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State Gets Serious with Norwalk over Housing Noncompliance
Led by HCD's Housing Accountability Unit, the state has filed a lawsuit against the city of Norwalk, claiming that its moratorium on new homeless shelters and supportive housing violates multiple housing laws. In August, Norwalk’s City Council imposed the ban, citing concerns over budget strains and disorder due to homeless projects in the area. Governor Gavin Newsom and Attorney General Rob Bonta argue that the ordinance is unlawful and discriminatory, with Bonta criticizing the city's inclusion of homeless shelters alongside businesses like payday lenders and liquor stores. In addition, Norwalk has yet to meet its housing goals . The city has only issued permits for 175 units during this housing element cycle, a mere 3.5% of its 5,034 unit Regional Housing Needs Allocation. On October 3, in response to the city’s failure to repeal the ban, the state announced that it was decertifying the City of Norwalk’s housing element. The state’s action makes the city ineligible for significant housing and homelessness funding and means the city can no longer deny permits to “builder’s remedy” affordable housing projects.
Wildfire Concerns Prompt Anaheim to Reject Housing Development
Anaheim’s city council voted 5-2 to reject a proposed 500-unit luxury apartment development in Deer Canyon, citing concerns about the potential impact on wildfire evacuation times and safety in a high-risk fire zone. The fire department, including the fire chief, advised against the project, pointing out the challenges of evacuations in the area, although the developer argued that the project would enhance fire resilience. Many residents, especially those who had experienced previous evacuations, expressed concerns about adding more people and vehicles to a region with limited evacuation routes. Supporters of the project, including labor unions and the developer, emphasized the urgent need for new housing to address California’s housing shortage, while also asserting that the development could help improve fire safety. In response to the council’s decision, the developer has indicated they may pursue a "builder's remedy," a state law that could allow for a larger development with affordable housing units, bypassing the city’s approval.
Judge Strikes Down San Francisco Vacancy Tax
A San Francisco judge ruled against a voter-approved tax on vacant apartment units, which was designed to increase housing availability in the city. The measure, passed in November 2022 with 54% support, would have imposed taxes on property owners with vacant units for more than 182 days a year, starting at $2,500 per unit and rising up to $20,000 annually. City officials estimated the tax could generate over $20 million yearly to fund affordable housing and potentially release nearly 5,000 units for rent. However, property owners, led by the San Francisco Apartment Association, argued that the tax violated their property rights and was an unconstitutional confiscation of their property. Judge Charles Haines ruled in favor of the property owners, striking down the measure, but did not provide a detailed explanation for the decision. (See related CP&DR coverage.)
State Settles Housing Dispute with La Habra Heights
The state reached a settlement with the Orange County city of La Habra Heights, requiring the city to adopt a housing plan by July 7, 2025, to allow for the development of 244 housing units, including 164 affordable units. The settlement follows La Habra Heights’ failure to update its housing plan on time and adequately address its Regional Housing Needs Allocation target, which had been raised by 72 units due to past deficiencies. The agreement also stipulates that the city must ensure public participation and may face penalties if it remains noncompliant. The housing element is part of California’s broader effort to address the housing crisis and ensure that all communities, regardless of size, contribute to meeting the state's housing needs. Once the housing plan is adopted, the city will have to make land available for multifamily and affordable housing, helping to reduce homelessness and promote equity.
CP&DR Coverage: Fulton on the New Debates over Exactions
Six months after it came, the U.S. Supreme Court’s ruling in the Sheetz case is beginning to have an impact on land use planning in California. Unfortunately, the court didn’t say what California jurisdictions should do instead, which led to a wide variety of interpretations. The big question is whether California’s method of calculating fees – essentially by using an average – conforms to the Sheetz ruling. But are averages okay? Or must cities and counties actually engage in what the Supreme Court has called an ‘individualized determination” for, say, every single home or building in the entire jurisdiction – a huge departure from the past practice of averaging?
Quick Hits & Updates
The Los Angeles City Council eliminated a rule that allows landlords to evict tenants under the "substantial remodel" exemption within the city's "just cause" eviction regulations. Tenant advocates argue that this exemption has been used to evict long-term renters and raise rents, while landlords claim the change could hinder necessary property improvements. The council's decision, which passed unanimously, instructs the Housing Department and city attorney to draft new rules ensuring tenants can remain in their apartments during remodels, similar to protections already in place for rent-controlled units.
The Sacramento City Council adopted the Stockton Boulevard Plan, which aims to promote economic sustainability, housing development and transportation improvements along a major corridor southeast of downtown. The plan focuses on mixed-use development, affordable housing, community services and enhancing pedestrian and biking infrastructure, with efforts to protect and support the local community, particularly Black, Indigenous and people of color residents.
Plans for a new 72-story residential skyscraper at 524-530 Howard Street in San Francisco’s SoMa district have been approved, thanks to Assembly Bill 2011, which streamlines the conversion of commercial properties into housing. The tower, which could become the city's tallest residential building, will include 672 apartments, with 68 affordable units, along with space for parking and bicycles and a pedestrian bridge connecting to the Transbay Transit Center's rooftop park.
A new report from Hilgard Analytics and Zenith Economics reveals a significant decline in residential permitting in Los Angeles, with only 6,907 units approved from January to September 2024, a 30.7% drop compared to the same period in 2023. Factors such as high interest rates, disincentives from Measure ULA, local housing policies and uncertainty surrounding Proposition 33 have contributed to the decline, though some areas in the San Fernando Valley have seen an increase in housing construction.
The San Diego Association of Governments will allocate up to $45 million for public infrastructure projects through its Smart Growth Incentive Program, with a focus on climate action, planning and capital improvements. The funding, sourced from the county's TransNet sales tax, will support initiatives such as streetscaping, transportation enhancements and urban improvements, with projects expected to be completed by 2029.
Developers have long sought to establish a sand and gravel quarry on Sargent Ranch, a 6,500-acre site near Gilroy, but recent developments have led to a significant preservation effort. The Peninsula Open Space Trust purchased 1,340 acres of the property for $15.6 million, designating it as open space, while ongoing plans for the quarry face continued opposition from environmental groups and local communities, raising questions about the future of the remaining land.
Plans for a 1.7-mile people mover connecting Los Angeles Metro's Crenshaw Line to SoFi Stadium and Intuit Dome have been jeopardized after South Bay cities rejected a request for an additional $493 million in funding, threatening $1 billion in federal support. The project, initially backed by the Rams and Clippers and Congresswoman Maxine Waters, has faced growing opposition due to rising costs, design changes impacting nearby properties and concerns over potential disruptions to local businesses during construction, leading to uncertainty about its viability before the 2028 Olympics.
The Milken Institute's report on the "best performing cities" in 2024 finds that, despite ongoing inflation and rising interest rates, the U.S. economy continues to grow, with metropolitan areas playing a central role in this expansion. But, four of the five cities experiencing the largest drops in performance are in California. In 2022, over 6 million jobs were added across the US, with 90.7 percent located in metropolitan areas, but some major California metros, such as Los Angeles and Modesto, have seen slower job and wage growth and population decline, while areas in Texas and the Sunbelt have flourished.
Sacramento State University plans to replace Hornet Stadium with a new facility designed to host over 25,000 attendees, aiming to enhance its athletic programs and community events while potentially supporting a future move to the Pac-12 conference. Funding for the project has been secured from various sources and construction is expected to take four years, with more details to be announced soon.
The Sacramento City Council unanimously approved the American River One housing project, which plans to include nearly 800 residential units and commercial space, despite two appeals challenging its environmental review. The Save the American River Association is pursuing litigation for a full environmental impact report, citing concerns about the project's proximity to the American River, while the construction workers' union LIUNA Local 185 raised issues about worker safety and habitat impacts. Settlement discussions are underway, but no trial date has been scheduled and project representatives have not indicated when construction might begin.
