Real Estate & Property Law

Permit Condition Requiring "Active" Farming Struck Down Under Nollan/Dolan

By Robert Thomas (inversecondemnation.com)

We rarely post developments from trial courts, but every now and then a trial court order is so interesting that we deviate from our usual rule. Here's one that's worth sharing.

In Sterling v. California Coastal Comm'n, No. CIV. 482448 (Cal. Super. June 18, 2010), the San Mateo County Superior Court (the county immediately south of San Francisco) invalidated a permit condition imposed by the California Coastal Commission that would have required the property owners maintain their property "in active agricultural use," meaning that they "either personally conduct agriculture on all their land or enter into a lease with a third party willing to engage in agricultural use on the land." In other words, forced farming.

You read that right. Did we mention that the family seeking the permit are not farmers or ranchers, that the vast majority of the 143-acre parcel is not prime ag soil, that the property could not be "viably farmed," and that they sought the coastal development permit to build a house?

Read the court's decision for the procedural details, but here are the highlights. The Sterlings purchased a 147-acre parcel in rural San Mateo County zoned Planned Agricultural Development, a designation that permits up to two homes on the parcel. Only 10 acres of that land are considered prime agricultural soil, and no part of the parcel was farmed. A portion of the upland portion was leased to nearby ranchers to graze 10 head of cattle, with no profit to the Sterlings. The Sterlings sought the permission of the County to build a single home and proposed that the grazing of the 10 head of cattle continue. The County unanimously approved, with 32 conditions (none of which are germane here).

The California Coastal Commission, however, would have none of it. It appealed the approval, "to itself." After a more than two-year delay in which the Coastal Commission refused to hold hearings, it approved of the home building plan subject to 11 new conditions and the 32 conditions already imposed by the County. Here's the agricultural use easement condition:

All areas of the Property [except for the 10,00 square foot development area and driveway] shall at all times be maintained in active agricultural use.

the Sterlings must, as permittees, "either personally conduct agriculture on all their land or enter into a lease with a third party willing to engage in agricultural use on the land;"

"[Prior to issuance of the coastal development permit], the applicants [the Sterlings] shall dedicate an agricultural conservation easement to a public agency or private association approved by the [Commission] Executive Director."

the "easement deed shall run with the land in favor of the People of the State of California...and shall be irrevocable."

Slip op. at 4. Rather than accept the permit with the conditions, the Sterlings sought a writ of administrative mandate.

The court concluded that the agricultural easement was a taking because there was no Nollan nexus between the exaction and any reasons that would support denial of the permit, nor was there Dolan "rough proportionality" between the proposed development (less than one acre), and a perpetual easement of 142 acres. 

On the Nollan issue, the court concluded the property was not being used for agriculture, so the Sterlings' home would not interfere with actual agricultural use, only potential agricultural use. Yet, the exaction required actual agricultural use, "rather than simply ensuring agricultural potential." Slip op. at 6.

The court also rejected the Commission's claim on the Dolan issue that the exaction was proportional since the Sterlings already engage in agricultural use (remember those 10 head of cattle?). The court held the grazing was voluntary, and it was not proportional to impose a mandatory requirement to farm or ranch simply because the property owner voluntarily allowed a few cows to graze his land. The court also concluded that the exaction was disproportionate since it virtually wiped out any further development rights in the parcel when compared to the 10-cattle grazing plan. See slip op. at 8.

Finally, the court rejected the Coastal Commission's argument that the easement was justified to protect agriculture:

Protecting agriculture is a valid government goal. But the means chosen here by the CCC to achieve that goal -- imposing the affirmative agricultural easement on the Sterlings -- cannot pass constitutional muster because they are neither (1) clearly nor (2) proportionately connected to the impact of the Sterlings' home. The easement condition is irreconcilable with Nollan, Dolan and the Constitution, and must be set aside. The petition for writ of mandate is granted.

Slip op. at 9.

Full post as published by inversecondemnation on June 24, 2010 (boomark / email).