Avco Community Developers, Inc. v. South Coast Regional Commission
132 Cal. Rptr. 386, 553 P.2d 546, 17 Cal.3d 785 (1976)
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Rule of Law:
A developer does not acquire a common law vested right to complete a project, and thereby be exempt from new laws, unless they have obtained a building permit for specific structures and performed substantial work and incurred substantial liabilities in good faith reliance on that permit. Preliminary approvals such as subdivision maps, zoning, and grading permits are insufficient to vest such a right.
Facts:
- Avco Community Developers, Inc. (Avco) owned a 7,936-acre property in Orange County, which it was developing as the Laguna Niguel Planned Community.
- In 1971, Orange County zoned a portion of the property, including the 74-acre tract 7479 at issue, as a 'Planned Community Development'.
- In 1972, the county approved a final subdivision map for tract 7479 and issued Avco a rough grading permit.
- Relying on these county approvals, Avco subdivided and graded the property and began installing improvements such as storm drains, culverts, street improvements, and utilities.
- By February 1, 1973, the effective date of the California Coastal Zone Conservation Act, Avco had spent $2,082,070 and incurred liabilities of $740,468 for these preliminary improvements.
- As of that date, Avco had not completed the rough grading, had not submitted building plans for any specific structures on the tract, and had not applied for or obtained any building permits.
Procedural Posture:
- Avco applied to the California Coastal Zone Commission (the commission) for an exemption from the Coastal Act's permit requirements, claiming a vested right to complete its project.
- The regional commission, and subsequently the statewide commission on appeal, denied Avco's application for an exemption.
- Avco filed a petition for a writ of mandate in the trial court to compel the commission to grant the exemption.
- The trial court denied the writ, holding that because Avco did not have a building permit, it did not have a vested right to construct the buildings and was therefore not exempt from the Act's permit requirement.
- Avco appealed the trial court's judgment.
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Issue:
Does a developer acquire a common law vested right to complete construction of buildings without a permit from the California Coastal Zone Commission, thereby exempting it from the Coastal Act's permit requirements, if it has subdivided and graded the property and installed utilities in reliance on local government approvals, but has not yet obtained a building permit for any specific structures?
Opinions:
Majority - Mosk, J.
No, a developer does not acquire a vested right to complete construction under these circumstances. To acquire a vested right to construct buildings, a developer must have obtained a building permit and performed substantial work in reliance thereon before the new law's effective date. The court reasoned that neither the existence of a particular zoning nor work done pursuant to preliminary governmental approvals can form the basis of a vested right to build a structure that does not comply with the laws applicable at the time a building permit is issued. Relying on precedent from Spindler Realty Corp. v. Monning, the court held that approvals for work preliminary to construction, such as subdivision maps and grading permits, do not grant a right to build specific structures. The government makes no representation that a developer will be exempt from future zoning laws until it issues a final discretionary approval, typically a building permit, for identifiable buildings. Without such a permit, the scope of any purported vested right is impossible to determine, and allowing rights to vest at an earlier stage would severely impair the government's ability to control land use policy.
Analysis:
This decision established a firm, late-vesting rule for development rights in California, significantly strengthening the government's police power to enact new land-use and environmental regulations. By tying vested rights to the issuance of a building permit for a specific structure, the court placed the risk of regulatory change squarely on developers during the lengthy and expensive subdivision and site preparation phases. This precedent makes it more difficult for developers to claim exemption from new laws, such as environmental protections or downzoning, based on preliminary approvals and expenditures. The ruling ensures that land use policies can evolve without being permanently frozen by early-stage development activities, prioritizing public regulatory authority over a developer's investment-backed expectations.
