Does a California city's land outside its city limits, in an unincorporated part of a neighboring county, have to follow that county's zoning and building rules? What about a private business that leases the land from the city?

Plain-English summary

Mendocino County asked the AG a question that comes up wherever cities own land outside their borders: who gets to write the zoning and building rules for that land? The setup that prompted the request was a 1993 city acquisition of property in unincorporated county territory, with an existing private lease the city had to step into.

AG Xavier Becerra concluded that for the city's own use of the property, county building and zoning ordinances do not apply. The reasoning runs through Government Code section 53090 et seq., the statutory scheme the Legislature enacted after the California Supreme Court's 1956 Hall v. City of Taft decision. In Hall, the Court held that a public school district was an "agency of the state" not subject to a city's building regulations. The Legislature responded by passing section 53090, which generally requires "local agencies" to comply with the building and zoning ordinances of the city or county in which they sit. But the Legislature drafted section 53090's definition of "local agency" to exclude cities and counties: "an agency of the state for the local performance of governmental or proprietary function within limited boundaries [but which] does not include the state, a city, [or] a county."

That exclusion is what does the work. By keeping cities and counties out of the "local agency" definition, the Legislature did not change the regulatory balance between cities and counties. Each remains free of the other's zoning and building regulations when it acts on its own property. Court of Appeal cases have applied this in both directions: a county fairground inside a city is not subject to the city's building code (Akins v. County of Sonoma), and a city sports complex in unincorporated county territory is not subject to the county's zoning regulations (Lawler v. City of Redding).

The AG also clarified that the city is not required to apply its own building or zoning ordinances to the extraterritorial property as a condition of being free from the county's. Nothing in the statute or constitutional structure imposes such a condition. But the California Building Standards Code (Title 24 of the California Code of Regulations) is a statewide standard under the State Building Standards Law, and it applies to buildings throughout California. So while county-level building codes do not bind the city's extraterritorial parcel, statewide building standards do.

For the private-lessee question, the AG drew on a 1985 opinion analyzing a state agency's lease of state-owned land to a private developer. The principle from that opinion: when the public entity's property is leased "to private individuals or associations in order for the lessee to use it for public purposes, the user is clothed with immunity to the same extent that the state would have if it were the operator. When, however, [the public entity's] owned property is leased to another for the latter's private purposes, it is not immune from local zoning regulations."

So a private business leasing extraterritorial property from a city must look at why the city leased it. If the lessee's use primarily serves the city's purposes (the lessee functions as an arm or agent of the city), the lessee shares the city's freedom from county zoning and building rules. If the lessee's use primarily serves the lessee's private commercial interests, the county's ordinances apply to that lease.

Currency note

This opinion was issued in 2018. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

The Government Code section 53090 et seq. framework has been stable since the Legislature enacted it post-Hall, but specific Health & Safety Code provisions on the State Building Standards Code are amended frequently. Counties and cities considering this question in current matters should verify both current statute and any later AG opinions or appellate decisions on extraterritorial municipal property.

Common questions

Q: Why does a city own property in another county at all?
A: California Government Code section 37351 lets cities "own and control real estate situated inside or outside the city limits as is necessary or proper for municipal purposes." Cities commonly own watershed land, reservoir sites, sewage treatment plants, sports complexes, fairgrounds, and surplus parcels in adjacent unincorporated territory. The land remains the city's, but it is not part of the city for incorporation purposes.

Q: Why doesn't the county zoning apply automatically to land inside the county?
A: Because of how the Legislature drafted Government Code section 53090. After the Hall v. City of Taft decision held that public school districts were exempt from local building regulations as "agencies of the state," the Legislature stepped in to require generic "local agencies" to follow city and county building and zoning ordinances. But section 53090's "local agency" definition explicitly excludes cities and counties. So while a special district has to follow city/county rules, a city or county acting on its own property does not.

Q: Does that mean the city's extraterritorial property is unregulated?
A: No. Two layers still apply. First, the California Building Standards Code (Title 24, CCR) applies statewide under the State Building Standards Law (Health & Saf. Code § 18901 et seq.): buildings on the city's parcel must meet those standards. Second, the city itself can impose its own ordinances on the extraterritorial property through ordinances or contractual agreements with private lessees. Cities also have the constitutional power under California Constitution, article XI, section 7, "to make and enforce within its limits all local police, sanitary, and other ordinances and regulations not in conflict with general laws."

Q: If a city leases its extraterritorial property to a private business, does the county zoning come back?
A: It depends on the use. The AG split the question: if the private lessee's use primarily serves the city's public purposes (the lessee is operating as an agent of the city), the lessee is exempt from county zoning, just as the city would be. If the lessee's use primarily serves the lessee's private commercial interests, the county's zoning applies. Courts and the AG have to look at the substance of the lease, not just the labels.

Q: How is "primarily serves the city's public purposes" measured?
A: The AG cited a 1985 opinion that adopted a multistate framework: "When state owned property is leased to private individuals or associations in order for the lessee to use it for public purposes, the user is clothed with immunity to the same extent that the state would have if it were the operator. When, however, state owned property is leased to another for the latter's private purposes, it is not immune from local zoning regulations. . . . The important question is whether the use is a public use, one which is for the public benefit, which is being conducted by the state or on its behalf." A water-supply contractor running a pump station for the city would likely qualify; a private retailer paying market rent to operate a store on city land would not.

Q: What if the city wants to override its exemption and let the county regulate?
A: The city can do that voluntarily through ordinance or contract. Section 53090's structure protects the city from being subject to county regulation against its will, but does not prevent the city from agreeing to follow county standards or applying its own equivalent rules. Many cities adopt their own zoning for outlying parcels for reasons of consistency or community relations.

Q: Does this analysis apply to a county-owned property inside a city's limits?
A: Yes: symmetrically. Court of Appeal cases like Zack v. Marin Emergency Radio Authority and Akins v. County of Sonoma have applied the same principle to a county exempt from city ordinances. The structure protects both directions of the city/county relationship from each other's regulations.

Background and statutory framework

The framework starts with Hall v. City of Taft, 47 Cal.2d 177 (1956). The City of Taft tried to require a school district to comply with the city's building regulations for a new school building. The Supreme Court held that the school district, as an "agency of the state for the local operation of the state school system," was not subject to local regulation absent constitutional or legislative consent. The Court framed the rule as a presumption: state agencies are not bound by local regulation unless the Constitution or the Legislature has said they are.

The Legislature studied the Hall decision and concluded that, left unchecked, it would prevent cities and counties from effectively regulating most public construction within their boundaries. So the Legislature enacted Government Code section 53090 et seq., titled "Regulation of Local Agencies by Counties and Cities." Section 53091, subdivision (a), generally requires every "local agency" to "comply with all applicable building ordinances and zoning ordinances of the county or city in which the territory of the local agency is situated."

The crucial drafting choice was in the definition. Section 53090 defines "local agency" as "an agency of the state for the local performance of governmental or proprietary function within limited boundaries [but which] does not include the state, a city, [or] a county. . . ." That exclusion preserves the pre-Hall regulatory balance between cities and counties: the Hall presumption (state and its agencies are not subject to local regulation absent legislative consent) continues to apply to cities and counties as against each other. Each remains an "agency of the state" carrying out governmental functions; each retains its immunity from the other's local regulations.

The case law has applied this in both directions over the years:

• Akins v. County of Sonoma, 67 Cal.2d 185 (1967): a county fairgrounds inside a city was held exempt from the city's building code.
• Lawler v. City of Redding, 7 Cal.App.4th 778 (1992): a city sports complex in unincorporated county territory was exempt from the county's zoning regulations.
• Zack v. Marin Emergency Radio Authority, 118 Cal.App.4th 617 (2004): a county was exempt from a city ordinance.

For Question 2 (whether the city's exemption is conditional on the city applying its own ordinances), the AG noted that nothing in section 53090 or in the constitutional structure imposes such a condition. The court generally avoids constructions that add unstated requirements (People v. Leal, 33 Cal.4th 999, 1008 (2004); Code Civ. Proc., § 1858). Still, statewide building standards apply throughout California under the State Building Standards Law, so the city's extraterritorial parcel must meet the California Building Standards Code regardless of whether the city imposes its own zoning rules.

For Question 3 (whether a private lessee shares the exemption), the AG relied on a prior 1985 AG opinion (68 Ops.Cal.Atty.Gen. 114) and the multistate framework it surveyed. The dividing line is whether the lessee's use primarily serves the public entity's purposes (lessee is treated as an agent or arm of the city) or the lessee's private interests (lessee is on its own and county zoning applies).

Citations and references

Statutes and constitutional provisions:

• California Constitution, article XI, section 7 (city's police-power authority)
• Government Code section 37351 (cities may own real property inside or outside city limits)
• Government Code section 53090 (definition of "local agency" excluding cities and counties)
• Government Code section 53091, subdivision (a) (general requirement that local agencies comply with city/county ordinances)
• Government Code sections 53090-53097.5 ("Regulation of Local Agencies by Counties and Cities")
• Health & Safety Code section 18901 et seq. (State Building Standards Law)
• Health & Safety Code section 18902 (California Building Standards Code in title 24, CCR)
• Health & Safety Code sections 18938, 18941.5, 18944.5 (statewide application; local jurisdictions may adopt more restrictive standards)
• Code of Civil Procedure section 1858 (interpretive rule against adding requirements not stated)

Cases:

• Hall v. City of Taft, 47 Cal.2d 177 (1956) (foundational case: public school district as state agency exempt from city building regulations)
• Town of Atherton v. Superior Court, 159 Cal.App.2d 417 (1958) (extending Hall to public school district siting decisions vis-à-vis local zoning)
• Akins v. County of Sonoma, 67 Cal.2d 185 (1967) (county fairground in city is exempt from city building code)
• Lawler v. City of Redding, 7 Cal.App.4th 778 (1992) (city sports complex in county territory exempt from county zoning)
• Zack v. Marin Emergency Radio Authority, 118 Cal.App.4th 617 (2004) (county exempt from city ordinance)
• Great Western Shows, Inc. v. County of Los Angeles, 27 Cal.4th 853 (2002) (statutory power to regulate extraterritorial property)
• IT Corp. v. Solano County Bd. of Supervisors, 1 Cal.4th 81 (1991) (Legislature's intent to retain maximum local control over zoning)
• Miller v. Board of Public Works, 195 Cal. 477 (1925) (zoning as exercise of police power)
• People v. Leal, 33 Cal.4th 999 (2004) (interpretive principle: do not add rules not stated)
• International Assn. of Plumbing etc. Officials v. California Building Stds. Com., 55 Cal.App.4th 245 (1997) (statewide application of California Building Standards Code)

Prior AG opinion:

• 68 Ops.Cal.Atty.Gen. 114 (1985) (private lessee's exemption from local zoning depends on whether use primarily serves the public lessor's purposes)

Source

• Landing page: https://oag.ca.gov/opinions/yearly-index
• Original PDF: https://oag.ca.gov/system/files/opinions/pdfs/14-403_2.pdf

Original opinion text

TO BE PUBLISHED IN THE OFFICIAL REPORTS
OFFICE OF THE ATTORNEY GENERAL
State of California
XAVIER BECERRA
Attorney General

OPINION
of
XAVIER BECERRA
Attorney General
MARC J. NOLAN
Deputy Attorney General

No. 14-403
December 6, 2018

THE HONORABLE KATHARINE L. ELLIOTT, MENDOCINO COUNTY COUNSEL, has requested an opinion on the following questions:

1. Where a city owns real property in an unincorporated area of a county and uses that property for city purposes, is the city's extraterritorial property exempt from the county's building and zoning ordinances?
2. Is such an exemption conditional on the city applying its own building and zoning ordinances to its extraterritorial property?
3. If a city leases extraterritorial property to a private party, may any exemption be extended to the lessee?

CONCLUSIONS

1. Where a city owns real property in an unincorporated area of a county and the city itself uses that property for any activity the city is empowered to undertake, the city's extraterritorial property is not required to comply with the county's building and zoning ordinances.
2. The city's freedom from county building and zoning ordinances is not conditional on the city applying its own building and zoning ordinances to its extraterritorial property, but the city must ensure that any buildings on the property comply with state law, including the California Building Standards Code.
3. If a city leases extraterritorial property to a private party, the freedom from the county's building and zoning ordinances available to the city may be extended to the lessee if the lessee's use of the property serves a primarily public, rather than private, purpose.

ANALYSIS

California cities "may own and control real estate situated inside or outside the city limits as is necessary or proper for municipal purposes" (Gov. Code, § 37351).

We are informed that, in 1993, an incorporated city acquired some real property, outside the city limits, in an unincorporated area of its surrounding county. When it acquired the property, the city assumed an existing lease that covered a portion of the property, thereby becoming a lessor to the private business that was operating, and continues to operate, there. It is within this context that we have been asked to determine whether and under what circumstances a city and its private lessee may be exempt from the county's building and zoning ordinances.

Question 1. We first consider as a general matter whether a city's extraterritorial property that the city itself uses for any city purpose is required to comply with county building and zoning ordinances. We conclude that it is not required to comply with those ordinances.

In Hall v. City of Taft, the California Supreme Court held that a city cannot require a public school district, as an "agency of the state," to comply with city building regulations. The court reasoned that "[s]chool districts are agencies of the state for the local operation of the state school system," and in carrying out its authorized activities, a state entity "is not subject to local regulations unless the Constitution says it is or the Legislature has consented to such regulation." Thereafter, relying on Hall, the Court of Appeal in Town of Atherton v. Superior Court held that public school districts are also exempt from local zoning ordinances that would affect the location of school sites. After Hall, the Legislature undertook a study to examine the effect of the decision on the ability of cities and counties to effectively zone and regulate building within their respective limits. That study led to the enactment of Government Code section 53090 et seq., which forms an article of the Government Code entitled "Regulation of Local Agencies by Counties and Cities."

One provision of this statutory scheme — Government Code section 53091, subdivision (a) — generally requires each "local agency" to "comply with all applicable building ordinances and zoning ordinances of the county or city in which the territory of the local agency is situated." Another provision — Government Code section 53090 — defines "local agency" somewhat narrowly as "an agency of the state for the local performance of governmental or proprietary function within limited boundaries [but which] does not include the state, a city, [or] a county. . . ." In other words, by excluding cities and counties from section 53090's definition of "local agency," the Legislature did not change the balance of regulatory authority between cities and counties.

We therefore conclude that where a city owns real property in an unincorporated area of a county and itself uses that property for city purposes, the city's extraterritorial property is not subject to the county's building and zoning ordinances.

Question 2. The second question asks whether a city's freedom from county zoning regulations is conditional on the city applying its own building and zoning ordinances to its extraterritorial property. We note that neither underlying constitutional principles nor the statute itself imposes such a condition. Generally, we are to avoid a construction that adds rules not stated, and we see no reason to depart from that principle here.

In the absence of controlling county requirements, a city is free to apply its own rules (provided they don't conflict with mandatory state requirements). In general, a city has power conferred by the California Constitution "to make and enforce within its limits all local police, sanitary, and other ordinances and regulations not in conflict with general laws" (Cal. Const., art. XI, § 7). As for city-owned extraterritorial property, a city has statutory power to regulate uses of the property, and may exercise its power through ordinances, contractual agreements with private parties, or a combination of the two.

That is not to say that a city project is not subject to building standards at all. The State Building Standards Law applies to buildings throughout the state (although local jurisdictions may adopt more restrictive standards where warranted). Therefore a city's extraterritorial properties would be subject to the California Building Standards Code.

Accordingly, we conclude that an exemption under section 53090 is not conditional on the city applying its own building and zoning ordinances to its extraterritorial property, but buildings on that property are subject to the California Building Standards Code.

Question 3. The third question is whether a private party leasing extraterritorial property from a city is also exempt from county building and zoning ordinances, that is, whether the city's section 53090 exemption may be extended to its private lessee. We believe the answer depends on whether the lessee's use of the property primarily serves the city's purposes — that is, whether the lessee should be viewed as if it were an agent or an arm of the city in its use of the property.

In a 1985 opinion, we addressed the question whether a state agency's section 53090 exemption from local building and zoning regulations may be extended to its private lessee, who proposed to develop the state-owned property. We concluded that the lessee is exempt if the lease serves the state agency's public purposes — but that the lessee is not exempt if the purpose of the lease is to serve the lessee's private interests.

In reaching our conclusion, we relied on the reasoning articulated in a number of cases from other states, summarized as follows: "When state owned property is leased to private individuals or associations in order for the lessee to use it for public purposes, the user is clothed with immunity to the same extent that the state would have if it were the operator. When, however, state owned property is leased to another for the latter's private purposes, it is not immune from local zoning regulations. . . . The important question is whether the use is a public use, one which is for the public benefit, which is being conducted by the state or on its behalf. . . ."

We therefore conclude that a city's private lessee is exempt under section 53090, provided that the lessee's use of the property primarily serves the city's public purposes, but that it is not exempt where the lessee's use of the property primarily serves the lessee's private interests.