San Mateo County still has most noncompliant housing plans in the area, but new law could reverse that trend

But Senate Bill 1037, introduced by state Sen. Scott Wiener, D-San Francisco, will go into effect Jan 1, 2025, and could result in cities paying tens of thousands of dollars in fines each month if they don’t comply with certain state-level housing requirements. One of those requirements is maintaining a compliant housing element, but getting the official stamp of approval from HCD has not been a linear path for many cities during the latest 2023-31 cycle. In fact, several cities, such as Half Moon Bay, Atherton and Woodside, are technically out of compliance, according to the HCD website. Portola Valley was decertified several months ago.

The county still has the highest number of jurisdictions that are technically out of compliance out of all nine Bay Area counties, followed closely by Contra Costa County. With the new law, cities can be fined anywhere from $10,000 to $50,000 a month for noncompliance, which would then get allocated for affordable housing developments.

Foster City Mayor Stacy Jimenez said she understands the sentiment behind the new legislation but is concerned about how it will play out in practice, especially given a continuously high interest rate environment and tough lending landscape for developers.

“I can see why it was put in place, and I think the motive is a good thing for cities that are dragging their feet, but it could potentially be problematic for Foster City,” she said. “We can lead a horse to water, but we can’t make it drink. We’ve done everything on our end to meet RHNA requirements.”

Belmont councilmember Tom McCune said the housing element process was long and winding, which was not necessarily a unique experience. Other city leaders have also expressed concern over HCD’s seemingly opaque approval process and frequently-changing standards.

“Dealing with HCD at times seems like a catch-22,” McCune said. “I’m pretty sure we met every deadline, and it still took five or six iterations to get it approved. It was back and forth over and over again. … We got there, but it was really messy and inefficient, even for a city that is really pro-housing and has a layout that is naturally good for housing development.”

But many housing experts have said the law is an important tool the state needs to weaken the barriers some jurisdictions continue to maintain, subsequently exacerbating an affordability crisis in the region and state. In a statement issued in September from Attorney General Rob Bonta, “violating our state housing laws, and delaying or denying the homes that Californians desperately need, can lead to more serious consequences than ever before.”

Housing advocates have previously pointed to several cities on the Peninsula as examples of jurisdictions that have historically dragged their feet on housing. In May, a lawsuit was filed against San Mateo, claiming it was inflating the number of housing units it could realistically fit on some of its identified sites. And Millbrae has also come under fire from advocates for suing the county over a potential housing development for formerly homeless families and seniors.

While some cities, such as Redwood City and South San Francisco, were quick to receive housing element approvals, others only received the official OK a couple months ago. San Mateo’s housing element compliance hinged on voters passing Measure T in November, which increased height and density limits in certain parts of the city. The measure passed by 59%. While Belmont is in a good position for this cycle, he said he is concerned with the next RHNA cycle, given how progressively aggressive HCD has been with each new cycle.

Jimenez said she hopes the state will only go after those jurisdictions acting in bad faith.

“We’d like to believe that the state has its good intentions, and they’ll only go after bad actors but there are some loopholes that I’m concerned about,” she said.