HUNTINGTON BEACH’S LAWSUIT CHALLENGES NEWSOM’S HOUSING MANDATES
By Will Swaim
We’ve seen Gov. Gavin Newsom impose questionable — even dangerous and illegal — policies by declaring states of emergency or merely “crisis” with regard to Covid, climate and energy. He’s done it again on the issue of housing. The problems of housing affordability and homelessness constitute a crisis so compelling, the governor says, that they can be solved only by forcing cities to permit the construction of 2.5 million new homes by 2030.
Huntington Beach has refused to go along with the state’s demand that the city approve construction of 13,368 new homes.
In response, on March 9, the state sued Huntington Beach.
“The message we’re sending to the city of Huntington Beach is simple: Act in good faith, follow the law and do your part to increase the housing supply,” Bonta said in announcing the suit. “If you don’t, our office will hold you accountable.”
Within hours of the state’s lawsuit, Huntington Beach fired back. In a federal lawsuit, the city accuses the state of violating California and U.S. constitutional laws through the Regional Housing Needs Allocation process.
Every eight years, the RHNA process requires cities to produce a plan for meeting housing demand. But statewide “demand” — and local targets for meeting it — are determined by state officials. Huntington Beach’s federal suit says Newsom, state housing director Gustavo Velasquez, the state legislature and others are using the RHNA process to violate the city’s rights.
At stake is the power of cities to plan their own development. Can the governor and other state officials force Huntington Beach — or California’s 481 other cities — to build more housing? Does the declaration of a housing crisis allow Sacramento to trample an array of federal, state and local regulations, including key federal civil rights?
Huntington Beach says its claims are “novel and complex.” We do our best to offer a summary of those claims here, but there’s no substitute for reading the city’s lawsuit itself, which you can find here.
1. Violates California Constitution Art. XI (Charter City)
The Huntington Beach complaint rests on multiple legal claims, including its assertion that its status as a charter city gives it tremendous authority over local matters, including — maybe especially — zoning. The state’s imposition of higher housing densities violates that constitutional authority (California Constitution, Art. XI).
From the complaint: “The City of Huntington Beach was not created by the State. In fact, the City, invoking Section 5(a) of Article XI of the California Constitution, provides that a Charter City shall not be governed by State law in respect to ‘Municipal Affairs.’ Rather, ‘so far as “Municipal Affairs” are concerned, Charter Cities’ laws are ‘supreme and beyond the reach of [State] legislative enactment.’ (California Fed. Savings & Loan Assn. v. City of Los Angeles (1991) 35 Cal.3d 1, 12.)”
The fact that charter cities have “voluntarily followed” the state’s housing process in the past and may do so in the future does not mean that charter cities “relinquish their Charter City Constitutional Home Rule authority.”
2. Violates the First Amendment speech rights of cities, city officials, and residents
What may be most “novel” in the city’s complaint is this: Huntington Beach alleges that state of California housing regulations require “state speech,” and that, the city says, violates its First Amendment speech rights under the U.S. Constitution.
Under new state housing regulations, city officials must find, as the state demands, that there is a “housing crisis” in order to sweep aside all other existing laws — including environmental laws — that might block the state’s higher densities.
The city alleges that the state’s housing regulations compel the City Council to arrive at a pre-ordained, “fixed,” “State-contrived” speech. “Gavin Newsom, the Director [of HCD], HCD, and other State actors want them to say, including but not limited to, there ‘is a housing crisis,’ that Huntington Beach ‘needs more affordable housing,’ that the State ‘needs more affordable housing,’ that ‘the benefits of high-density development in the City outweigh the negative impacts of high-density development on the environment,’ and so on, despite objective evidence to the contrary. The Governor, the Director, HCD, and SCAG use the RHNA Laws regulate, even mandate, how the City communicates its stance on housing, what ultimately the Council Members’ ‘say’ in their vote, and what Council Members are compelled to say to the public with regard to ‘housing need’ to justify their vote.”
State housing regulations “require the City Council Members to replace their free speech, i.e., the verbal expressions of their freely formed opinions and decision-making thoughts, with the words of the State that advance the State’s political agenda.”
Specifically, Huntington Beach says, state housing law requires its city council to adopt a “Statement of Overriding Consideration” that dismisses environmental regulations as an impediment to the housing crisis. Never mind “that the City Council may not otherwise choose to say [this], may not believe [it] necessarily to be true”: the state requires that the city’s officials must declare “that the benefits of the proposed high-density housing outweigh the negative impacts on the City’s environment.”
The city calls this “a fixed conclusion,” an approval of high-density housing that city officials must reach “even before consideration through public hearings.”
Circumventing public hearings is itself a legal violation, the city says. The Council must endorse the state’s findings and remedies “even before the City Council has an opportunity through its rightful, constitutionally provided, legislative process, to hold public hearings and make its own findings on a proposed zoning issue before adopting a ‘Statement of Overriding Consideration.’”
3. Violates the California Environmental Quality Act (CEQA)
The Free Speech violation described above isn’t a matter of mere philosophy. It puts city officials in a bind: In order to obey state housing regulations, they must override CEQA; to obey CEQA, those officials must violate housing regulations. “For the two State laws, RHNA Laws and CEQA, to be in direct competition or conflict forces local City Council’s in Huntington Beach to relinquish local decision-making one way or the other.”
4. The California Department of Housing and Community Development (HCD) regulatory process is broken
The complaint alleges that the HCD’s conclusions — about whether there’s a housing “crisis,” what it would take to resolve that crisis, and who bears responsibility for solving it — are based on “faulty housing data and population projections concerning population growth to create and then require cities to implement components of their Housing Elements.”
This claim is supported by a state independent auditor’s 2022 report, which concluded, “HCD does not satisfactorily review its needs assessments to ensure that staff accurately enter data when they calculate how much housing local governments must plan to build… HCD could not demonstrate that it adequately considered all of the factors that state law requires… This insufficient oversight and lack of support for its considerations risks eroding public confidence that HCD is informing local governments of the appropriate amount of housing they will need.”
According to Huntington Beach’s complaint, the troubled state system specifically relies on “the wrong population forecast, [compares] regions that are not comparable to Southern California, and [uses] inaccurate and unattainable vacancy rates.” The state relies on “a methodology that grossly overestimates the projected housing needs by including overcrowding resulted in double counting the number of required dwelling units for this Planning Cycle, which was also all done in violation of RHNA Laws. Such factors were not included in prior methodologies and such calculations are in violation of statutory law.”
The city asserts that SCAG ignored these problems because math, accurate data, and state law were ultimately less compelling to SCAG (and state regulators) than political pressure — “last-minute political wrangling between larger, more influential cities pressuring SCAG to take RHNA units away from their cities” and the determination of those larger cities to “force” new development “into other, less politically influential cities, like Huntington Beach.”
Huntington Beach raised these objections through SCAG but, it alleges, “The Director of SCAG indicated that it would not sue HCD for the violations of State laws even though SCAG had formally objected to the Regional Determination but only because the State has ‘unlimited lawyers’ and resources, not because a challenge would not have merit.”
5. Violates California Constitution Art. XI (Due Process)
In imposing housing requirements derived from this faulty system, California housing officials and the governor discriminated against Huntington Beach — a violation of due process rights guaranteed to the city under California Constitution Article IV, section 16, the city says. “The poorly enacted RHNA Laws cause cities like Huntington Beach to be disproportionately burdened while allowing other cities to zone for very few RHNA Units.”
The city’s claim notes the different treatment of cities that have failed to file housing plans that comply with the governor’s housing target. Some 280 California cities are not compliant with the solutions required under the state’s plan. But many cities have been given a pass — a gift from the governor that looks suspiciously political in nature, the suit asserts.
The city notes that “the State’s high-density housing proliferation scheme . . . targets already-developed areas of the State, does little or nothing to increase housing development in undeveloped areas of the State, and exempts entirely certain ‘favored’ portions of the State.” It continues: “according to the 2010 Census, 95 percent of Californians live on just 5.3 percent of the territory in the state.” In other words, over 95 percent of California is undeveloped and unoccupied.”
Why would state regulators go to war with some cities over home construction, but not others? Why would the state impose housing higher densities on cities at all — given that so much of the state is unoccupied?
Huntington Beach officials assert that the reason is political.
Consider Marin County. From the city complaint: State regulators have “carved out ‘favored’ portions of the State to be allowed to skirt the very same Housing Laws, including RHNA Laws, which are imposed on Huntington Beach. In a 2019 article, entitled ‘Huntington Beach Sued While Marin County Exempted from Affordable Housing Requirements’ [California Globe] reported that Governor Gavin Newsom’s home county, Marin County, is ‘enjoying a moratorium on affordable housing building requirements until 2028.’ To accomplish this, ‘sneaky language inserted into a 2017 budget trailer bill [AB 106] allowed Marin County to maintain its extra restrictions on how many homes developers can build, giving the finger to the California Anti-NIMBY Statute.’”
The city notes, “Marin County is only required to create enough new housing for 0.9% of its 2017 population compared to the regional average of 2.4%. . . . Marin County is allowed to flout RHNA Laws; the City of Huntington Beach must plan to build 13,368 RHNA Units while Marin County gets a pass.”
The case is similar in Santa Barbara County, the suit declares: “It’s at least noteworthy that the affluent suburbs seeking ways around their quotas, mostly in the San Francisco Bay Area, are overwhelmingly Democrat in their political orientation while Huntington Beach is a Republican stronghold. That would be Montecito, home to celebrities galore, including Oprah Winfrey, Rob Lowe, Ellen DeGeneres and, most recently, expatriate British Prince Harry and his wife, actress Meghan Markle.”
“Some of the sites [in Santa Barbara County] are vacant while others are occupied, including some shopping centers and churches. None is in Montecito or an adjacent enclave called Summerland, even though the county’s inventory of vacant land includes about a dozen parcels, some of them large, in those two communities. When county officials outlined their plan at a public meeting this month, they were asked why no sites in Montecito were included. [Santa Barbara] County planning director Lisa Plowman said only sites whose owners were interested in development were chosen and no one in Montecito or Summerland was amenable to dense multi-family housing.”
6. Violates the Fourteenth Amendment of the U.S. Constitution
Applying a system based on faulty data; to cities chosen for the political orientation; that requires city officials to violate one law in order to follow another: for these and other reasons, the city says, the state’s housing mandates violate the U.S. Constitution’s protection against “patently arbitrary classification.” “A flawed state mandate can be no ‘mandate’ on a city at all.” “These laws are so flawed, conflicting, vague, arbitrary and capricious, and left to subjective interpretation and application of political actors as to be unconstitutional.”
The state admits that this system is flawed, the suit alleges. In the summer of 2019, the legislature authored — and Gavin Newsom ultimately signed — AB 101.
“So flawed are the RHNA Laws that the State, in a damning admission that its own Legislation has been flawed for years, recently passed AB 101, which states: ‘this bill, by December 31, 2022, would also require HCD, in collaboration with the Office of Planning and Research and after engaging in stakeholder participation, to develop a recommended improved regional housing need allocation process and methodology that promotes and streamlines housing development and substantially addresses California’s housing shortage, as provided. The bill would require HCD to submit a report on its findings and recommendations to the Legislature upon completion.” By virtue of AB 101, the State admits that its RHNA Laws (and processes) to determine how many RHNA Units are needed in the State, and individual jurisdictions, must be fixed. As will be demonstrated at trial, a ‘flawed State mandate’ can be no ‘mandate’ on a city at all.”
If the state were truly interested in building additional housing, it ought to look first to its own house: over decades, driven by environmentalists, organized labor and others, the state of California has erected a regulatory barrier around the construction of new homes. State officials could eliminate these laws systematically and free homebuilders to do what they do best: Build.
Will Swaim is the President of the California Policy Center and cohost of National Review’s Radio Free California podcast.