Capitol Alert

Why did Newsom bust tiny Wheatland on affordable housing? City says rules ‘don’t really fit’

What Wheatland has to say in response to criticism from Gov. Newsom

In Gov. Gavin Newsom’s State of the State address, Wheatland was called out as one of 47 cities and counties out of compliance with a California affordable-housing law. Here's what the city manager said in its defense in February 2019.
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In Gov. Gavin Newsom’s State of the State address, Wheatland was called out as one of 47 cities and counties out of compliance with a California affordable-housing law. Here's what the city manager said in its defense in February 2019.

When California’s new governor name-checked the city of Wheatland in his recent State of the State address, word “got around town pretty quick,” one local business owner said.

“We don’t get mentioned all that much, and not by the governor,” said Wayne Bishop, who owns Wheatland’s popular Bishop’s Pumpkin Farm.

The reason for Gov. Gavin Newsom’s call-out? Wheatland is one of 47 cities and counties out of compliance with a state housing law requiring municipalities to create plans to build affordable housing.

But Bishop said that in the town of roughly 3,700 people in Yuba County, California’s housing crisis is scarcely felt or discussed.

“It gave us something to laugh about,” he said. “The average man on the street has no idea what he’s talking about.”

In December 2018, the state’s department of Housing and Community Development sent the city a letter stating Wheatland had failed to submit a new “housing element,” or plan, for the department to review, which would include “documentation to establish required zoning actions have been implemented.”

“Some cities are trying, like Clovis. But others are not, like Wheatland, Huntington Park, and Montebello,” Newsom said during his speech.

Specifically, Wheatland is short 343 high-density units – which translates to about 17 acres zoned for high-density residential use with about 20 units on each acre that it’s been tasked by the state and by regional governments to produce, according to city Community Development Director Tim Raney.

But in a small, agricultural city such as Wheatland, demand for new home construction is low, and “pretty much all of the ground was spoken for” when the city updated its general plan, said Mayor Joe Henderson. The city’s existing footprint “doesn’t have 17 acres of bare land, ready to build” on and zone, said City Manager Jim Goodwin.

In his State of the State address, California Gov. Gavin Newsom acknowledged the state's housing problem. While he doesn’t intend to sue all of the cities for their failures to meet their housing obligations, he vowed to hold them all accountable.

Most Wheatland residents generally accept the lack of new construction that helps keep the town small, Henderson said. “We like being able to call our neighbor by their name and see him at the grocery store,” he said. And housing, for the most part, is relatively cheap: The city’s median home value in February 2019 is about $307,000, according to Zillow, about 44 percent cheaper than the state’s median home value.

“We’re not Huntington Beach, we’re not a town of 200,000,” Henderson said. “It seems like the requirements are a little broad and don’t really fit a rural community.”

Since 1969, California has required local governments to adequately prepare meet their communities’ housing needs by including housing elements in local general plans.

It wasn’t until Assembly Bill 72 went into effect in 2018, signed into law the previous year by Gov. Jerry Brown, that the state’s department of Housing and Community Development was able penalize municipalities for failing to comply and notify the state’s attorney general’s office of the violation.

In January, the state made its first legal move under AB 72: California sued the wealthy Orange County city of Huntington Beach for not allowing construction of enough affordable housing.

“I don’t intend to file suit against all 47, but I’m not going to preside over neglect and denial,” Newsom said during his speech. “These cities need to summon the political courage to build their fair share of housing.”

Of the 47 municipalities out of compliance, 13 jurisdictions, or about 1 in 4, have a population of less than 5,000. Russ Heimerich, a spokesman for the state Business, Consumer Services and Housing Agency, which oversees the Housing and Community Development Department, said every jurisdiction has its unique set of reasons for falling out of compliance.

“I don’t think you can paint with a broad brush,” Heimerich said. “We have resources for smaller, mainly rural governments. I don’t know that all of them are aware of those resources. ... If they need assistance, they should ask us for it.”

The department will be sending an expert to Wheatland soon to “see where they can be creative in meeting the requirements,” Heimerich said.

Wheatland hasn’t seen a major housing development since about 2000, when two subdivision developments finished construction, Raney said.

Within three years from now, between 200 and 300 new single-family homes could be built in the city based on existing project proposals, Goodwin said. Because those homes are not high-density residential units, however, they will likely not satisfy the city’s state housing responsibilities, he said.

The city has 12 acres zoned for high-density housing, Goodwin said, but there has been little interest from private developers to build such units.

“Yes, we’re working hard to solve this policy issue with the state, but the reality is that housing is driven by the market and until the market is ready to make investments in our community, we’re not going to see that new housing here,” he said.

Wheatland annexed 4,500 acres in 2014 as part of a major proposed subdivision in the area. Goodwin and other city officials hope the subdivision will ultimately be the site of more than enough high-density housing to comply with state requirements, along with other single family homes and commercial space.

The area is currently zoned for general planned development, but until the property owners finalize their plans for infrastructure such as water and sewer, the city cannot further refine the area’s zoning designations. The annexed land’s current zoning does not count toward Wheatland’s state obligations.

“It’s up to (the developers) for when the market is ripe enough to move forward,” Raney said. “The city remains in a reactive position. We can’t make them do anything.”

By falling out of compliance, the city no longer qualifies for certain grants, such as the community development block program, Raney said. The situation has put Wheatland in a “Catch-22,” he said.

“They’re demanding to see a certain amount of acreage (but) we need to increase sewage capacity,” Raney said, “and to get the funds to build new sewer plant facilities, we need a certified housing element, but we can’t because we don’t have the sewer capacity.”

Goodwin said that the state housing law reflects “either a lack of understanding or an unwillingness to admit that the housing crisis in the state is not equally distributed.”

“There are areas of the state that legitimately have a crisis, that have people living in tents next to freeways and river beds,” he said. “To lump everybody together really is too simplistic.”

Henderson sums up the issue more simply: “I’m not sure if Wheatland is going to solve the state’s housing crisis.”

On Thursday, Henderson said the mayors of other Northern California cities cited for noncompliance will meet with Newsom to further discuss California’s housing requirements and how to get back into the state’s “good grace.”

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Alexandra Yoon-Hendricks covers Sacramento County and the cities and suburbs beyond the capital. She’s previously worked at The New York Times and NPR, and is a former Bee intern. She graduated from UC Berkeley, where she was the managing editor of The Daily Californian.
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