Government’s hide-the-ball process demotes California home builder’s property rights

“Trust the process” isn’t just a catchphrase for Randy Ralston. Being process-driven is in his DNA, a natural fit for his early career as a mechanical engineer in San Francisco and later as a spec home builder in San Mateo County.

“When my wife, Linda, and I moved to Half Moon Bay in 1995, we were as poor as church mice, and most houses were out of our price range,” recalls Randy. So, he got a general contractor’s license, mastered the homebuilding process, and began building spec homes.

Randy grew skilled at navigating government regulations and built on land everyone else considered unbuildable. There was no reason to think his next project on a coastal lot would be any different.

He instead became mired in a process that is impossible to navigate or trust: a court-sanctioned government game of hide-the-ball with building permits that’s relegated his property rights to regulatory purgatory.

Randy and Linda bought a residential lot in 2016, intending to build a house for their son or daughter amid the state’s sky-rocketing housing prices. The couple grew concerned their own kids would be forced to join the exodus of young people fleeing the state in search of affordable housing.

“Our kids were still in college, but they certainly couldn’t afford to buy a house on their own,” Linda says. “We felt if we could help them, they’d at least have the option to stay in California.”

Coastal land development in California is uniquely complicated, so Randy and Linda expected challenges. But their lot was residentially zoned, listed by the county as developable, surrounded by other homes, and had no restrictive covenants or other legal roadblocks. Plus, they knew the process.

“We’d been through this before,” Linda says. “We can do hard. We never thought we would hit impossible.”

But they hit impossible when Randy—following the county’s process—applied for the necessary permits. His lot, like thousands of others in California, has a creek and trees. But the county claimed the lot’s location within the Montecito Riparian Corridor is environmentally sensitive under the county’s Local Coastal Plan (LCP) and, thus, a no-build zone.

Certified by the California Coastal Commission (CCC), the LCP strictly limits riparian land to activities such as education and research, fish and wildlife management, trails, and water supply projects. That meant no development, no home, and no reason to pursue a permit. The county would only deny any application they might submit.

The county’s no-build designation also stripped the land of virtually all use. Left with an empty, economically useless lot and no way to recoup the loss, Randy and Linda sued the county and the CCC in federal court. Under the Constitution, the government must pay compensation for such a taking.

The court quickly dismissed the case, however, saying Randy couldn’t claim a taking without a permit denial—a process the county made intentionally labyrinthian, expensive, and pointless. County and CCC rules also categorically trump any permit, and officials had already made it clear he had no chance of getting one. Even if Randy endured the arduous process, the answer would still have to be “no.”

“The government almost dares you to sue because they know they can keep putting off their final answer by banishing you to bureaucratic purgatory. How many people have the stamina and resources to go the distance?” asks Randy. “We knew we were right and the county was wrong. But we took such a financial hit that I don’t know if we would have kept fighting had PLF not stepped in.”

Unfortunately, federal courts have long tolerated complicated bureaucratic processes designed to intimidate citizens and avoid the constitutional consequences of trampling landowners’ rights.

“Federal courts are quite favorable to citizens defending other constitutional rights. But their aversion to questions of property rights effectively gives governments legal cover—and incentive—to stymie landowners with non-existent procedural roadblocks, tripwires, and booby traps,” explains PLF senior attorney Robert Thomas. “A final decision requirement itself isn’t a bad thing. But the government is supposed to help you get there, not force you through an endless Byzantine maze.”

The Supreme Court agrees. PLF’s 2021 win in Pakdel v. City and County of San Francisco affirmed that property owners are under no obligation to waste time and money on futile permitting processes just to get their shot in court. Represented by PLF at no charge, Randy and Linda have asked the Ninth Circuit to reverse the lower court’s dismissal and give them their rightful chance to defend their property rights.

Naturally, Randy views their battle as a process—a legal one—with far-reaching implications for his fellow riparian landowners and all property owners who simply want to use their land.

“I’m grateful that I can give a voice to others who are very frustrated and feel beaten down by a government that’s furthering environmental goals on the backs of taxpaying property owners,” says Randy. “We hope our lawsuit gives the government pause.”

“Victory would mean we can build one more desperately needed house,” adds Linda. “But more importantly, it would send a message that the government can’t just toy with people and their rights.”