How Slow Can You Grow? Ninth Circuit Upholds Constitutionality of Petaluma's Growth Control Plan

The question of whether and how to control growth has come to the fore in the last several years as one of the broadest and most serious environmental issues facing the United States.¹ In the area of land use, this abstract question reduces to the dilemma of managing or controlling the rapid and chaotic development at the perimeters of metropolitan centers which has drastically reshaped the face of our nation since 1945.

Can a small city located within a larger metropolitan region and threatened with strong market pressures for development act to limit numerically its rate of growth? Or must it instead accept all who wish to live there, no matter what the environmental, social and energy costs associated with the resulting "sprawl?" On August 13, 1975, the Ninth Circuit Court of Appeals became the latest court to venture into the constitutional thicket surrounding these questions as it reversed a lower court and upheld a five-year housing and growth limitation plan adopted by the city of Petaluma, Californial.²

A semi-rural community located 40 miles north of San Francisco, Petaluma had grown steadily rom a population of just over 10,000 in 1950 to almost 25,000 in 1970 as people working in San Francisco became willing to commute that distance to live in rural surroundings and relatively inexpensive housing. In 1970 and 1971, this rate of growth became even more rapid, with developers receiving a total of 200 building permits during those two years, and the city's population rising to over 30,000. Alarmed by this accelerated growth rate and its results in the form of sprawling single family home subdivisions laid out in regular grids of quarteracre lots, the city imposed a temporary freeze on construction and zoning changes in early 1971.

After studying the situation, the city council in 1972 adopted the "Petaluma Plan" which restricts the residential growth rate to 500 units per year over the five-year period 1972-1977. This 500-unit figure applies only to housing which is part of a project involving five or more units. The Plan also established a 200 foot wide "greenbelt" around the city to serve as a boundary for urban expansion for at least five and perhaps up to 20 years. The annual awarding of the 500 development-unit permits is based on an intricate point system by which proposed projects are rated for conformity with the city's general and environmental design plans, for good architectural design, and for providing low and moderate income dwelling units and various recreational facilities. Building permits are also to be divided as evenly as possible between the east and west sections of the city and between single-family and multiple dwelling units. Center sections of the city are to be developed first to "infill" vacant areas, and 8 to 12 percent of the housing units approved are to be for low and moderate income persons.

The stated purpose of the Plan was to ensure that "development in the next five years will take place in a reasonable, orderly, attractive manner, rather than in a completely haphazard and unattractive manner," and the 500-unit limitation was expressly intended "to protect [the city's] small town character and surrounding open space." Certain property owners, both within and outside the city, and the local builders' association claimed, however, that the Plan was primarily intended to exclude new residents by limiting Petaluma's housing growth rate to less than projected natural market levels. Such exclusionary restrictions allegedly infringed upon the fundamental constitutional right to travel of prospective residents, and were illegal since preservation of open space and small town character did not represent the compelling state interest necessary to justify such an infringement. The right to travel, as used in this context, means essentially the right to change the place where one lives. Judge Lloyd H. Burke of the federal district court for the Northern District of California agreed with the developer and landowner plaintiffs in a suit challenging the Plan's legality, and held the Plan an unconstitutional denial of the right to travel in so far as it tended "to limit the natural population of the area."³ The city was enjoined from enforcing the Plan, but this order was stayed by Justice Douglas sitting in his capacity as Circuit Justice pending an appeal to the Ninth Circuit.

Although the city claimed that the growth control plan was imposed because of the inadequacy of the municipal water and sewage treatment facilities, the district court found instead that these facilities were adequate to support additional residential growth at projected market levels and that the Plan was therefore based on a simple exclusionary motive. The rate of population growth allowed by the Plan (six percent per year) was only a little more than one-half the rate which market forces would have imposed (more than ten percent per year). Since the San Francisco metropolitan region has a unitary housing market, such exclusionary growth limitation in one municipality merely heightens the development pressures on the other municipal areas, and, [5 ELR 10170] according to the district court, would lead to the proliferation of exclusionary limitations throughout the region.

In reviewing the lower court's ruling, the court of appeals accepted for the purposes of argument the assumption that the 500 housing unit growth rate is in fact below the market demand for such units, and that absent the Plan, the city would grow at a faster rate. The court pointed out that this assumption is open to serious challenge, however, because all projects of four units or less are exempted from the 500-unit limitation. Since plaintiffs failed to introduce any evidence as to the number of exempted units expected to be built during the five-year period, the actual effect of that limitation on the natural growth of housing in Petaluma is uncertain. The court also recognized that if growth restritions identical to those contained in the Plan were adopted by municipalities throughout the region, the impact on the housing market in the form of a decline in housing stock quality, a loss of mobility of current and prospective residents, and a deterioration in the quality and choice of housing available to low and middle income persons would be substantial. If, however, the Plan is considered only with respect to Petaluma, the court noted, it will actually increase the availability of both multi-family and low income units which were rarely constructed in the city prior to the Plan's adoption, and were unlikely to be constructed in the future in the absence of the Plan's 8 to 12 percent low and middle income requirement.

Turning first to the right to travel issue, the court found that while the Plan had clearly caused plaintiffs economic "injury in fact," they were asserting the right to travel claim not on their own behalf, but on behalf of a group of unknown third parties allegedly excluded from living in Petaluma. Noting that litigants are normally barred from asserting the rights or legal interests of others in order to obtain relief from injury themselves, the court held that plaintiffs in this case do not fall within any of the recognized exceptions to this general rule since no special, ongoing relationship exists between them and the alleged victims of exclusion, and if there has been a violation of the rights of prospective immigrants, the victims may assert those rights themselves. The court also pointed out that the economic interests of builders and landowners are clearly outside the zone of interests protected by a constitutional right to travel in any case.

The court ruled that plaintiffs did, however, have standing to challenge the Plan as being arbitrary and therefore violative of their Fourteenth Amendment due process rights, and as an unreasonable burden on interstate commerce, since these claims rested on rights personal to them. In considering the first of these challenges, the court pointed out that practically all zoning restrictions have as a purpose and effect the exclusion of some activity, type of structure, or density of inhabitants. However, judicial review of a challenged zoning ordinance does not terminate upon a finding that it is for an exclusionary purpose; the court must determine further whether the exclusion bears any rational relationship to a legitimate state interest. If it does, the court, under the precedent of Village of Euclid v. Ambler Realty Co.,⁴ must defer to the legislative act.

The Ninth Circuit went on to hold that Petaluma's desire to preserve its small town character, open space, and low population density by avoiding rapid, uncontrolled growth is a legitimate governmental interest which falls within the broad concept of "public welfare" recently enunciated by the Supreme Court in Village of Belle Terre v. Boraas⁵ and by the Ninth Circuit in Ybarra v. City of Los Altos Hills.⁶ In fact, according to the court, the Petaluma Plan is less restrictive than the zoning ordinances upheld in those two cases, because it neither freezes the population at present or near-present levels nor has the undesirable effect of excluding any particular income class or racial minority group. Since the Plan is a legitimate and reasonable exercise of the police power to protect the public welfare, it is not arbitrary and cannot be held to violate the Due Process Clause. The court also ruled, in considering the second challenge, that the Plan does not unreasonably burden interstate commerce since it is rationally related to the social and environmental welfare of the community and does not discriminate against interstate commerce or operate to disrupt its required uniformity. The plaintiffs have announced that they intend to appeal the decision to the Supreme Court.

Coming as the first federal appeals court decision dealing squarely with the legality of local growth limitation or control plans more comprehensive and overt than traditional zoning devices, the Ninth Circuit's ruling in Petaluma will have tremendous impact on the field of local land use control. The other notable judicial test of local growth limitation within the last several years, Golden v. Planning Board of Town of Ramapo,⁷ resulted in the New York Court of Appeals affirming the town of Ramapo's program of "phased-growth" controls. While Ramapo provided support to proponents of local growth limitation, this support was less than fully satisfying since it was a state rather than a federal court ruling and thus of more limited precedential value. In addition, the Ramapo phased-growth plan was more sophisticated than most other municipal growth management plans. The Petaluma decision has somewhat, though by no means completely, clarified this situation by approving a relatively expansive use of the police power for municipal growth control. Local governments are likely to see the decision as a green light for local growth limitation efforts.

The Ninth Circuit decision significantly amplified Belle Terre by defining the public welfare subject to protection by the police power to include specific environmental considerations such as preservation of open [5 ELR 10171] space and a town's rural character. The appellate court, however, failed to consider the merits of plaintiffs' right to travel claim, the sole issue upon which the lower court's ruling was based. The idea of using the constitutional right to travel, transplanted from welfare,⁸ medical care⁹ and voting rights cases,¹⁰ as a club to bring down local growth control efforts is a relatively novel concept which has had a short but highly controversial lifespan. While much attention has been paid to this proposal in the literature,¹¹ the district court opinion in Petaluma is in fact the only example of the right to travel serving as the sole basis for the judicial invalidation of a set of local land use controls. The Supreme Court, on the other hand, in its first decision in 45 years dealing with local land use control, decisively rejected the right to travel argument when it was raised by plaintiffs who sought to overturn a local ordinance prohibiting group occupancy in Belle Terre.

While the Ninth Circuit's ruling that the developer and land owner plaintiffs in Petaluma lacked standing to press a right to travel claim is certainly defensible, it also clearly served as a means by which the court could avoid a detailed consideration of the thorny right to travel issue. The racially and economically segregated housing patterns in many of the nation's urban areas are a pressing problem: the real question in Petaluma, however, is whether local land use regulations which allegedly cause such patterns should be challenged as violating an amorphous constitutional right to travel, or whether they should instead be tested on the more familiar grounds of substantive due process and equal protection, which have served as the constitutional standards for local land use ordinances ever since Village of Euclid. The stakes involved are high. The logical extension of the district court's view that the right to travel standard is applicable to local land use controls is that any such controls which serve to restrict a town's population to less than its maximum capacity under free market conditions are unconstitutional, as no land use ordinance can survive the "compelling state interest" test. Since almost all local land use regulations have at least some indirect exclusionary effect, judicial acceptance of a fundamental personal right to travel as a proper standard by which to test such regulations would, it seems, inevitably result in the invalidation of almost all such measures tested, setting the entire discipline of land use control back to square one. Such a result would also seem to be in direct conflict with the Supreme Court's disposition of the right to travel claim in Belle Terre.

Although the Ninth Circuit did not analyze this issue to any real extent in its Petaluma opinion, the court did at least hint in a footnote as to its view of the applicability of the right to travel argument to Petaluma's growth control plan. Pointing to the Supreme Court's holding that the ordinance challenged in Belle Terre was no infringement of anyone's right to travel because it was not aimed at transients, the court of appeals went on to imply that the Petaluma Plan did not violate the right to travel for the same reason:

Although due to appellees' lack of standing we do not reach today the right to travel issue, we note that the Petaluma Plan is not aimed at transients, nor does it penalize those who have recently exercised their right to travel.

Despite its enlightened view of the permissible scope of the local police power to implement land use control measures and its implication that the Petaluma Plan does not abridge anyone's constitutional right to travel, two aspects of the Ninth Circuit's opinion are nonetheless troublesome. The first is the statement that prospective residents allegedly excluded from living in Petaluma by the city's growth control plan could challenge the plan's legality on their own behalf. Although the Ninth Circuit was referring to a right to travel claim, its statement also applies to equal protection and due process claims against an allegedly exclusionary land use ordinance. The problem, however, whether the suit is based on equal protection and due process or on right to travel, is that the standing hurdle constructed by Justice Powell for such challenges by non-residents in the recent Supreme Court decision in Warth v. Seldin¹² is so high as to be almost insurmountable.

According to Justice Powell, a non-resident plaintiff who challenges supposedly exclusionary zoning practices "must allege specific, concrete facts demonstrating that the challenged practices harm him, and that he personally would benefit in a tangible way from the court's intervention" (Emphasis the Court's). In Warth the Court held that low and moderate income plaintiffs lacked standing because they had failed to show that a zoning scheme which appeared on its face to be exclusionary prevented construction of housing which they could afford within the municipality, or that judicial invalidation of the zoning ordinance would result in the building of such housing. This failure consisted of not demonstrating a connection between themselves as intended or prospective residents and an actual housing project. According to the Court, their allegations suggested instead that their inability to reside in the community was a consequence of the economics of the area housing market rather than the city's allegedly illegal acts. Whether a non-resident can ever meet such a speculative [5 ELR 10172] burden of proof prior to discovery and establish standing is highly questionable, however. Although right to travel claims against local land use control ordinances should be rejected, prospective low income residents must be able to challenge on equal protection and dur process grounds any local zoning or growth control ordinance which has exclusionary effects in order to test whether the scheme is rationally related to a legitimate state interest. The possiblity of such suits is necessary to prevent municipalities, encouraged by Petaluma, from overstepping the proper bounds of the police power in implementing growth controls.

The second problematic aspect of the Ninth Circuit's opinion is its downplaying of the regional implications of Petaluma's growth limitation efforts. The court explicitly recognized the possibility that exclusionary growth management could proliferate throughout the San Francisco metropolitan region as development pressures are simply shunted from one municipality to the next. Such growth control would in itself be haphazard, leading to greater than natural development pressures on those cities which do not join in adopting growth control measures. This then is a central paradox underlying the whole local growth control issue: the implementation of land use planning and growth limitation at the local level may make such planning and control at the regional level much more necessary, and yet at the same time more difficult. But the Ninth Circuit declined to face this problem on the ground that "the federal court is not a super zoning board and should not be called on to mark the point at which legitimate interests in promoting the welfare of the community are outweighed by legitimate regional interests." The solution, as the court sees it, must be determined through legislative rather than judicial channels.

If the present system of delegated zoning power does not effectively serve the state interest in furthering the general welfare of the region or entire state, it is the state legislature's and not the federal court's role to intervene and adjust the system.

Here again, the court's basic position is no doubt correct, but legislative response to this problem is likely to be slow in coming at both the state and federal levels. The court's failure to probe more deeply into this paradox and discuss more thoroughly the possible regional ramifications of its decision further contributes to uncertainty among local governments, regional planners, and developers as to how to proceed in the interim.¹³

It has already been noted that local governments will most likely see the Petaluma decision as an invitation to undertake growth control programs. While the decision does carry that message, it is also a direct challenge to Congress and state legislatures to enact comprehensive federal and state land use planning laws. The present prospects for passage of a national land use statute, which would fund the development of state and regional land use planning programs, are not bright; opposition from builders, developers, local politicians and chambers of commerce has been both strong and effective. Interestingly enough, the Ninth Circuit's decision in Petaluma could have the effect of reversing some of this opposition. If local growth control measures do in fact proliferate throughout a metropolitan region, builders and developers might find themselves essentially zoned out of the entire area, whereas a regional land use plan would at least provide for measured growth in some parts of the region.

The Ninth Circuit's decision in Petaluma is, overall, a welcome precedent. It validates the relatively expansive use of the police power for the protection of environmental amenities through local growth control measures, and will tend to right the balance between sound local land use regulation and unrestrained development, a balance too long skewed in favor of the latter. On the other hand, the decision is less than satisfying in that the court skirted some of the most difficult issues inherent in local land use control, including the applicability of the constitutional right to travel in exclusionary zoning cases and the inherent conflict between local growth control efforts and comprehensive regional planning. The court's stated rationale for failing to come to grips with the latter problem, however, actually serves as a reminder to Congress, as if any further reminder was necessary, that enactment of a national land use law which provides funds for the development of state and regional land use planning programs is long overdue.

1. See Note, Controlled Growth as a Planning Alternative: An Overview, 4 ELR 50076 (1974).

2. Construction Industry Association v. City of Petaluma, 5 ELR 20519 (9th Cir. Aug. 13, 1975).

3. Construction Industry Association v. City of Petaluma, 375 F. Supp. 574, 4 ELR 20454 (N.D. Cal. 1974).

4. 272 U.S. 365 (1926).

5. 416 U.S. 1, 4 ELR 20302 (1974).

6. 503 F.2d 250, 4 ELR 20743 (9th Cir. 1974).

7. 30 N.Y.2d 359, 285 N.E.2d 291, 334 N.Y.S.2d 138, 2 ELR 20296; appeal dismissed, 409 U.S. 1003 (1972).

8. Sharpiro v. Thompson, 394 U.S. 618 (1969).

9. Memorial Hospital v. Maricopa County, 415 U.S. 250 (1974).

10. Dunn v. Blumstein, 405 U.S. 330 (1972).

11. See e.g., A Strict Scrutiny of the Right to Travel, 75 Colum. L. Rev. 1129 (1975), The Right to Travel: Judicial Curiosity or Practical Tool?, 52 J. Urb. L. 749 (1975), The Right to Travel and Exclusionary Zoning, 26 Hastings L.J. 849 (1975), and The Right to Travel: Another Constitutional Standard for Local Land Use Regulations?, 39 U. Chi. L. Rev. 612 (1972).

12. 43 U.S.L.W. 4906 (U.S. June 25, 1975).

13. Some state courts have considered regional impacts in exclusionary zoning cases. See e.g., Southern Burlington County NAACP v. Township of Mount Laurel, No. A-11 (N.J. Sup. Ct. Mar. 24, 1975). The court in Mount Laurel overturned portions of a town's general zoning ordinance which allowed only single-family detached dwellings because, inter alia, it failed to provide adequate housing for all categories of people, including those with low and moderate incomes, according to the town's "fair share" of the effort to meet regional housing needs. It is instructive to contrast this situation with the circumstances in Petaluma, where the city's land use plan specifically required that 8 to 12 percent of new housing construction consisting of 5 or more units be for low and moderate income residents. The 6 percent annual population growth rate permitted under Petaluma's Plan was also substantially above the current 2 percent growth rates of both the San Francisco Bay Area and the state of California as a whole.