Capitol Alert

Gavin Newsom takes wealthy Southern California city to court over its lack of housing

California Gov. Gavin Newsom is giving teeth to his efforts to build more housing in California by suing a city that he argues isn’t allowing enough low-income housing, as required by state law.

Newsom announced that Attorney General Xavier Becerra is suing Huntington Beach, a coastal city in Orange County, to compel it to support construction of more affordable apartments and houses.

California law requires communities to plan for housing at all income levels. If the state finds those plans won’t allow for enough housing, communities are required to revise them.

“The huge housing costs and sky-high rents are eroding quality of life for families across this state,” Newsom said in a statement. “California’s housing crisis is an existential threat to our state’s future.”

The state’s housing department found Huntington Beach out of compliance with state law in 2015, and the Newsom administration alleges the city hasn’t since acted to approve enough land for low-income units.

Although the city approved a housing plan in 2013 that met state standards, the city council altered the document two years later in a manner that reduced the number of housing units that could be built in the city, the lawsuit alleges. Newsom argues that effectively prevented construction of enough affordable units to comply with state law.

The city proposed fixes to its plan that would have solved the problem, but didn’t implement them, the lawsuit argues.

“The time for empty promises has come to an end,” the state argues in the lawsuit. “The City should not be allowed to avoid its statutory obligations any longer.”

Huntington Beach’s attorney Michael Gates said the governor’s office is wrong. He says the city has been complying with the state’s housing laws and working with the Housing and Community Development Department.

“This lawsuit by the State is timed poorly,” Gates said in a written statement. “Now instead of making progress in discussions and negotiations, good productive communications with HCD representatives will be cut off.”

Gates said Huntington Beach has prevailed in court on this issue before, citing a lawsuit by a Southern California affordable-housing advocacy group that argued Huntington Beach wasn’t complying with the state’s housing laws. The California Supreme Court declined to review that case last year.

The city’s median household income was $88,000 in 2017, according to the Census. The median household income in the U.S. that year was $60,300, according to the Federal Reserve.

Zillow estimates the median value of a house in the city is $837,500.

State officials say dozens of other California cities are out of compliance with the housing law at the center of the Huntington Beach lawsuit. They range from Atwater in Merced County, where a federal prison is the main employer, to Pismo Beach, a resort town on the Central Coast. The list also includes several lower-income San Joaquin Valley communities, such as Orange Cove and Selma.

The governor’s office says the suit is the first filed under a new law that took effect Jan. 1, 2018. That law, AB72, gives the state’s housing agency more power to refer cities that break housing laws to the attorney general.

Lawmakers who supported the law applauded the governor’s Friday announcement. Assemblyman Miguel Santiago, a Los Angeles Democrat who authored the bill, called the legal action “an important first step in alleviating a housing crisis that threatens our way of life.”

Republican Assemblyman Tyler Diep, who represents Huntington Beach, criticized the lawsuit.

“I recognize that there is a housing shortage, but this problem is not exclusive to Huntington Beach,” he said in a statement.

Newsom hinted that he may take action against other cities that fail to approve state-required housing.

“Some cities are refusing to do their part to address this crisis and willfully stand in violation of California law,” he said. “Those cities will be held to account.”

In his first budget proposal, Newsom slated hundreds of millions of dollars to help communities plan for more housing. He’s also proposed giving the state’s housing department more power to enforce those plans and withholding transportation funding from cities that aren’t building enough housing.

He’s also proposed more money for developer loans to building moderate-income housing and an expansion of the state’s housing tax credit program.

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