By Frank P. Angel and Cooper Kass.
Published in the Los Angeles Daily Journal on November 30, 2023.
If there’s a lesson to be learned from the recent appellate opinion in Coastal Protection Alliance Inc. v. Airbnb, Inc. (2023) 95 Cal.App.5th 207 (CPA), it is: don’t use the Coastal Act to abuse the Coastal Act. CPA and three earlier appellate opinions (Greenfield v. Mandalay Shores Community Assn. (2018) 21 Cal.App.5th 896 (Greenfield); Kracke v. City of Santa Barbara (2021) 63 Cal.App.5th 1089 (Kracke); Keen v. City of Manhattan Beach (2022) 77 Cal.App.5th 142 (Keen)) all arose out of attempts to ban or limit rentals of single-family homes and apartments for 30 consecutive days or less (short-term rentals or “STRs”) in residentially zoned areas of the California coastal zone.
The California Coastal Act of 1976 contains coastal resources planning and management policies (§ 30200 et seq. [statutory references are to the Public Resources Code]), which local governments in the coastal zone must enforce through local coastal programs (LCPs) and individual coastal development permit (CDP) adjudicatory proceedings. Several of these policies serve to protect and expand public access to the coast (§§ 30210-30214) and coastal recreation (§§ 30220-30224). One such policy mandates: “Lower cost visitor and recreational facilities shall be protected, encouraged, and, where feasible, provided.” (§ 30213.)
In 2017, AB 250 authorized the State Coastal Conservancy, a Coastal Commission sister agency, to facilitate development of lower-cost overnight accommodations within 1.5 miles of the coast. Earlier that year, a Coastal Conservancy-commissioned survey had found that 58% of Californians visiting the coast do not stay overnight, primarily for financial reasons. That figure soared to 65% for Black respondents and 74% for Latino respondents, but dropped to 48% for white respondents. (See Coastal Conservancy, Explore the Coast Overnight, An Assessment of Lower-Cost Coastal Accommodations.) Thus, the Legislature perceived the need to remove a “barrier to coastal access” — the diminishing supply of lower cost coastal accommodations caused by “high coastal property values and economic pressures to develop new coastal accommodations that are too expensive to be affordable to most visitors.” (§ 31411, subd. (d).) However, projects authorized by AB 250 appear to be limited to overnight accommodations on public lands (e.g., parklands) or lands owned or operated by nonprofits. (§ 31413; but see § 31414, subd. (b)(3) [pilot program authorizing Coastal Conservancy to financially assist private entities to provide lower cost accommodations].)
Enter STRs, facilitated by online marketplaces like Airbnb, VRBO, or HomeAway. By granting families the ability to travel together and share a common living space, STRs expand overnight stay opportunities for coastal visitors, a fact noted by the trial judge in Kracke. Before long, however, STRs sparked complaints from locals about increased traffic, parking conflicts, unwanted noise, excessive trash, and crime. Homeowner groups and local governments in the coastal zone started taking matters into their own hands.
In Greenfield, a homeowner association in Ventura county passed a ban on STRs affecting 1,400 single-family dwellings. Enforced by fines, the ban created a “monetary barrier to the beach.” (21 Cal.App.5th at p. 898.) In Kracke, the city of Santa Barbara, despite having previously encouraged coastal STRs — and having collected the transient occupancy taxes from the STR hosts — abruptly decided to change course. In Keen, the city of Manhattan Beach passed and, without obtaining the Coastal Commission’s approval in the form of an amendment to the city’s LCP, enforced ordinances categorically prohibiting STRs in all residential districts of the Manhattan Beach coastal zone. In those cases, STR regulations were found invalid because they banned STRs without securing either a CDP or a Coastal Commission-approved LCP amendment, as required by the Coastal Act. (The Coastal Commission will reject blanket STR bans, but it has approved reasonable STR regulations, including prohibitions of STRs in housing subject to rent control or affordability covenants, or limits on the amount of time a residential unit can be used as a vacation rental during a specified period.)
The outcomes in Greenfield, Kracke, and Keen in favor of overnight visitor access to the coast through STRs, in no small part, were dictated by California’s public policy to maximize public access to the coast, a basic goal of the state for the coastal zone. (§ 30001.5, subd. (c).) The appellate panels deciding these cases consistently pointed to that policy. As did the CPA court.
Rebuffing a familiar plaintiff’s creative attempt to pervert this policy, CPA holds that online STR marketplaces are not liable for civil penalties under the Coastal Act for listing on their websites STRs in the coastal zone that have no CDP. This is significant because the Coastal Act requires any person wishing to undertake development in the coastal zone to first obtain a CDP (§ 30600, subd. (a)), and, as defined in the act, the term “development” “is not restricted to activities that physically alter the land or water.” (Pacific Palisades Bowl Mobile Estates, LLC v. City of Los Angeles (2012) 55 Cal.4th 783, 796.) Rather, this term broadly includes, among other things, “change in the density or intensity of use of land” and “change in the intensity of use of water, or of access thereto.” (§ 30106; see, e.g., Spencer v. City of Palos Verdes Estates (2023) 88 Cal.App.5th 849, 868-872 [harassing conduct by surfer gang directly interfering with non-locals’ access to the Pacific Ocean falls within the Coastal Act’s definition of “development”].)
The plaintiff in CPA, Coastal Protection Alliance, Inc., filed suit against Airbnb in late 2020, just 18 days after incorporating as a nonprofit. Its articles of incorporation state its purpose is to “further the interests of the California Coastal Act.” The listed address of its two officers is a home ostensibly within the Mandalay Shores Community Association — the defendant in Greenfield. Seizing on the Coastal Act’s broad definition of “development,” they contended that STRs are “developments” subject to the CDP requirement, and that Airbnb is vicariously liable for civil penalties under the Coastal Act, based on its online hosting of “unpermitted” coastal STR listings. The CPA court saw through this gambit. Affirming the dismissal of the case, the court of appeal remarked: “Taken literally, [plaintiff’s] argument would apply any time there is an increase in the number of occupants at a residence.” (CPA, 95 Cal.App.5th at p. 217.) By the CPA plaintiff’s logic, a change in the intensity of use of land would be deemed to occur and require a CDP “if the occupants of a residence had a baby, took in a house guest or hired a live-in nanny.” (Ibid.) “Even interpreting development broadly, this argument is untenable.” (Ibid.)
The CPA court reasoned that a change in the density and intensity of use of land should be tied to the land’s existing legal use. Relying on Keen, which held that absent a law distinguishing STRs from other residential uses, “the law must treat long-term rentals the same as short-term rentals” (77 Cal.App.5th at p. 148), the CPA court concluded that “where a residential zoning code is silent regarding STRs, using a residence as an STR is a residential use, not a change in use, and thus not a development.” (CPA, 95 Cal.App.5th at p. 218.) The court did not reach this conclusion without noting that the plaintiff’s gloss of the Coastal Act’s definition of “development” “would also undermine the Coastal Act’s goal of maximizing public access to the coast, by limiting the availability of STRs as affordable accommodations for short-term renters.” (Id. at p. 220.)
A few months ago, property owners in Santa Barbara county’s celebrity enclave of Montecito learned their own lesson when they attempted to misuse the California Environmental Quality Act (CEQA) for their own benefit.
In Anderson v. County of Santa Barbara (2023) 94 Cal.App.5th 554, the plaintiffs unsuccessfully attempted to stop the county road commissioner from removing boulders, landscaping, and a “No Parking” sign they had placed without permission in the right-of-way of a public access route to a popular hiking trail, all to prevent hikers from parking in front of their properties. They unabashedly claimed that the county violated CEQA by ordering the removal of the encroachments without studying the potential environmental impacts ensuing elimination of the public nuisance of their own making. Unsurprisingly, that didn’t succeed. Noting that the county project was to maintain the safe traveling condition of the road for vehicles, pedestrians, and cyclists and to restore public parking for hikers, the court ruled that CEQA does not trump criminal law: “Maintaining unpermitted encroachments is a misdemeanor and the road commissioner is authorized to remove such encroachments . […] CEQA is not ‘a limitation or restriction on the power or authority’ of the road commissioner to enforce the encroachment laws. [Citation.]” (Id. at p. 571.)
The collective takeaway from CPA and Anderson is unmistakable: courts won’t be duped into rewarding pretextual exploitation of the Coastal Act or CEQA. Statutes enacted to advance the public’s interests in the California coast, remedy environmental injustices, or foster environmental information disclosure should be used as intended.