There's No Such Thing as "Self-Certification"

By the end of the month, HCD will have issued findings on some two dozen cities’ housing elements. Administrative procedure is confusing, and housing elements confuse people. Confusing procedures invite shenanigans. We hear a lot of questions about “self-certification” especially, and the short answer is that it’s a legal way for cities to dare litigation. The long answer is the subject of today’s post.

So–before (guessing!) Goleta, Moraga, San Carlos, Walnut Creek, Colma, San Mateo, Clayton, Danville, Lafayette, and Los Altos Hills learn they’ve got more work to do—let’s look at the statutory roadmap to substantial compliance: what substantial compliance is, and the administrative procedures for achieving it.

“Substantial Compliance” Is a Question of Law

If you’ve read our Sausalito petition,you know that “[s]ubstantial compliance is question of law.” (Pet., ¶ 195.) There are no magic words in law, but the term “question of law” carries legal significance. It refers to the kind of question that only a court can decide. This matters because HCD is not a court. HCD is an administrative agency, and even though it has the duty to “determine whether [a] draft … substantially complies” with the housing-element law (Gov. Code § 65585, subd. d)), HCD’s “written findings” (ibid.) are not binding on courts.

For emphasis: only a court can ultimately decide whether a housing element “substantially complies” with state law. (Fonseca v. City of Gilroy (2007) 148 Cal.App.4th 1174, 1191.) HCD’s determinations are just that: determinations. The courts are free to disagree with HCD, and when they do, their judgments (mostly) control.

• Wait, what do you mean, mostly?

  As with most legal questions, and too often in California, it’s complicated and it depends. There are bits and pieces of the housing-element law, such as the timelines for rezoning, that depend more on HCD’s compliance determinations than those of the courts. (See Gov. Code § 65583, subd. (c)(1)(A) [it’s complicated].) For builder’s-remedy purposes, though, the courts’ compliance findings matter more than HCD’s.

Thing is, most housing elements never get litigated. Few developers want to litigate, and there aren’t (yet) enough YIMBY lawyers to challenge all the bad housing elements. (If you’re a hotshot litigator who’s dissatisfied with modern land-use law, please consider joining us.) For the majority of housing elements, where no one seeks a court judgment, HCD’s compliance findings are simply the best available proxy for “substantial compliance.”

In court, “ ‘substantial compliance’ … means actual compliance in respect to … every reasonable objective of the [housing-element] statute.” (Fonseca, above, at p.1185; see also Camp v. Bd. of Supervisors (1981) 123 Cal.App.3d 334, 348 [a pamphlet doesn’t cut it].) Yes, the “actual” is italicized in the court opinions.

In other words, “substantial compliance” all depends on what the housing-element statute requires. The stronger requirements, like those for constraint removal and about nonvacant lower-income sites, put the burden of proof on the government. (E.g., Gov. Code §§ 65583, subd. (c)(3); 65583.2, subd. (g)(2); 65587, subd. (d).) Weak requirements, such as the requirement to “[a]ffirmatively further[] fair housing,” delegate to cities the task of deciding which actions have “meaning[].” (See Gov. Code § 8899.50, subds. (a)(1), (d).) That’s too bad about the weak requirements, but the strong requirements do debunk the myth that “substantial compliance” means “close enough” or “come on, they tried.” No! Every reasonable objective of Section 65583.2—the site-inventory statute—is a real requirement. (See Fonseca, at pp.1196–97.) And a court can (almost) always enforce those requirements, no matter HCD’s findings.

• Huh? What do you mean, almost?

  Don’t get us started on California’s statutes of limitations.

Don’t Confuse “Certification” with “Compliance”

Like we said, confusing procedures invite shenanigans. We’ve heard a lot of chatter about “self-certification,” i.e., the adoption of uncertified housing elements. As we’ve written elsewhere, certification isn’t at all equivalent to compliance.

A housing element is an element of a general plan. (Gov. Code § 65302, subd. (c).) There are general rules for adopting general-plan revisions; we won’t get into those here. What we’re talking about today are the special rules for revising a housing element. Those rules are in Section 65585 of the Government Code.

The key characteristic of the housing-element revision statute is that it’s an administrative procedure. Section 65585 mandates administrative review of every housing element. HCD is the reviewing agency, and every local government is required to either get certified by HCD or else explain why the local government believes HCD’s findings are wrong. We’re confident the statute requires at least that much.

We read Section 65585 to require at least four distinct actions on the road to compliance: local governments must draft, submit, certify, and adopt. To “draft” is to post for public comment. (Subd. (b)(1).) To “submit” is to seek HCD review. (Ibid.) To “certify”—a term that isn’t in the statute, just fairly implied—is to provide “written findings” that a draft “substantially complies” with the housing-element law. (See subds. (d), (f)(2).) And to “adopt” is to enact in any manner provided by law. (Subds. (b)(1), (e), (f)(2), (g); see id. §§ 65350 et seq.) These are necessary, but not sufficient, procedural conditions for compliance: substantial compliance is a question of law!

Most local governments get the first two procedures right. Things get dicey at and after the certification stage, where the intuitive ideal of “law” breaks down under a 40,000-word statute. We’ll put that problem aside for this paragraph. Obviously, HCD can certify a housing element. This creates a “rebuttable presumption” that the housing element is compliant. (Gov. Code § 65589.3.) Surprisingly to some, local governments can also adopt their housing elements “despite” HCD findings of noncompliance. (Id. § 65585, subd. (f)(2).) There’s just no presumption of validity without HCD certification. (Id. § 65589.3.)

The procedures for adopting an uncertified housing element are sadly too squishy. The governing provision is subdivision (f), and there’s a good argument that a local government, with HCD’s rejection in hand, may only take “one of the following actions”: either “[c]hange the draft … to substantially comply,” or “[a]dopt the draft … without changes.” (Gov. Code § 65585, subd. (f).) In practice, too many local governments to count have adopted their uncertified housing elements with changes. And we simply can’t sue them all.

We think the natural reading of Section 65585 provides for uncertified local governments to “change” their rejected housing elements by resubmitting for HCD certification before adopting. (Gov. Code  § 65585, subd. (f)(1).) The statute clearly authorizes that approach. And we respect that it is procedurally (though not substantially) compliant to adopt a rejected housing element “without changes.” (Id., subd. (f)(2).) But we cannot see how a city or county could argue that the Legislature intended them to make hasty changes in a dash to “self-certify” against the builder’s remedy. The closest viable approach to this argument can only depend on the statute being a word salad.

With all that being said, housing-element adoption shenanigans don’t yet appear to have been addressed by any appellate court. This can’t be lost on the cities that fear by-right affordable housing. As a strategic matter, we only have the resources to sue cities that flunk a clear procedure or adopt an especially bad housing element. So until the law clears up, we need you to demand your city certify with HCD before adopting its housing element.

We’ll cover public comment, and the metastasizing problem of post-adoption staff revisions, in our next post.