A recent trend in Southern California cities has real estate developers concerned. Simply stated, cities are being restricted from issuing zoning changes which are crucial for new development projects. Cities like Malibu, Encinitas, and Newport Beach are just a few examples of cities that already have restrictions in place that prevent them from issuing the zoning changes for real estate development projects.
Several initiatives are headed to the ballot this fall in Southern California that may continue this anti-development trend. For example, in Costa Mesa, voters will get to decide in November whether major development projects requiring density and other major changes should be decided by a public vote. This initiative is similar to the current requirement in the City of Newport Beach which requires that developers obtain voter consent for any and all zoning changes.
In a more extreme example, an initiative in the City of Los Angeles has recently proposed a two-year moratorium on all projects requiring zoning changes and may result in recently granted zoning changes being reversed. Since the city’s zoning code is several decades old, this initiative would likely halt many small and large projects because new construction in Los Angeles generally requires more density than what they were originally zoned for.
Some experts have predicted that this initiative, as well as the other initiatives that shift the traditional power of local governments to the voter base, will have a chilling effect on development throughout the region. These restrictive initiatives make it more important than ever for developers to consult with a seasoned real estate and land use attorney to discuss the additional risks of taking these projects to a public vote.
L. Sue Loftin is the Founder and Managing Shareholder of The Loftin Firm. For questions relating to this blog or any other California real estate, corporate governance, land use, or estate planning matter, contact Ms. Loftin at 760-814-9649.