In his latest effort to flex the state’s muscles over homebuilding, Gov. Gavin Newsom announced Friday that California was suing an Orange County city over what he said was its failure to allow enough new homebuilding to accommodate a growing population.
The lawsuit accuses Huntington Beach of defying a state law that requires cities and counties to set aside sufficient land for housing development. Newsom said the suit, scheduled to be filed Friday in Orange County Superior Court, was needed to address rising housing costs that threaten economic growth and deepen inequality.
The case against Huntington Beach is a rare legal action by the state against a local government over housing laws. In 2009, when former Gov. Jerry Brown was attorney general, the state intervened in a lawsuit against the Bay Area city of Pleasanton, where voters capped the amount of housing allowed. The case ended with Pleasanton getting rid of its cap, zoning for more homes and owing about $4 million in attorney’s fees.
“Many cities are taking herculean efforts to meet this crisis head on,” Newsom said in a statement. “But some cities are refusing to do their part to address this crisis and willfully stand in violation of California law. Those cities will be held to account.”
Although cities and counties do not build homes, local restrictions on development, such as high fees or a lack of land zoned for residential use, can prevent construction that might otherwise occur. Higher-income coastal communities, including Huntington Beach, often maintain some of the tightest development rules in the state, even as housing costs have soared over the last decade.
The median home value in the beach city of 200,000 people tops $834,000, according to real estate website Zillow. Over half of Huntington Beach’s tenants are rent-burdened, meaning they spend more than 30% of their income on housing, U.S. Census data show.
For more than three years, Huntington Beach has ignored the state law aimed at encouraging housing production.
In 2015, its City Council reduced the amount of housing allowed under zoning codes along two major streets by more than 2,000 homes. Residents had complained that the city was growing too quickly and took aim at plans that allowed for apartment and condominium development.
“We want to reclaim our town," resident Lilli Wells said at the 2015 council meeting, according to the Orange County Register. "We want to keep the culture and flavor of our community."
The decision meant the city no longer had enough land zoned to accommodate low-income residents under state requirements, prompting a lawsuit from affordable housing activists. An appellate court ruled in Huntington Beach’s favor because it’s one of a small number of California cities organized under rules that give it sweeping authority over its own practices, including land-use policies. The city has yet to pass a new plan to comply with the state zoning requirements.
The lawsuit is another sign the governor sees local policies restricting growth as a major cause of the state’s affordability problems, and the administration has not ruled out filing similar lawsuits against other cities. Over the last decade, millions of new jobs have been created in California, but home production hasn’t kept pace, exacerbating an imbalance between the supply of available homes and demand.
Newsom has threatened to withhold state transportation dollars from cities and counties that reject development while also allocating $1.3 billion in his budget proposal as incentive for local governments to accommodate growth and homeless services.