Cuidado with Decisions that Hit Too Close to Home (Literally)
By Ruben Duran
Mi casa es su casa is a good rule of thumb in a close, tight-knit community, and welcoming friends and neighbors into the fold for celebrations and gatherings is ingrained in many peoples’ DNA. Nevertheless, when it comes to complying with ethics requirements for potential conflicts of interest involving your house or other property you own or lease, there are some things you must always keep in mind.
For public officials, statewide regulations set strict requirements when decisions may impact the use, enjoyment or services to your property, with a different set of rules (the FPPC calls them “materiality standards”) applying depending on whether you own or lease the property. In fact, when the decision’s impact is likely to affect property values within a certain distance of your property, whether a personal residence, income property or commercial property, recusal from that decision is generally the rule, not the exception.
There are lots of obvious, “reasonably foreseeable” financial effects that disqualify you from making decisions likely to impact your property. These include decisions that could impact your property taxes or change whether you can sell your house. But the property-related ethics rule that gives public officials the biggest headache, and that I field the most questions about, is the“500 foot rule.”
When a decision has any possibility of affecting property values within 500 feet of your property line – you cannot participate in that decision.
This can be especially frustrating for public officials in a small town or city, where a high percentage of decisions affects constituents in the vecindad.
Some examples of where the law presumes the financial effect of a decision is material to your real property interests:
- If the decision involves adopting or amending a general plan or a specific plan that covers your property;
- If the decision relates to the zoning or rezoning of your property;
- If the decision imposes, repeals or modifies any tax, fee or assessment on your property;
- If the decision is to sell, buy or lease property in which you have a financial interest (that’s an easy one, right?);
- If the decision involves a license, permit or other land use entitlement (such as a conditional use permit or a variance) on your property;
- If the decision relates to improvements to streets, water, sewer, storm drain or other public facilities that affect your property, unless that effect is the same as for the public generally.
There is one exception if you believe the decision affects property values within 500 feet of yours, but also believe it would not have a reasonably foreseeable impact on your property specifically. You can request (or ask your public agency’s attorney to request) a written opinion from the FPPC allowing participation based on the specific facts of the decision in question. A couple important qualifiers: there are different ethical standards than the “500 foot rule” when the decision may impact commercial property where you have a business, and real property that you lease to others. Be sure to check with your agency counsel on specifics, because the rules can be tricky.
In any situation where you will be asked to make a decision regarding property located close to property in which you have either an ownership or a leasehold interest – be sure to check with your public agency’s attorney. Property-related ethics rules help all of us ensure the public has full confidence that a decision maker is looking out for the community at large, and not his or her own property values or real estate investments.
Ruben Duran serves as general and special counsel to public agencies throughout Southern California, including cities, special districts, school districts and special-purpose entities in health care, job training and development and air quality management. He is a member of the Cannabis Working Group at Best Best & Krieger, which advises the firm’s clients on all aspects of marijuana laws and regulations.