Housing Litigation by California Attorney General Yields Results

"Huntington Beach and California reached a tentative settlement of the state’s first-ever lawsuit accusing a city of ignoring state affordable housing requirements," reports Jeff Collins, who covers housing and real estate for the Orange County Register and Southern California News Group. [Also see posts here and here on the landmark lawsuit filed at the behest of Gov. Gavin Newsom in his third week in office just over a year ago.]

In a letter sent Friday, Jan. 10, the California Department of Housing and Community Development [HCD] said a proposed amendment to the city’s housing plans “meets the statutory requirements” of the state law requiring cities and counties to plan for housing at all income levels.

The settlement is contingent on the city adopting the proposed revisions by March.

Legislative carrot and stick

The HCD letter is referring to housing element law [pdf], adopted in 1969, and its core planning tool: the Regional Housing Needs Assessment (RHNA) process, considered by some experts to be inherently flawed, resulting in underproduction of both affordable and market-rate housing. 

Flawed or not, a certified housing element is a requirement for the state's 539 cities and counties to show that they have adequately planned to meet the housing needs of everyone in the community. [See HCD's "Housing Element Compliance Report" (pdf) as of Jan. 3, 2020. Huntington Beach is listed under Orange County on pg. 9 of 15, showing its status as "in review."]

The state lawsuit was enabled by the passage of Assembly Bill 72 by Assemblymember Miguel Santiago (D-Los Angeles), signed by former Gov. Jerry Brown as part of a historic 15 housing-bill package in September 2017 to address the state's housing crisis. Collins described several of those bills for the Orange County Register:

• AB 72: Puts teeth in California’s 48-year-old “housing element law,” which requires local governments to adequately plan for future housing needs at all income levels. The bill allows the state Housing and Community Development Department to refer violations to the state Attorney General’s Office for enforcement.

"That’s why I authored and passed AB 72 in 2017, to shine a light on cities and counties that dig their heels in and refuse to meet their housing goals," stated Santiago on Jan. 25, 2019, the day that Attorney General Xavier Becerra filed suit against Huntington Beach.

If AB 72 was the stick, another 2017 housing law was the carrot

"For years, Huntington Beach argued that as a charter city it has greater autonomy over zoning issues like those in the state’s affordable housing law," adds Collins in the source article in the Los Angeles Daily News on Jan. 13. Huntington Beach City Manager Oliver Chi issued a statement on Jan 10 "promising the city planning commission will consider the proposed amendment at its meeting Tuesday, Jan. 14, and the city council will review it in February."

But the city manager’s statement implies Huntington Beach decided to reverse that stance [referring to its autonomy as a charter city] after learning it can’t get state grants for homeless response programs until it has an approved housing plan.

“After review, it was identified that to comply with state regulations, the city’s … housing element would have to be updated in order to access (homeless response) funding,” City Manager Chi’s statement said. “On Nov. 4, the city council directed that staff prepare the requisite housing element amendments.”

The homeless response funding was generated by another one of those 15 housing bills approved on the final day of the 2017 legislative season: Senate Bill 2 by Sen. Toni Atkins (D-San Diego) which "raises about $200 million to $300 million annually for affordable housing by tacking a $75 fee onto every real estate document filed with a county recorder’s office, up to a maximum of $225 per transaction," according to Collins. Also, see HCD's "California's 2017 Housing Package." 

Housing element de-certified in 2015 due to specific plan amendments

"The city’s 2013-21 housing element was certified in October 2013, but the state de-certified it after the city made amendments to the Beach and Edinger Corridors Specific Plan [pdf] in May 2015," according to Julia Sclafani who reported on the planning commission's meeting for the Daily Pilot.

"Those changes reduced the cap on new residential development from 4,500 units to 2,100 and imposed stricter height and setback requirements."

The amendments meant the city no longer had enough land zoned to accommodate low-income residents under state requirements.

Planning Commission approval

On Jan. 14, the Planning Commission voted 6-1 "to adopt the amended general plan housing element for 2013-21 and pursue certification from the California Department of Housing and Community Development."

Commission Vice Chairman Alan Ray said he would "reluctantly" support the plan "because I feel the pros outweigh the cons," adds Sclafani, confirming the aforementioned statement by City Manager Chi.

“Certainly one of the cons to approving it would be, in my view, ceding some local control to the state. And normally that would be something that I’m against,” Ray said. On the flip side, he said being in compliance with state law and benefiting from state funds for homeless services would make the approval worthwhile.

Huntington Beach missed out on up to $625,000 in funds for affordable housing in 2019. Going forward, it would be eligible for $481,000 per year from SB 2 funds.

Zachary Olmstead, a deputy director with HCD, referenced the specific plan in his Jan. 10 letter [pdf] to the city's Department of Community Development, noting that the changes made to the specific plan would "accommodate the Regional Housing Needs Allocation (RHNA) shortfall of 413 lower-income units and removes governmental constrictions to the development of housing."

Should the Huntington Beach City Council approve the planning commission's decision, "the central issue in the state’s lawsuit will be resolved, said Russ Heimerich, a spokesman with the California Business, Consumer Services and Housing Agency," writes Liam Dillon, housing reporter for the Times, in an earlier article. 

Huntington Beach vs. California

A week before Becerra filed the AB 72 lawsuit, Huntington Beach filed suit against the state over yet another 2017 law, seeking to overturn Senate Bill 35 by Sen. Scott Wiener (D-San Francisco), which authorizes a streamlined approval process for affordable housing. Two more lawsuits, challenging housing laws passed in 2018 and 2019, are also possible, reported Priscella Vega for the Daily Pilot in September.

• Before SB 1333 [by Senator Bob Wieckowski (D-Fremont) charter cities were allowed to opt out of some state housing mandates as long as they had a planning commission, complied with a general housing plan, reported to the state Department of Housing and Community Development and provided low- and moderate-income housing in the coastal zone. The new bill, approved by the governor in September 2018, requires all 121 charter cities [pdf] to comply with state housing laws.

• AB 101, approved by the governor in July, requires the attorney general to request a court order telling any cities in violation, including charter cities, to bring their housing plans into compliance with specified provisions. The bill also requires a status conference with cities that haven’t complied with the order. Cities that continue to defy the order could be fined.

“These lawsuits, like the other lawsuits we filed against the state, are about asserting the city’s constitutionally protected charter city authority to zone and plan for housing at the local level,” City Attorney Michael Gates told Vega.

The same issue, the status of charter cities and compliance with housing laws, will be heard by the California Court of Appeal for the First District in San Francisco. AG Becerra filed to intervene in a San Mateo County lawsuit on the applicability of the Housing Accountability Act on Jan. 14.

One of Huntington Beach's numerous lawsuits against the state, though not on the topic of housing, was resolved on Jan. 10 when a "three-justice panel of the state’s 4th District Court of Appeal overturned an Orange County Superior Court judge’s ruling siding with Huntington Beach in its lawsuit challenging California’s so-called sanctuary state law [SB 54]," reported Sclafani on Jan. 10.

The justices said the state law is constitutional “as applied to charter cities because it addresses matters of statewide concern, including public safety and health, effective policing and protection of constitutional rights,” Associate Justice Richard Fybel wrote in the opinion, with Justices Raymond Ikola and Thomas Goethals concurring.

It will be interesting to see if housing is viewed similarly by the courts. 

Related in Planetizen:

• Are Charter Cities Subject to California's Housing Laws? January 24, 2020
• Opinion: Regional Planning Fails the Needs of Southern California's Housing Crisis, October 28, 2019,
• Housing Threats Dialed Down in California, March 14, 2019
• Huntington Beach Sues California Over 2017 By-Right Affordable Housing Bill, January 31, 2019
• New California Governor Follows Up Tough Housing Rhetoric with Action, January 30, 2019
• California Sues Huntington Beach for Lack of Housing Development, January 27, 2019
• California's 15 Housing Bills Won't Do Enough, October 2, 2017

Hat tip to Ethan Elkind.