SB 35 was one of the most prominent bills to come out of a package of housing-related laws enacted by the California legislature in 2017. It promised to allow swift approval of developments that were consistent with local zoning and design standards. As long as a project met those standards, a city would have no choice but to approve the development. SB 35 was designed to ensure a project could be approved, even without support from elected officials or local neighbors. But a lingering question remained: once a project was approved, could local opposition groups use SB 35 to delay a development or overturn the approval in court?

A recent Santa Clara County trial court decision answers the question: SB 35 does not require cities to reject an SB 35 application, and so local opposition groups cannot rely on the law to ask a court to overturn a project approval.

The case involved redevelopment of Cupertino’s Vallco Fashion Mall under SB 35. The Vallco project proposed to add 2,402 units of housing to Cupertino, including 1,201 affordable units. The City reviewed the project and determined it was consistent with local standards, and the project was therefore approved under SB 35.

In a contentious proceeding, a group of Cupertino residents known as Friends of Better Cupertino petitioned to overturn the approval. On May 6, 2020, the Court rejected each of petitioner’s arguments in a detailed, carefully reasoned 62-page decision (available here). Friends of Better Cupertino could not compel Cupertino to reject a project under any circumstance, because Cupertino had no legal obligation to deny the project application.

SB 35 provides for a streamlined process and requires cities to provide that streamlined process to compliant projects. The Vallco project complied with objective standards and was properly processed under SB 35. But the court determined that even if Cupertino had erred when it found that the Vallco Project complied with objective standards, Friends of Better Cupertino could not force the city to reject the application for approval under SB 35.

Vallco’s case is the second SB 35 decision issued by the same judge, and the two decisions present a persuasive roadmap for other judges and municipalities attempting to interpret and apply SB 35. The decision, if applied in other cases, will significantly limit the ability of opponents to ask a court to reconsider a city’s SB 35 approval or otherwise tie up approved projects in years of litigation.

In the second case, the City of Los Altos attempted to deny a 15-unit project submitted under SB 35. But the City’s denial letter did not follow the strict requirement in SB 35 to identify specific objective standards with which the project conflicted. Instead, the denial letter referenced vague, unmeasurable standards like whether parking access was “adequate.” In the decision, issued on April 27, 2020 (available here), the Court ruled that the City’s denial letter was inconsistent with SB 35 and therefore ineffective. Because the City failed to issue a valid inconsistency determination within the statutory deadline, under SB 35 the project “was deemed to comply with objective standards as a matter of law.” The Court directed the City to approve the project.

In tandem, these two decisions illustrate that SB 35 is a powerful tool—not just to obtain swift approval of a development, but also to limit lengthy litigation challenges. The decisions should help shape SB 35 as a force to ensure needed housing development both in the Bay Area and throughout California.

 

Coblentz Patch Duffy & Bass LLP attorneys assisted the applicant, Vallco Property Owner LLC, and its affiliate, Sand Hill Property Company, during all stages of entitlements and in the Friends of Better Cupertino litigation.