After failing to approve a new housing plan for the second time last week, Huntington Beach leaders are looking at consequences that could end up costing the city millions and take away their power to control local zoning.
The city has become Orange County’s most outspoken critic of state housing mandates in its lawsuit against Sacramento, opening up questions of what other cities could be in for if they choose to disregard the mandates.
[Read: Federal Judge Denies Huntington Beach’s Requested Injunction Against State Housing Law]
As Surf City ratchets up its fight against Democratic Gov. Gavin Newsom and state housing officials, many city council members throughout OC say while housing is desperately needed, the mandates set an unrealistic goal for cities with unfair penalties.
Buena Park Mayor Art Brown said it felt like cities were being forced into a no win situation by state legislators who think city councilmembers don’t know how to run their cities.
“They’re ridiculous, they’re excessive,” Brown said in an interview. “They want us to do something, and then turn around and say well we’re going to take all your money away so you can’t do it anyway. What kind of stupid idea is that?”
If a city fails to adopt a state-required housing plan and ignores housing mandates, they can face a series of penalties including losing the power to control their own zoning or being sent into a court receivership and have decisions made for them.
A little over half of Orange County’s cities – including the county itself – have not yet adopted state-approved housing plans, which could leave them open to a once-obscure law known as Builder’s Remedy.
Under that law, a developer may sidestep city approvals to construct a housing development as long as 20% of the project’s homes are affordable housing.
[Read: Half of Orange County Lacks State Approved Housing Plans as HB Reignites Debate on Mandates]
Huntington Beach Might See Strict Penalties
At a city council meeting on Mar. 21, Huntington Beach city staff laid out a bleak picture of the city’s future if it fails to adopt a state approved housing plan.
Some of the penalties laid out by staff included the possibility of $600,000 a month fines, a suspension of the city’s power to approve development permits or even sending the city into a court receivership where they would lose power to make their own housing decisions.
Those powers were repeatedly decried as government overreach by the Republican city council majority at that meeting, who said they couldn’t move forward with a plan zoning for over 13,000 new units that could “fundamentally change the make up of Huntington Beach,” according to Mayor Tony Strickland.
“We’ve already built more affordable housing than most of the neighboring cities,” Strickland said. “This is an unjust number.”
Councilwoman Natalie Moser pointed out that if they thought the mandate was an overreach, they were not going to be happy with the state’s penalties.
“If you don’t like a loss of local control, you’re really not going to like the potential ramifications,” Moser said. “These are very real things that are going to impact our community.”
When the city council deadlocked on approving a portion of the housing plan in a 3-3 vote along party lines, City Manager Al Zelinka called for them to discuss the potential paths forward that could avoid litigation behind closed doors.
“What I would recommend is we continue this item and the council directs the city attorney and manager to come into closed session with this body and we thoroughly discuss the implications and potential paths forward,” Zelinka said. “Otherwise, I’m really concerned about the path forward.”
Mandates See Some Bipartisan Pushback in OC
Many city leaders on both sides of the political aisle have decried the requirements as unrealistic and unreasonable for years, saying they should be seen as a benchmark to aspire to and not something to actually reach.
Newport Beach Councilman Will O’Neill said that while his city went forward with adopting a housing plan, they tried challenging their requirements and got shot down.
“When you have carrots and sticks, no one wants the stick, and the penalties you’re seeing on a lot of the housing laws coming out have been increasingly large sticks,” O’Neill said in an interview.
“If the state were actually serious about seeing housing production, they’d focus less on mandates and more on deregulating the spaces that are actually causing housing production to be lower and more expensive,” O’Neill continued. “But that doesn’t seem to be the approach that Sacramento is taking. Instead they’re trying to punish cities, which they’re doing effectively.”
Costa Mesa Mayor John Stephens said one of his biggest goals was to avoid any penalty.
“I’m against penalties,” Stephens said in an interview. “None of those things are positive, and so we would like to avoid them as much as possible.”
Fullerton Mayor Fred Jung said that if the state wants more housing, they need to give cities resources to support that.
“You’re not doing any of that. But you’re telling us this is what you have to build,” Jung said in an interview. “With limited resources, and a finite amount of staff, I understand the number — we’re trying to get there — But I wish the state would consider funding some of this to help us get there.”
“Without compromising with local government and finding ways to work with local government, not in an antagonistic manner, what you’ll have is a very heavy handed punishment for failure to meet state mandates and I think we’re there.”
State laws have been increasingly beefed up by legislators over the past several years to give more tools to the state Department of Housing and Community Development to bring about compliance.
The Department did not respond to requests for an interview on this story, but directed reporters to their webpage entitled “Accountability and Enforcement,” which detailed over a dozen different laws granting the department power to penalize cities who didn’t comply with state zoning laws.
Cesar Covarrubius, executive director of the Kennedy Commission, pointed out that most OC cities met or exceeded their state requirements for above-market rate housing over the last eight year long housing cycle, and only failed on more affordable housing.
“Most cities were saying these (housing plans) were too great for us, but at the end of eight years they exceeded,” Covarrubius said. “Cities are approving more units than what the (plan) was.”
To review the data gathered by the Kennedy Commission of housing development over the last eight years in Orange County, click here.
He also pointed out that cities have the power to draw their own housing maps, and that penalties only come into effect if cities don’t get their plans approved.
“They have the opportunity to design where housing development should happen with their element,” Covarrubias said. “No one is telling you where to do it.”
Hosam Elattar contributed to this story.
Noah Biesiada is a Voice of OC reporter and corps member with Report for America, a GroundTruth initiative. Contact him at firstname.lastname@example.org or on Twitter @NBiesiada.
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