Lunada Bay coast, Palos Verdes Estates, California
LOS ANGELES — A state appeals panel has reversed a ruling to hold people building homes and accessory dwelling units can sue California local government agencies over alleged costly permit approval delays.
Homeowner Wei Shi sued the city of Palos Verdes Estates under the state’s Government Claims Act seeking to recover damages for allegedly violating its duty to approve an accessory dwelling unit (ADU) permit he sought in 2020.
Palos Verdes Estates sits on the Palos Verde Peninsula on L.A. County’s coast, just south of Torrance. The community prides itself on being the result of a master plan created by renowned landscape architect Frederick Olmstead in the 1920s. The community of about 14,000 residents is considered one of the most exclusive and wealthiest suburbs not only in California, but in the entire U.S.
According to Shi, he had planned to complete the ADU at the same time he built a primary home on the same lot, which he claims would’ve been possible had the city met is obligation of approving the application for both projects simultaneously. Instead, he claimed, the city “imposed a planning process that — in letter and spirit — violated” state law and delayed approval for more than three years, which he said cost more than $1 million.
In addition to demanding a conditional use permit, Shi alleged, the city imposed a discretionary review process, while also requiring approval from the Palos Verdes Homes Association Art Jury. He further claims Janine Nendick, the city planning commissioner, personally lobbied neighbors to oppose the project.
The city sought dismissal of the complaint, arguing lawmakers didn’t intend the law to protect against the damages Shi alleged, and therefore he had no right to sue.
Los Angeles County Superior Court Judges Amy Carter and Alan Honeycut ultimately ruled in the city’s favor, finding the law was intended “to alleviate California’s housing crisis by streamlining the permitting process for the building of ADUs, not to protect individuals from the additional costs created by permitting and approval delays. The statute aims to create more houses for California residents, not protect the investments of individuals who choose to build ADUs."
Shi challenged the ruling before the California Second District Appellate Court. Justice Nicholas Daum wrote the panel’s opinion, filed Oct. 23; Justices Helen Zukin and Audra Mori concurred.
“We do not find statutory interpretation difficult here,” Daum wrote. “Section 66317 imposes a mandatory duty on local governments to promptly and ministerially consider and approve ADU permits. Intended beneficiaries of that duty are applicants for ADU permits — people like Shi. Allowing permit applicants to receive the benefit of ministerial approval of an ADU without discretionary requirements and burdensome local regulations is not ‘incidental’ to section 66317. It is the point of section 66317.”
The panel said it believed the statute is clear enough on its own, but expanded the scope to find confirmation in related provisions, such as language calling accessory units “an essential component of California’s housing supply” and lawmakers declaring the intent to make sure local regulations “are not so arbitrary, excessive or burdensome so as to unreasonably restrict the ability of homeowners to” build accessory units.
Daum further explained legislative history — although not needed for the conclusion — supports the panel’s position. He also explained why the city’s arguments regarding the law’s lack of direction mention of damages or compensation for delays “misses the point.”
Shi didn’t argue the law itself created his right to sue, Daum explained. Rather, he said the law creates the duty that — if a public body falls short — creates a path to litigation under the Government Claims Act. Further, while the panel agreed lawmakers intended to encourage accessory unit construction to address a housing shortage, he said the city was wrong to suggest there wasn’t concern for protecting homeowners.
“The means by which the Legislature sought to alleviate the housing crisis through section 66317 was to encourage homeowners to apply for permits and build ADUs without undue interference from local governments,” Daum wrote. “Significantly, section 66317 does not place a duty upon local agencies to alleviate the housing crisis. Rather, section 66317 places a duty on local governments to consider and approve permits ministerially. Thus, as we explained above, permit seekers are the direct and intended beneficiaries of the relevant duty.”
The panel reversed the superior court ruling and said Shi is entitled to recover his costs for pressing the appeal.
Shi is represented by Jeff Lewis Law.
The city is represented by Best Best & Krieger.
