Previously, we wrote about California’s new Governor, Gavin Newsom, and his plan to deny transportation fund revenue to local governments that fail to meet their housing production goals. It’s a bold plan, but because it’s part of the budget, it could easily be watered down or die outright in the legislature.
But for now, the Governor has announced a lawsuit against the city of Huntington Beach for failing to meet housing goals required under California law. From the Governor’s press release:
The Governor approved legal action against the City of Huntington Beach for willfully refusing to comply with state housing law, even after extensive attempts to offer partnership and support from the California Department of Housing and Community Development. The Attorney General will file suit against the city [Friday, January 24th.]…
In 2015, the Department of Housing and Community Development, the agency charged with tracking cities’ progress in meeting these housing goals, found Huntington Beach’s housing plan was out of compliance with state law. After adopting a plan that met state standards in 2013, the city amended their housing plan and significantly reduced the number of new housing units able to be built — moving the city out of compliance with state housing law. Despite the Department of Housing and Community Development’s repeated efforts to work with Huntington Beach to bring its housing plan into compliance, the city council ultimately rejected a proposed amendment to build additional units.
For context, California municipalities must submit general plans that determine how cities plan to meet their projected housing needs (the assumptions for doing so were updated by Scott Wiener’s SB 828). California AB 72, which went into effect in 2018, allowed the state to revoke a housing plan and notify the Attorney General of noncompliance. This lawsuit will be the first of its kind under AB 72.
When outright deregulation of the housing market fails (as it did when SB 827 died in committee), states and the federal government can offer a combination of carrots and sticks for local governments to increase housing supply. Governor Newsom is using one of the big sticks available to him, and he’s not speaking softly.