At Gov. Newsom’s urging, California will sue Huntington Beach over blocked homebuilding

Reporting from Sacramento —  In the first move of a promised battle between Gov. Gavin Newsom and local governments over California’s housing affordability crisis, the state sued the city of Huntington Beach on Friday and accused it of failing to allow enough new homebuilding to accommodate a growing population.

At Newsom’s urging, the state attorney general’s office filed a lawsuit in Orange County Superior Court against the community over a state law that requires cities and counties to set aside sufficient land for new residential development. The governor said in a statement that the suit was needed because rising housing costs threaten the economy and deepen inequality.

Newsom indicated that the case, the first filed under enhanced authority given last year to the governor’s office to investigate compliance with the housing law, could be just the beginning.

“Many cities are taking herculean efforts to meet this crisis head-on,” Newsom 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.”

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The legal action is part of a push by the governor to flex the state’s muscles over homebuilding, an issue that has long been the domain of local government. In his budget announcement this month, Newsom threatened to withhold state transportation dollars from cities and counties that reject development and proposed allocating $1.3 billion as incentive for local governments to accommodate growth and homeless services.

Although cities and counties do not build homes, local restrictions on development, such as high fees or a lack of land zoned for residential use, can prevent construction that might otherwise occur. Higher-income coastal communities, including Huntington Beach, often maintain some of the tightest development rules in the state, even as housing costs have soared over the last decade.

The median home value in the beach city of 200,000 people tops $834,000, according to real estate website Zillow. Over half of Huntington Beach’s tenants are considered rent-burdened, meaning they spend more than 30% of their income on housing, U.S. census data show.

“The failure of local governments to plan for the necessary housing supply has been a key factor contributing to this crisis,” the lawsuit states.

For more than three years, Huntington Beach has ignored the state law aimed at encouraging housing production.

In 2015, its City Council reduced the amount of housing allowed under zoning codes along two major streets by more than 2,000 homes. Residents had complained that the city was growing too quickly and took aim at plans that allowed for apartment and condominium development.

“We want to reclaim our town,” resident Lilli Wells said at the 2015 council meeting, according to the Orange County Register. “We want to keep the culture and flavor of our community.”

The decision meant the city no longer had enough land zoned to accommodate low-income residents under state requirements, prompting a lawsuit from affordable-housing activists. An appellate court ruled in Huntington Beach’s favor because it’s one of a small number of California cities organized under rules that give it sweeping authority over its own practices, including land-use policies. The city has yet to pass a new plan to comply with the state zoning requirements.

Huntington Beach City Atty. Michael Gates contended the city was following the housing law and argued that officials haven’t been able to develop a new zoning proposal because of the prior litigation. Friday’s lawsuit, Gates said, will further stall efforts to do so.

“Now instead of making progress in discussions and negotiations, good productive communications with [California Department of Housing and Community Development] representatives will be cut off because of this new state lawsuit,” Gates said.

Gates also noted that Huntington Beach is one of 52 local governments that don’t have state-approved housing plans.

“That raises questions about the motivation for this lawsuit filed only against Huntington Beach,” he said.

The city has long had a contentious relationship with state officials. Huntington Beach sued the state over Senate Bill 54, the 2017 legislation that greatly limited whom state and local law enforcement agencies can hold, question and transfer at the request of federal immigration authorities. Forty percent of voters in Huntington Beach are Republican in contrast to Newsom, a Democrat whose party also controls the state Legislature.

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State officials said Huntington Beach is one of just three cities — along with Clovis and Selma in Fresno County — that backtracked on housing plans they submitted, which were approved by the state. The cities each later decreased the amount of land set aside for housing and fell below the goals they reported to the state.

Newsom spokesman Nathan Click said the lawsuit should not be construed as retaliation against Huntington Beach officials.

“The city is egregiously and flagrantly in violation of state housing law,” Click said.

Affordable housing advocates said they were encouraged by renewed state efforts to sue. The last such case was filed in 2009, when former Gov. Jerry Brown was attorney general. The state intervened in a lawsuit against the Bay Area city of Pleasanton, where voters capped the amount of housing allowed. The case ended with Pleasanton eliminating its cap, zoning for more homes and owing about $4 million in attorneys fees.

“It is unprecedented,” said Cesar Covarrubias, executive director of the Kennedy Commission, the Orange County affordable housing group that previously sued Huntington Beach. “We’re seeing that the state is using all its resources to address the housing crisis. We need all local governments to do the same.”

Newsom also pledged to revamp the state’s housing supply goals, which would probably force communities to set aside more land for new homes. A 2017 Times investigation showed that although state law requires local governments to zone for housing, it does not hold them accountable for resulting homebuilding.

Legislators have recently taken steps toward strengthening housing laws by forcing cities that are behind on their supply goals to approve specific projects and giving the state Department of Housing and Community Development greater authority to investigate compliance.

Under a 2018 law by Sen. Bob Wieckowski (D-Fremont), a response to the prior Huntington Beach court decision, cities can no longer eliminate areas zoned for low-income housing if doing so conflicts with their state housing plan.

Wieckowski was also pleased that the state filed suit, and he believes the case reveals Newsom’s priorities in addressing housing problems.

“He’s setting a tone in this administration,” Wieckowski said of the governor. “He’s sending a message to Huntington Beach and all the other cites, saying, ‘I mean business.’”

liam.dillon@latimes.com

Twitter: @dillonliam