Realtor-affiliated group sues six cities for failing to adopt new housing plans

A non-profit group affiliated with the California Association of Realtors sued six cities in Los Angeles and Orange counties this week for failing to meet an Oct. 15 deadline to have an approved plan to meet their housing needs for the rest of the decade.

Californians for Homeownership filed the lawsuits in L.A. and Orange County superior courts under new rules that increase consequences for local governments failing to comply with state laws requiring they plan for their fair share of housing.

The group sued the L.A. County cities Bradbury, La Habra Heights, Manhattan Beach, Vernon and South Pasadena, plus the Orange County city of Laguna Hills.

The lawsuits seek an court order requiring the cities to adopt a compliant housing element on an expedited basis. The state housing department would be required to review housing elements within 45 days submitted by cities with a court orders to get them approved.

California municipalities are required under state housing laws to revise the “housing elements” of their general plans at least once every eight years to ensure they have enough land zoned to accommodate their state-mandated housing targets at all income levels.

In the six-county Southern California Association of Governments region, or SCAG, 197 cities and counties were supposed to complete those revisions by Oct. 15. Those failing to do so within 120 days of that deadline are technically out of complacence and subject to various consequences and penalties, including the threat of litigation.

The state Housing and Community Development Department approved the housing elements for just seven cities and one county by the end of the 120-day grace period on Feb. 11, state officials said. At least two others have been approved since Feb. 11.

In addition, at least 112 local jurisdictions have completed housing elements under state review, said Matthew Gelfand, attorney for Californians for Homeownership.

“These initial lawsuits focused on the cities that were the most behind in the process, appeared the most recalcitrant, and/or failed to engage with us when we approached them,” Gelfand said in an email.  “We do anticipate litigation against additional cities, but we … are hoping that other cities will be spurred to move forward with the process in a more productive way than they have been to date.”

Three of the cities being sued hadn’t submitted draft housing elements for review by state regulators as of March, even though they were required to do so by last August, Gelfand said.

“The goal of these lawsuits is to fundamentally change the way that California’s cities and counties approach their housing planning obligations,” state Realtor President Otto Catrina said in a statement. “For far too long, cities have treated compliance with these laws as optional, and we hope to put an end to that approach.”

The state determined in 2019 that the SCAG region needs to plan for 1.34 million new homes by October 2029, the end of the current planning period. That’s triple the goal for the previous 2013-21 planning cycle. SCAG staff and city representatives then divvied up that regionwide target among all the cities and counties in the region, which includes all of Southern California except for San Diego County.

Some local cities have seen dramatic increases in their state-mandated housing targets, with some facing requirements they increase their housing stock by 35% or more by the end of the decade.

For example, Manhattan Beach’s housing target jumped from 38 to 774 housing units, South Pasadena’s jumped from 63 to 2,067 units and Laguna Hills’ jumped from 2 to 1,983 units.

In prior housing element cycles, some cities took years to adopt housing elements, the organization said. For example, the City of La Habra Heights did not develop its 2013 housing element until 2020.

Faced with skyrocketing rent and home prices and high rates of homelessness, state lawmakers start drafting laws in 2017 to address California’s housing crisis. Gov. Gavin Newsom won office in 2018 after vowing to dramatically boost homebuilding in the state.

Among the revisions were new rules requiring greater analysis showing proposed housing sites could feasibly be redeveloped by 2030, especially for sites proposed for low-income housing.

New rules also limit a non-compliant jurisdiction’s ability to issue building permits or enforce its zoning laws, with the possibility of litigation and daily fines.

Non-compliant jurisdictions also face the loss of federal and state grants for programs ranging from parks to assistance for building affordable housing.

Under new powers granted by the state Legislature, the attorney general’s office sued Huntington Beach in 2019 after it abandoned plans to provide housing affordable to low-income households.

Late last year, the state created a new Housing Accountability Unit to advise local governments on how to meet these new stepped-up requirements and to prosecute jurisdictions that fail to do so.

Under a law adopted last September, SCAG jurisdictions failing to have a state-approved housing element by Feb. 11 also are required to complete rezoning by next Oct. 15, instead of within three years. Many cities said they’re unable to complete their rezoning by then, since the process typically requires public hearings and environmental reviews.

Californians for Homeownership accused Manhattan Beach of recently adopting a housing element that includes a number of sites that have little or no chance of being redeveloped by 2030.

For example, the organization said, the city included the Manhattan Country Club as a site likely to be developed with 149 low-income housing units. But the city failed to give a reason why a new owner who paid $73 million to buy the club in 2017 would close any time soon. With the allegedly inappropriate sites excluded, Manhattan Beach’s housing element comes nowhere near meeting its 774-unit housing target, the organization said.

“There are some harsh penalties for failing to adopt a housing element under state law,” Gelfand said. “Time is of the essence because we are already more than six months into the eight-year period that these cities are planning for. Developers are waiting for these plans to be finalized, and every month that these cities delay is another month working with outdated land use rules that make it hard to develop housing.”