor agencies, redevelopment
agencies were required to “adopt an Enforceable Obligation
Payment Schedule [(EOPS)] that lists all of the obligations that
are enforceable” (§ 34169, subd. (g)(1)), and which identifies the
5 Housing assets include: interests in real property and
restrictions on the use of real property that were acquired for
low and moderate income housing purposes; funds encumbered
by an enforceable obligation to build or acquire low and moderate
income housing; loans or grants funded from the Low and Moderate
Income Housing Fund; funds derived from rents or operation of
property acquired for low and moderate income housing purposes;
rents or other payment from tenants or operates of low and
moderate income housing; and repayments of loans owed to the Low
and Moderate Income Housing Fund. (§ 34176, subd. (e)(1)−(6).)
12
“payee” and the “amount of payments obligated to be made” (id.,
subd. (g)(1)(B) & (D)).
After the successor agency is created, the successor agency
must use the redevelopment agency’s last EOPS to prepare a
Recognized Obligation Payment Schedule (ROPS). (§ 34177,
subd. (a)(1).) The ROPS must identify “the enforceable obligations
of the former redevelopment agency” (id., subd. (l)(1)(A)) and
“project the dates and amounts of scheduled payments for each
enforceable obligation for the remainder of the time period during
which the redevelopment agency would have been authorized to
obligate property tax increment had the redevelopment agency
not been dissolved.” (Id., subd. (l)(2)(A).) The Department of
Finance shall thereafter make a “determination of the enforceable
obligations and the amounts and funding sources of the enforceable
obligations.” (Id., subds. (m)(1) & (o)(1).)
The successor agency may also submit a “Last and Final”
ROPS, which “shall list the remaining enforceable obligations of
the successor agency in the following order: [¶] (A) Enforceable
obligations to be funded from the Redevelopment Property Tax
Trust Fund[; ¶] (B) Enforceable obligations to be funded from
bond proceeds or enforceable obligations required to be funded
from other legally or contractually dedicated or restricted funding
sources[; and ¶] (C) Loans or deferrals authorized for repayment”
pursuant to specified statutes. (§ 34191.6, subd. (b)(1).)
The references in these provisions to the “payee” (§ 34169,
subd. (g)(1)(B)), the “amount of payments obligated” (id.,
subd. (g)(1)(D)), the “amounts of scheduled payments” (§ 34177,
subd. (l)(2)(A)), the “amounts . . . of the enforceable obligations” (id.,
subds. (m)(1) & (o)(1)), and the particular sources of funds to satisfy
the enforceable obligations strongly supports that enforceable
obligations of a former redevelopment agency are obligations that
13
can be fulfilled by the payment of money obtained from specified
sources, not by attaining a certain percentage of affordable housing
units. This interpretation is strengthened by other provisions of the
Dissolution Law, which consistently refer to enforceable obligations
in terms of monetary and existing contractual obligations. (See
§ 34171, subd. (d)(1)(C) [enforceable obligations include “legally
enforceable payments required in connection with the agencies’
employees, including, but not limited to, pension payments,
pension obligation debt service, unemployment payments, or other
obligations conferred through a collective bargaining agreement”];
§ 34172, subd. (a)(2) [community may create new agency if “the
successor entity has paid off all of the former agency’s enforceable
obligations”]; § 34173, subd. (h)(1) [a city may loan funds to
successor agency “to pay approved enforceable obligations”];
§ 34174, subd. (a) [Dissolution Law shall not be construed as
causing “an event of default under any of the documents governing
the enforceable obligations”]; § 34177, subd. (a) [successor
agencies shall “[c]ontinue to make payments due for enforceable
obligations”]; § 34177.3, subd. (b) [“successor agencies may create
enforceable obligations to conduct the work of winding down the
redevelopment agency, including hiring staff, acquiring necessary
professional administrative services and legal counsel, and
procuring insurance”]; § 34179.5, subd. (b)(2) [enforceable
obligations including “contracts detailing specific work to be
performed” and “indebtedness obligations”]; id., subd. (c)(5)(D)
[successor agency’s list of all approved enforceable obligations shall
include “a projection of annual spending requirements to satisfy
each obligation”]; § 34182, subd. (c)(2) [county auditor-controller
shall administer the redevelopment property tax trust fund “for the
benefit of the holders of former redevelopment agency enforceable
obligations and the taxing entities”]); § 34187, subds. (b) & (h)
14
[successor agency may be dissolved when all of “the enforceable
obligations have been retired or paid off ”]; § 34191.4, subd. (c)(1)(A)
[“[e]nforceable obligations may be satisfied by the creation of
reserves for projects that are the subject of the enforceable
obligation and that are consistent with the contractual obligations
for those projects”]; see also Cuenca, supra, 8 Cal.App.5th at p. 225
[although former redevelopment agency had previously set aside
funds to be used for low and moderate income housing pursuant
to stipulated judgments, the use of such funds for that purpose
after the Dissolution Law was not an enforceable obligation
because the judgments “d[id] not constitute contracts to construct
any housing”].)
The appellants contend that the City, as the former CRA-LA’s
housing successor, is not limited to the statutory powers previously
available to former redevelopment agencies under the Community
Redevelopment Law. The 15 percent requirement, they argue,
could be met by the exercise of the City’s “inherent police power,
separate from funding mechanisms.” Instead of using tax
increment financing to purchase, construct, or subsidize affordable
housing units, for example, the City could take advantage of its
police powers to impose upon developers, such as the real party
in this case, a requirement that the development project includes
a certain percentage of affordable housing units. They point to
inclusionary housing ordinances adopted by some municipalities
to require or encourage real estate developers to provide housing
units affordable to low and moderate income families. (See, e.g.,
California Building Industry Assn. v. City of San Jose (2015)
61 Cal.4th 435, 457 [upholding San Jose’s inclusionary housing
ordinance as a permissible police power regulation].) We reject this
argument.
15
Even if we assume arguendo that the City is the former
CRA-LA’s housing successor 6, the Dissolution Law did not grant to
the housing successor any powers the former redevelopment agency
did not have (§ 34176, subd. (a)(1)), and former redevelopment
agencies did not have general police powers. A local government’s
police powers are derived from article XI, section 7 of our state
Constitution, which provides that “[a] county or city may make
and enforce within its limits all local, police, sanitary, and other
ordinances and regulations not in conflict with general laws.”
(Cal. Const., art. XI, § 7; see City and County of San Francisco v.
Regents of University of California (2019) 7 Cal.5th 536, 544;
Department of Finance v. Commission on State Mandates (2021)
59 Cal.App.5th 546, 561–562.) This authority is granted to counties
and cities, not former redevelopment agencies, which derived their
existence and authority from the Community Redevelopment Law.
(§§ 33100, 33122; see Matosantos, supra, 53 Cal.4th at p. 256
[“[r]edevelopment agencies are . . . creatures of the Legislature’s
exercise of its statutory power”]; 8 Miller & Starr, Cal. Real Estate
(4th ed. 2021) § 30:4 [scope of former redevelopment agencies’
authority was “defined and limited by the Community
Redevelopment Law”].) Nothing in that law authorized former
redevelopment agencies to invoke the police powers constitutionally
granted to counties and cities. Because general police powers were
not available to redevelopment agencies under the Community
Redevelopment Law and the Dissolution Law granted housing
successors no greater powers, the City could not, as a housing
6It is not clear from our record or the parties’ arguments
whether the City is the CRA-LA’s housing successor. (See § 34176.)
We do not need to decide, and do not decide, this issue.
16
successor, invoke such powers to require a developer to comply
with the 15 percent requirement.
Appellants attempt to avoid the conclusion that the former
redevelopment agencies lacked authority to invoke general police
powers by pointing out that it is now the City—a governmental
entity that can invoke the police power—that has the burden
of complying with the 15 percent requirement. The argument,
however, erroneously assumes that the 15 percent requirement
remained operative after the Dissolution Law went into effect and
that the City is bound by it.
The “provisions of the Community Redevelopment Law
that depend on the allocation of tax increment to redevelopment
agencies” became “inoperative” “on the effective date of [the
Dissolution Law].” (§ 34189, subd. (a).) Up until that time, the
15 percent requirement applied to redevelopment agencies, not
cities or counties, and was thus dependent upon tax increment
financing. The requirement was therefore rendered inoperative
by the Dissolution Law when it went into effect (ibid.), and nothing
in the Dissolution Law suggests that municipalities would
thereafter be bound by the 15 percent requirement. (See Macy v.
City of Fontana (2016) 244 Cal.App.4th 1421, 1432 [nothing in
the Dissolution Law “imposes on municipalities any liability with
respect to a dissolved [redevelopment agency’s] pre-existing low-
and moderate-income housing obligations”].)
Appellants further argue that, even if the 15 percent
requirement in the Community Redevelopment Law is inoperative,
the Hollywood Redevelopment Plan includes a similar 15 percent
requirement, which, they contend, “ ‘appear[s] to remain in full
force and effect.’ ” We disagree. The Hollywood Redevelopment
Plan expressly “provides the Agency”—defined as the CRA-LA,
not the City—“with powers, duties and obligations” set forth in the
17
plan. The CRA-LA, however, was dissolved by the Dissolution Law,
and nothing in the Hollywood Redevelopment Plan imposed any
affordable housing obligations on the City.
Appellants also rely on what they consider “[t]he
straightforward language of the [Community Redevelopment
Law],” which “says that 15 [percent] of the residential units
created in a redevelopment area . . . by an entity other than the
redevelopment agency must be affordable.” “A plain reading of
the statute,” they contend, “dictates that the [real party] can be
required to provide 15 [percent] of its units as affordable housing
in order for the City to comply with the requirements of the
[Community Redevelopment Law].” This argument not only
erroneously assumes that the 15 percent requirement survived the
Dissolution Law, but also ignores the statutory provision that the
15 percent requirement “shall apply, in the aggregate, to housing
in [a redevelopment project area] and not to each individual case of
rehabilitation, development, or construction of dwelling units, unless
an agency determines otherwise.” (§ 33413, subd. (b)(3), italics
added.) The CRA-LA never determined otherwise. Under the
straightforward language of this provision, even if the 15 percent
requirement remained operative, the real party is not required to
fulfill the terms of that requirement with respect to its “individual
case of . . . development.”
Appellants make a similar argument based upon the
substantially identical 15 percent requirement in the Hollywood
Redevelopment Plan. The Hollywood Redevelopment Plan,
however, included the same proviso as the Community
Development Law: The 15 percent requirement “shall apply in
the aggregate to housing in the [Hollywood Redevelopment] Project
Area and not to each individual case of rehabilitation, development
or construction of dwelling units.” Therefore, even if the Hollywood
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Redevelopment Plan had survived the Dissolution Law and the
City is obligated under the plan, the requirement does not apply
to the real party’s “individual case” of development.
DISPOSITION
The judgment is affirmed. The City of Los Angeles and
6400 Sunset, LLC, are awarded their costs on appeal.
CERTIFIED FOR PUBLICATION.
ROTHSCHILD, P. J.
We concur:
BENDIX, J.
CRANDALL, J. *
*Judge of the San Luis Obispo County Superior Court,
assigned by the Chief Justice pursuant to article VI, section 6 of the
California Constitution.
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