Megamansion developers in Los Angeles got a big win this month after the California Supreme Court significantly restricted the circumstances in which single-family homes can be subject to costly environmental reviews.

As some homes in posh communities such as Bel Air and Beverly Hills have come to rival the size of shopping centers, foes of mansionization have argued the massive projects should be held to the same standard as large commercial developments. They frequently use the California Environmental Quality Act, or CEQA, as a cudgel to fight such plans in court.

But the high court’s March 2 decision raises the bar for opponents to use CEQA to demand environmental reviews for single-family home projects. The ruling put the onus on opponents of a project to document the alleged environmental impact before they can bring a CEQA action.

Tim Piasky, chief executive of the Building Industry Association of Southern California’s L.A. and Ventura chapter, said he hoped the ruling would put a stop to some of the litigation surrounding these projects.

“The original intent of CEQA, which we agree with, is to protect the environment. But project opponents are abusing CEQA and using it as a method to stop or oppose projects just because they don’t like them,” he said.

Indeed, the law has been the go-to vehicle for disgruntled neighbors fighting construction projects in their communities, who only needed to suggest that a project might have a negative environmental impact.

“A year or two ago, no one was using CEQA to stop (residential) developers,” said Edgar Khalatian, partner in the downtown L.A. office of law firm Mayer Brown who regularly represents developers in land-use disputes. “It’s very frustrating for them because they know that’s not what CEQA was intended to do. Now they feel vindicated.”

The court’s decision is unlikely to affect developments already in the pipeline, such as a partly built megamansion on Strada Vecchia Road in Bel Air being built by Mohamed Hadid. That project has been on hold since the city of Los Angeles revoked its building permits last year and issued a stop-work order. Hadid has endured significant opposition from neighbors over the 30,000-square-foot home.

However, the ruling could simplify the process for similar controversial projects in the future.

Homebuilders required to develop a plan to reduce the environmental impact of their project can spend $50,000 to $75,000. A full environmental impact report required under CEQA can cost up to $250,000 – much more than a mitigation plan – and take about nine months longer to complete.


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