Court Opinion

ID: 4683802
Source: CourtListenerOpinion
Date Created: 2021-05-04 17:04:33.273642+00
Date Added: 2024-06-11T08:04:17.696820
License: Public Domain

Filed 5/4/21

                CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                 SECOND APPELLATE DISTRICT

                           DIVISION SIX

THEODORE P. KRACKE,                     2d Civ. No. B300528
                                      (Super. Ct. No. 56-2016-
     Plaintiff and Respondent,        00490376-CU-WM-VTA)
                                         (Ventura County)
v.

CITY OF SANTA BARBARA,

     Defendant and Appellant.

       Prior to 2015, the City of Santa Barbara (City) encouraged
the operation of short-term vacation rentals (STVRs) along its
coast by treating them as permissible residential uses. In June
2015, the City began regulating STVRs as “hotels” under its
municipal code, which effectively banned STVRs in the coastal
zone. The City did not seek a coastal development permit (CDP)
or an amendment to its certified Local Coastal Program (LCP)
prior to instituting the ban.
       Theodore P. Kracke, whose company manages STVRs,
brought this action challenging the new enforcement policy.
Following a bifurcated trial, the trial court granted Kracke’s
petition for a writ of mandate enjoining the City’s enforcement of
the STVR ban in the coastal zone unless it obtains a CDP or LCP
amendment approved by the California Coastal Commission
(Commission) or a waiver of such requirement. The City appeals.
       The goals of the California Coastal Act of 1976 (Pub.
Resources Code, § 30000 et seq.; Coastal Act)1 include
“[m]aximiz[ing] public access” to the beach (§ 30001.5, subd. (c))
and protecting “[l]ower cost visitor and recreational facilities.”
(§ 30213; see § 31411, subd. (d) [“A lack of affordable
accommodations remains a barrier to coastal access”]; Greenfield
v. Mandalay Shores Community Assn. (2018) 21 Cal.App.5th 896,
899-900 (Greenfield).) To ensure that these and other goals are
met, the Coastal Act requires a CDP for any “development”
resulting in a change in the intensity of use of or access to land or
water in a coastal zone. (§§ 30600, subd. (a), 30106; Greenfield,
at p. 898.)
       The City contends the trial court erred by concluding the
STVR ban constituted a “development” under the Coastal Act.
But, as the court explained, “[t]he loss of [STVRs] impacted the
‘density or intensity of use of land’ and ‘the intensity of use of
water, or of access thereto’ because STVRs provide a resource for
individuals and families, especially low-income families, to visit
the Santa Barbara coast. The unavailability of low-cost housing
and tourist facilities was an impediment to coastal access.”
Consequently, the Coastal Act required the Commission’s
approval of a CDP, LCP amendment or amendment waiver before
the ban could be imposed. (See Greenfield, supra, 21 Cal.App.5th
at pp. 900-901.) There was no such approval. We affirm.

      1All statutory references are to the Public Resources Code
unless otherwise stated.

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          FACTUAL AND PROCEDURAL BACKGROUND
       The City’s LCP was certified in 1981 when STVRs were
virtually nonexistent. The City maintains that STVRs are not
legally permitted under either the LCP or its municipal code even
though it allowed them to operate until 2015. The City only
required the homeowner to register the STVR, to obtain a
business license and to pay the 12 percent daily transient
occupancy tax. The City’s enforcement efforts focused on
nuisance complaints about a particular STVR. In 2010 and 2014,
the City identified owners who had failed to pay the 12 percent
daily tax and offered them “amnesty” if they voluntarily
complied. The amnesty program was not intended to curb the
number of STVRs but rather to increase the City’s tax revenue.
       As of 2010, there were 52 registered STVRs paying daily
occupancy taxes. By 2015, this number had increased to 349,
including 114 STVRs in the coastal zone. In that fiscal year
alone, the City collected $1.2 million in STVR occupancy taxes.
       In June 2015, City staff issued a Council Agenda Report
advising that “[a]ll vacation rentals or home shares that are not
zoned and permitted as hotels, motels, or bed and breakfasts are
in violation of the Municipal Code.” The City found that the
proliferation of STVRs was driving up housing costs, reducing
housing stock and changing the character of residential zones.
       Following a hearing, the City Council unanimously directed
its staff to proactively enforce the City’s zoning regulations,
“which prohibits hotel uses in most residential zoning districts.”
This action effected an STVR ban in residential areas and strict
regulation of STVRs as “hotels” in commercial and R-4 zones. By
August 2018, the 114 coastal STVRs had dwindled to just 6. As

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one City councilmember observed, “[T]he door is closing on
vacation rentals.”
       Kracke filed this action on November 30, 2016. Six days
later, the Commission’s Chair, Steve Kinsey, sent a guidance
letter to local governments, including the City, outlining “the
appropriate regulatory approach to vacation rentals in your
coastal zone areas moving forward.” He explained: “[P]lease note
that vacation rental regulation in the coastal zone must occur
within the context of your local coastal program (LCP) and/or be
authorized pursuant to a coastal development permit [CDP]. The
regulation of short-term/vacation rentals represents a change in
the intensity and use and of access to the shoreline, and thus
constitutes development to which the Coastal Act and LCPs must
apply. We do not believe that regulation outside of that
LCP/CDP context (e.g., outright vacation rental bans through
other local processes) is legally enforceable in the coastal zone,
and we strongly encourage your community to pursue vacation
rental regulation through your LCP.”
       In January 2017, Jacqueline Phelps, a Coastal Commission
Program Analyst, followed up with the City Planner, Renee
Brooke. Phelps explained that the Commission “disagree[s] with
the City’s current approach to consider residences used as STVRs
as ‘hotel’ uses (pursuant to the City’s interpretation of the
definition of ‘hotel’ included in the [Municipal Code] for the
purpose of prohibiting or limiting STVRs in residential zones.”
She directed Brooke to the 2016 guidance letter and again urged
the City “to process an LCP amendment to establish clear
provisions and coastal development permit requirements that
will allow for STVRs and regulate them in a manner consistent

                                4
with the Coastal Act.” The Commission’s Deputy Director, Steve
Hudson, sent a similar letter a few months later.
      After considering the evidence, the trial court found that
the City’s STVR enforcement policy constituted a “development”
within the meaning of section 30106 of the Coastal Act. It issued
a writ requiring the City to allow STVRs “in the coastal zone on
the same basis as the City had allowed them to operate prior to
June 23, 2015, until such time as the City obtains a coastal
development permit or otherwise complies with the provisions of
the Coastal Act . . . .”2
                            DISCUSSION
                          Standard of Review
      In reviewing a judgment granting a petition for writ of
mandate under Code of Civil Procedure section 1085, we apply
the substantial evidence standard to the trial court’s factual
findings. (Cox v. Los Angeles Unified School Dist. (2013) 218
Cal.App.4th 1441, 1444-1445.) On questions of law, including
statutory interpretation, we apply the de novo standard. (Hayes
v. Temecula Valley Unified School Dist. (2018) 21 Cal.App.5th
735, 746.)
           The City Lacked Authority to Unilaterally Ban
                      STVRs in the Coastal Zone
      The Coastal Act is designed to “[p]rotect, maintain, and,
where feasible, enhance and restore the overall quality of the
coastal zone environment and its natural and artificial

      2Consistent with its prior correspondence with City staff,
the Commission has filed an amicus curiae brief supporting
Kracke’s claims. The League of California Cities’ amicus brief
supports the City.

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resources.” (§ 30001.5, subd. (a); Fudge v. City of Laguna Beach
(2019) 32 Cal.App.5th 193, 200 (Fudge).) It also seeks to
“[m]aximize public access to and along the coast and maximize
public recreational opportunities in the coastal zone consistent
with sound resources conservation principles and constitutionally
protected rights of private property owners.” (§ 30001.5 subd. (c);
Fudge, at p. 200.) The Commission is charged with implementing
the Coastal Act’s provisions and “is in many respects the heart of
the Coastal Act.” (Fudge, at pp. 200-201.)
       The Coastal Act tasks local coastal governmental entities,
such as the City, with developing their own LCPs to enforce the
Act’s objectives. (Fudge, supra, 32 Cal.App.5th at p. 201.) The
LCP’s content is determined by the entity but must be prepared
in “‘full consultation’” with the Commission. (Ibid.) Once
completed, the LCP is submitted to the Commission for
certification. (§§ 30512-30513; Fudge, at p. 201.)
       Although the Coastal Act does not displace a local
government’s ability to regulate land use in the coastal zone, it
does preempt conflicting local regulations. (§ 30005, subd. (a);
City of Dana Point v. California Coastal Com. (2013) 217
Cal.App.4th 170, 200.) “‘[A] fundamental purpose of the Coastal
Act is to ensure that state policies prevail over the concerns of
local government.’ [Citation.]” (Pacific Palisades Bowl Mobile
Estates, LLC v. City of Los Angeles (2012) 55 Cal.4th 783, 794
(Pacific Palisades); see Charles A. Pratt Construction Co., Inc. v.
California Coastal Com. (2008) 162 Cal.App.4th 1068, 1075 [“The
Commission has the ultimate authority to ensure that coastal
development conforms to the policies embodied in the state’s
Coastal Act”].)

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       “[T]he Coastal Act [also] requires that any person who
seeks to undertake a ‘development’ in the coastal zone obtain a
[CDP]. (§ 30600, subd. (a).) ‘Development’ is broadly defined to
include, among other things, any ‘change in the density or
intensity of use of land . . . .’ Our courts have given the term
‘development’ ‘[a]n expansive interpretation . . . consistent with
the mandate that the Coastal Act is to be “liberally construed to
accomplish its purposes and objectives.”’” (Greenfield, supra, 21
Cal.App.5th at p. 900, citations omitted.) Thus, “‘development’”
under the Coastal Act “is not restricted to activities that
physically alter the land or water. [Citation.]” (Pacific Palisades,
supra, 55 Cal.4th at p. 796; Surfrider Foundation v. California
Coastal Com. (1994) 26 Cal.App.4th 151, 158 [“[T]he public access
and recreational policies of the Coastal Act should be broadly
construed to encompass all impediments to access, whether direct
or indirect, physical or nonphysical”].)
       Consequently, “[c]losing and locking a gate that is usually
open to allow public access to a beach over private property is a
‘development” under the Coastal Act. [Citation.] So is posting
‘no trespassing’ signs on a 23-acre parcel used to access a Malibu
beach. [Citation.]” (Greenfield, supra, 21 Cal.App.5th at p. 900.)
Fireworks displays also are considered developments even
though not “commonly regarded” as such. (Gualala Festivals
Committee v. California Coastal Com. (2010) 183 Cal.App.4th 60,
67.)
       In Greenfield, a homeowners’ association (HOA) adopted a
resolution banning STVRs in the Oxnard Shores beach
community. The resolution affected 1,400 single-family units and
imposed fines for violations. (Greenfield, supra, 21 Cal.App.5th
at p. 899.) The City of Oxnard’s LCP, which was certified in

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1982, did not mention STVRs, but Oxnard historically treated
them as residential activity and collected transient occupancy
taxes. (Ibid.)
      A homeowner sought a preliminary injunction enjoining the
HOA’s STVR ban. In denying the request, the trial court rejected
the Commission’s position that the ban constituted a
“development” under the Coastal Act. (Greenfield, supra, 21
Cal.App.5th at p. 899.) We reversed the court’s order, noting “the
[STVR] ban changes the intensity of use and access to single-
family residences in the Oxnard Coastal Zone. [STVRs] were
common in Oxnard Shores before the . . . ban; now they are
prohibited.” (Id. at p. 901.) As we explained, “[t]he decision to
ban or regulate [STVRs] must be made by the City and Coastal
Commission, not a homeowner’s association. [The] ban affects
1,400 units and cuts across a wide swath of beach properties that
have historically been used as short term rentals.” (Id. at pp.
901-902.)
      The same is true here. Although the City, rather than a
private entity, imposed the coastal STVR ban, it also was
accomplished without the Commission’s input or approval. The
LCPs in both cases were certified in the 1980s, decades before
STVRs became popular due to the availability of Internet booking
services. The City incorrectly contends that because STVRs are
not expressly included in the LCP, they are therefore excluded,
giving the City the right to regulate them without regard to the
Coastal Act. As we clarified in Greenfield, regulation of STVRs in
a coastal zone “must be decided by the City and the Coastal
Commission.” (Greenfield, supra, 21 Cal.App.5th at p. 901, italics
added.) The City cannot act unilaterally, particularly when it not

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only allowed the operation of STVRs for years but also benefitted
from the payment of transient occupancy taxes.
      In other words, the City did not merely “turn a blind eye” to
STVRs. It established procedures whereby a residential
homeowner could operate a STVR by registering it with the City,
obtaining a business license and paying the 12 percent daily
transient occupancy tax. When the City abruptly changed this
policy, it necessarily changed the intensity of use of and access to
land and water in the coastal zone. (§§ 30600, subd. (a), 30106;
Greenfield, supra, 21 Cal.App.5th at p. 901.) Instead of 114
coastal STVRs to choose from, City visitors are left with only 6.
This regulatory reduction is inconsistent with the Coastal Act’s
goal of “improv[ing] the availability of lower cost accommodations
along the coast, particularly for low-income and middle-income
families.” (§ 31411, subd. (e).)
      We agree with the trial court that “[t]he City cannot
credibly contend that it did not produce a change because it
deliberately acted to create a change” in coastal zone usage and
access. This change constituted a “development” under the
Coastal Act and, as such, required a CDP or, alternatively, an
LCP amendment certified by the Commission or a waiver of such
requirement.3 (See Greenfield, supra, 21 Cal.App.5th at pp. 901-
902.) Without the Commission’s input and approval, the court
appropriately struck down the City’s STVR regulation in the
coastal zone.
      As for the City’s argument that the Coastal Act exempts
abatement of nuisances allegedly caused by STVRs, the City

     The record reflects that the City submitted an LCP
      3

amendment in 2018. That amendment is pending before the
Commission.

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waived that issue by informing the trial court it was not “making
the nuisance argument.” (See Nellie Gail Ranch Owners Assn. v.
McMullin (2016) 4 Cal.App.5th 982, 997.) Nor are we persuaded
that the political question and separation of powers doctrines
apply. The decision whether to ban or regulate STVRs in the
coastal zone is a matter for the City and the Commission to
decide. (Greenfield, supra, 21 Cal.App.5th at pp. 901-902.) The
trial court appropriately expressed no opinion on the issue and
none should be inferred from either its ruling or our decision.
                           DISPOSITION
       The judgment is affirmed. Kracke shall recover his costs on
appeal.
        CERTIFIED FOR PUBLICATION.

                                    PERREN, J.

We concur:

      YEGAN, Acting P. J.

      TANGEMAN, J.

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                    Mark S. Borrell, Judge
               Superior Court County of Ventura
                ______________________________

      Ariel Pierre Calonne, City Attorney, Robin Lewis, Assistant
City Attorney; Best Best & Krieger, Christi Hogin and Amy Hoyt
for Defendant and Appellant.
      Rutan & Tucker and Philip D. Kohn for League of
California Cities as Amicus Curiae on behalf of Defendant and
Appellant.
      Nossaman, Steven H. Kaufman; Crescent Cheng; Rogers,
Sheffield & Campbell, Travis C. Logue and Jason W. Wansor for
Plaintiff and Respondent.
      Xavier Becerra, Attorney General, Daniel A. Olivas,
Assistant Attorney General, Andrew M. Vogel and Norma N.
Franklin, Deputy Attorneys General, for California Coastal
Commission as Amicus Curiae on behalf of Plaintiff and
Respondent.

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