California Forever Submits Text of Ballot Measure to Solano County
California Forever, the development group funded by tech billionaires with plans to build a new city in Solano County, submitted a ballot initiative seeking an exemption from the county's Orderly Growth ordinance, which restricts development in the largely rural county. The plan includes the construction tens of thousands of "middle-class" homes, parks, bike lanes and a solar farm. The project, aimed at being walkable, integrated and eco-friendly, faces skepticism due to its secretive origins and the need for approval from Solano County voters. The proposed city, located north of Rio Vista, could eventually house 400,000 residents, with initial development targeting 50,000 residents by 2026. The ballot initiative promises legally binding guarantees on jobs, down payment assistance and funding for mixed-use projects. However, opposition comes from ranchers, environmentalists and locals concerned about its impact on agriculture, real estate prices and existing infrastructure. The initiative includes a number of commitments, such as funding highway improvements and increasing the buffer zone around Travis Air Force Base. If approved, the measure would appear on the November ballot. (See related CP&DR coverage.)
Judges Allow Housing Lawsuit Against Huntington Beach to Proceed
The state's lawsuit against Huntington Beach, California, accusing the city of violating state laws to address the housing crisis, is back on track after being temporarily halted in November. A three-judge panel at California's 4th Circuit Court of Appeal ruled that Huntington Beach's status as a charter city does not prevent the state from seeking an expedited hearing on its lawsuit. The lawsuit, led by Attorney General Rob Bonta and Governor Gavin Newsom, alleges that the city violated state law by rejecting a plan to provide enough housing for expected population growth. The decision allows the case to continue expedited proceedings, unless the city persuades the courts to halt the lawsuit for other reasons. The lawsuit targets Huntington Beach's refusal to comply with state laws addressing the housing crisis, and the city previously sought protection in federal court, claiming violations of its constitutional rights. (See related CP&DR coverage.)
Cupertino Reaches Settlement with Housing Advocates over Noncompliant Housing Element
Housing advocates, represented by YIMBY Law and the California Housing Defense Fund, reached a settlement with Cupertino after lawsuits were filed against it and several other Bay Area jurisdictions for missing the state deadline for housing elements. As part of the settlement, Cupertino will revise its housing plans in compliance with state law and abide by the "builder's remedy," allowing developers to push larger projects through an expedited approvals process. Cupertino must approve 4,588 new homes by 2031, with 1,880 designated for low-income households. The settlement aims to speed up the adoption of a compliant housing element, with Cupertino's Deputy City Manager expressing a commitment to responsible development. While some council members support the settlement for expediting the process, others criticize it, citing concerns about a bypass of environmental review laws and blaming the city's consultants for delays.
San Diego Adopts Citywide Housing Reforms
The San Diego City Council approved Mayor Todd Gloria's Housing Action Package (HAP) 2.0, part of the Homes for All of Us initiative, aimed at addressing the city's affordable housing challenges. The reforms include amendments to the Land Development Code to preserve existing affordable homes and encourage the construction of new ones, with a focus on protecting vulnerable community members such as those experiencing homelessness, people with disabilities and seniors. The package introduces incentives for various housing options, including single-room occupancy homes for the very-low-income level, affordable student homes near transit and accessible accessory dwelling units (ADUs) for seniors and people with disabilities. It also allows public agencies greater flexibility in developing homes on publicly owned land, addresses environmental justice concerns and promotes the preservation of affordable homes while preventing displacement. Additionally, the reforms implement flexible parking requirements, encourage developments in underused areas near transit and streamline regulations to build family homes in areas with good schools and job opportunities. The HAP 2.0 package is set to return to the City Council for a second reading in early January before reaching the mayor's desk for approval.
CP&DR Coverage: Supreme Court May Updend Cities' Ability to Impose Exactions
Based on oral argument last week in a case from El Dorado County, the U.S. Supreme Court seems ready to strike down California’s Ehrlich/San Remo exception to the Nollan/Dolan rule on exactions – an exception that allows California cities and counties to impose exactions that do not have a “direct connection” to the project in question and that are not “roughly proportional” to the project’s impact if they are part of a General Plan or broader legislative effort. The Nollan/Dolan doctrine states that development exactions – including impact fees – must have a “rational nexus” to the development project in question and also must be imposed in a manner that is “roughly proportional” to the impact of the new development on existing conditions. Exactions that do not meet this test are considered a taking of property under the Fifth Amendment to the U.S. Constitution.
Quick Hits & Updates
Average temperatures in Northern California, particularly across the Central Valley, have steadily increased over the last few decades, with winters becoming at least 2 degrees warmer. While the region is expected to experience a slight warming trend in the upcoming days, this warmer climate could potentially lead to more hazardous winter storms with sleet and freezing rain, affecting various aspects of daily life and agriculture in the area.
The Hermosa Beach City Council approved a Land Value Recapture (LVR) program, which involves rezoning areas for mixed-use development, aiming to create market-rate and moderate to low-income homes and apartments. The program includes setting LVR fees of $76 per square foot on residential developments of four or fewer units and $104 per square foot on residential developments of five or more units, with exemptions for owners selling or leasing units at county-defined "moderate to very low income" prices.
Attorney General Rob Bonta filed a civil lawsuit accusing Shangri-La Industries, a contractor with the state's Project Homekey homeless housing program, of illegally borrowing over $100 million against the projects, putting them at risk of foreclosure. Bonta demands the return of funds and asks the court to place seven properties in receivership, alleging that Shangri-La took out loans without state approval and failed to record required affordability restrictions, jeopardizing the projects' completion.
Three master-planned communities in Southern California—Ontario Ranch, Great Park Neighborhoods, and Rancho Mission Viejo—rank among the nation's 50 fastest-selling communities, according to annual rankings by new-home tracker John Burns Research and Consulting. The trio collectively sold 2,187 homes in 2023, up 70% from 2022, with Ontario Ranch ranked fifth nationally, Great Park in Irvine at 19th, and Rancho Mission Viejo at 31st.
The Hoopa Valley Tribe acquired 10,395 acres of land, including the headwaters of Pine Creek, through a $14.1 million purchase, marking the tribe's largest reacquisition of land since the establishment of the Hoopa Valley Indian Reservation in 1864. The tribe plans to restore the historic salmon run, rebuild the elk population and address environmental issues to enhance the well-being of its people on the ancestral territory.
The governor's office launched the state's first interactive website, build.ca.gov, allowing residents to track the progress of thousands of publicly funded infrastructure projects across the state. The website provides details on projects ranging from clean energy to transportation and broadband, with an interactive map, a 110-page project list and spotlight stories offering background information on each project.
San Francisco has regained compliance with state housing law, closing the window for builder's remedy applications from developers. The city passed the "constraints reduction ordinance" in December, meeting the state's standards and avoiding potential punishments for non-compliance.
Senator Aisha Wahab withdrew Senate Bill 397, which aimed to merge the Bay Area's 27 transit agencies. The bill faced opposition from regional transit agencies but signaled ongoing discussions about consolidating some of the Bay Area's numerous transit agencies as they grapple with budget deficits and ridership challenges.
A new report from UC Berkeley's Terner Center addresses the economic complexities of housing development, particularly in California, noting the impact of macroeconomic shifts like inflation and rising costs of materials and labor on construction expenses. According to the study, titled "Demystifying Development Math," policymakers and housing advocates often lack comprehension of the financial factors influencing developers' decisions.
State Farm plans to raise its average homeowner insurance policies in California by 20% next year, a move attributed to increased costs and risks, amidst challenges in the state's insurance market. The rate hike follows a period of limited new policy acceptance, driven by rising construction expenses and escalating risks from catastrophic events like wildfires.
Santa Barbara County is engaging the public to allocate space for 5,000 housing units by 2031 using the "Balancing Act" simulator, allowing users to select land parcels for housing while considering income requirements and county locations. Residents express diverse opinions on housing placement, emphasizing the importance of affordable homes and vacant properties for housing development.
