Avco Community Developers, Inc. v. South Coast Regional Com

In Avco Community Developers, Inc. v. South Coast Regional Com. (1976) 17 Cal. 3d 785, the developer owned thousands of acres of land in Orange County, a part of which it intended to develop as a planned community development in Laguna Niguel. The county zoned the tract for a planned community development and issued the developer rough grading permits. Avco began building storm drains, culverts, street improvements, utilities and similar facilities for the planned community and another tract. The Legislature then passed the California Coastal Zone Conservation Act of 1972. The act specified any person wishing to develop within the coastal zone after February 1, 1973, had to secure permission from the Coastal Commission. By this date the developer had spent millions of dollars preparing the tract. However, it had not yet submitted building plans and had not yet received a building permit from the county. The developer objected to the new requirement, claiming it had a vested right to construct the planned community without a permit from the commission. The Avco court acknowledged the long-standing rule "in this state and in other jurisdictions that if a property owner has performed substantial work and incurred substantial liabilities in good faith reliance upon a permit issued by the government, he acquires a vested right to complete construction in accordance with the terms of the permit. Once a landowner has secured a vested right the government may not, by virtue of a change in the zoning laws, prohibit construction authorized by the permit upon which he relied." (Avco Community Developers, Inc. v. South Coast Regional Com., supra, 17 Cal. 3d 785, 791.) The court concluded because the developer had not yet acquired a building permit, and thus had not expended substantial efforts in reliance on such permit, it had not acquired a vested right to complete the development without first obtaining permission from the Coastal Commission. (Avco Community Developers, Inc. v. South Coast Regional Com., supra, 17 Cal. 3d 785, 791-799.) In sum, a new land use requirement was enacted after prebuilding permit construction work had been done on a project. The Supreme Court held that a developer has no vested right to complete a project before building permits are issued. In so ruling, the court stated that any change in the rule that a developer has no vested rights in existing zoning must come from the Legislature. ( Id. at pp. 793, 796.) The Legislature accepted the Supreme Court's invitation and responded with a statute permitting local governments to freeze zoning early in the development process and before the issuance of building permits. Indeed, appellants concede that development agreements are permitted before the issuance of building permits, just not too much before.