Consequences coming for housing element noncompliance

Now, housing elements are like a contract between cities and the people of California, requiring every community to plan for housing that meets the needs of all regardless of income. HCD reviews all housing elements, determines whether they comply with state law, and certifies those that do.

As part of this enforcement regime, there are strict deadlines for housing elements to be certified by HCD. Bay Area cities are legally mandated to have certified housing elements by Jan. 31. As of Feb. 1, cities with housing elements that have not been certified by HCD will be vulnerable to a number of penalties, most significantly third-party lawsuits and the builder’s remedy.

In the Southern California region, where cities were required to have HCD-certified housing elements by Oct. 15, noncompliant cities are already experiencing penalties. Californians for Homeownership, the nonprofit legal arm of the California Association of Realtors, has sued nine cities for noncompliance.

Some cities, like Manhattan Beach, attempted to avoid lawsuits by adopting their housing element before HCD certification, arguing it complied with the law already. In response, Californians for Homeownership sued Manhattan Beach twice, once for adopting a noncompliant housing element and again for failing to rezone by the state-mandated timeline. Three other cities have already settled their lawsuits. The settlements include admissions recognizing the builder’s remedy.

The builder’s remedy is a provision of the Housing Accountability Act that requires cities without certified housing elements to approve any project, regardless of base zoning, as long as that project has 20% low-income units. The builder’s remedy would enable, for example, 10-story midrises in any single-family neighborhood in cities without compliant housing elements. According to HCD, builder’s remedy proposals vest, so a city cannot deny a builder’s remedy application retroactively after the city’s housing element gets certified.

Again, cities in SoCal are already seeing the builder’s remedy take effect. In Redondo Beach, a developer proposed a 2,300-unit project on a defunct power plant. In Santa Monica, at least 12 Builder’s Remedy applications have been submitted, totaling more than 4,500 units, more than 800 of which are affordable to low-income households. The tallest, at 15 stories, is almost double Santa Monica’s highest height limit. Bay Area organizations such as YIMBY Law are already preparing developers to take advantage of the builder’s remedy come Feb. 1, when most cities in San Mateo County will likely still lack HCD certification.

Many cities in San Mateo County believed they would not experience these penalties because of a 120-day grace period that allows cities without compliant housing elements to access state grant funding until May 31. However, the May 31 deadline extension exclusively applies to state grants; other penalties go into effect Feb. 1.

To preserve control of their communities’ planning, city councilmembers and their planning staff need to understand the law better. Many aspects of housing element law are relatively new and complicated, but most cities are not even getting the basics right.

Seven cities in San Mateo County have received review letters from HCD. Each letter provides unique feedback, but there is a lot of overlap. Most cities are planning for new housing in unrealistic locations that promote segregation by concentrating new homes in lower-income, lower-opportunity neighborhoods. They are ignoring constraints to housing development created by governmental regulations, such as zoning standards. And they have few programs to address those constraints they do identify, without clear timelines for implementation and metrics for success. Most cities aren’t fully completing any part of this process.

The Housing Leadership Council wants cities to have great housing plans that meet state requirements. Alongside many other organizations, we have written comment letters on every draft housing element released in San Mateo County with specific policy recommendations that can help cities comply with the law and meet the housing need of their entire communities. It is critical that cities proactively incorporate feedback from public comments into their housing elements to comply with the law — and maintain control over the future of their communities.

Jeremy Levine supports homes for all as policy manager with the Housing Leadership Council. When he is not watching city council meetings, you can find him gardening or hunting mushrooms.