First Gov. Gavin Newsom said he wanted 3.5 million new homes to be built to address California’s housing crisis. Next he sent a shock wave through municipalities with a lawsuit no one saw coming.
Newsom, through the Attorney General’s Office, sued the city of Huntington Beach on Jan. 25 for failing to have a housing plan that addresses the needs of all residents in the Orange County coastal community.
The governor’s action was the first of its kind under a new law that allows the state to sue a local jurisdiction found to be out of compliance with its housing goals.
Huntington Beach is not alone. Fifty-one other cities in California are currently listed by the state as having housing plans that are out of compliance with requirements. Among them are a handful of Valley cities — Clovis, Selma, Orange Cove, Dos Palos and Atwater — as well as the coastal resort town of Pismo Beach.
By state law, cities are required to have plans detailing how much housing can be built. Land must be zoned to accommodate a range of housing types — from apartment complexes to upscale single family dwellings.
The lawsuit, and the message it sent, was not lost on Jim Lewis, city manager for Pismo Beach, which has little open land and has some of the most expensive housing in the state: “I think about this (housing) every day. I don’t need the governor hitting me with a bat. That’s not effective.”
That said, Newsom is showing local leaders he is going to approach the wonky subject of housing in a much different manner than his predecessor. He is motivated by California having a housing crisis that, if unsolved or ignored, will weigh down the economy and state’s quality of life.
Tensions with Huntington Beach
Known as Surf City, Huntington Beach has a population of just over 200,000. Nearly 53 percent of residents have a college degree (associate’s, bachelor’s or graduate). The median household income is $94,281.
In 2013 Huntington Beach’s housing plan met state requirements for having adequate numbers of units aimed at all income levels. But then the city amended its plan and reduced the number of homes to be built, particularly at the low end of the income scale.
According to Newsom’s office, state officials tried repeatedly to work with the beach city to revamp its housing plan. But the City Council ultimately rejected a proposed amendment to add new units. It was then the governor decided to file suit.
“The state does not take this action lightly,” Newsom said. “The huge housing costs and sky-high rents are eroding quality of life for families across this state. California’s housing crisis is an existential threat to our state’s future and demands an urgent and comprehensive response.”
Huntington Beach City Attorney Michael Gates said in a statement that the town had complied with the requirements and was working with the Housing and Community Development Department to address concerns.
“This lawsuit by the state is poorly timed,” he said.
Pismo Beach’s housing plan
Farther north is another popular surf city — Pismo Beach. With a steady population of 8,200, Pismo Beach swells on weekends and in the summer when Valley residents arrive to flee the heat.
The particular challenge in Pismo is getting housing built that the workforce can afford, said Lewis. According to Zillow, the median price of a home in Pismo Beach stood at $854,000 in December.
Nine out of 10 new homes built in Pismo are vacation rentals used by people from Fresno and Bakersfield, Lewis said. He added Pismo has $3 million in developer fees it has collected over the years that Lewis wants to put toward constructing affordable homes. “I have begged developers to use the money for affordable housing. They don’t want to do it,” he said. “They want to build vacation rentals with a second story.”
Still, the city is required to have a housing plan that spells out how many homes will be built across a range of income levels. Much of that will come in the form of “accessory dwelling units” — jargon for granny units and secondary dwellings at existing homes. Lewis said Pismo Beach has a good relationship with the state, and expects its plan will be approved this summer — a characterization agreed to by state officials.
More lawsuits ahead?
A Housing and Community Development spokesman said the Valley cities currently on the noncompliance list are working well with the state to get their plans in order.
When it comes to Clovis, Fresno’s neighbor with a population of 110,000, City Manager Luke Serpa said the state determined Clovis did not have enough acreage zoned for high-density housing. The council has since approved that zoning, and he hopes the housing plan will be back in compliance sometime this year.
Serpa also pointed out that Clovis is among the leaders in the state when it comes to adding new housing, the key factor toward easing the crisis. “Clovis continues to issue more permits than most, if not all, cities our size,” he notes.
Newsom left no doubt where he stood when he announced the Huntington Beach lawsuit. “Cities and counties are important partners in addressing this housing crisis, and many cities are making Herculean efforts to meet this crisis head-on,” he said. “But some cities are refusing to do their part to address this crisis and willfully stand in violation of California law. Those cities will be held to account.”
Before turning to the courts, the governor needs to ensure that his Housing and Community Development Department exhausts every avenue to work with cities to bring their housing plans into compliance. They, in turn, must make good-faith efforts to do so.
If both sides work together as they should, a way out of this crisis might be achieved. And a new, better California will be the result.