Housing Element parameters are determined by the state, guiding cities and counties to produce sufficient inventory to accommodate community needs.
While Regional Housing Needs Allocation (RHNA) numbers get updated every eight years, what is planned for – and what is actually built – have long differed. The state this year has had more opportunity to use the Housing Accountability Unit for enforcement, which includes suing cities for noncompliance.
“The era of a more robust enforcement of state housing law is very recent,” Matthew Lewis, director of communications with California YIMBY (“Yes In My Backyard”), told the Free Cities Center. “For almost 40 years, the state kind of looked the other way – that includes planning departments and staff – and when CA YIMBY came on the scene, in 2017, some cities weren’t producing housing at all.”
Even if housing wasn’t materializing, RHNA numbers have continued to grow, meaning many communities are well behind state targets. And while California home construction numbers have improved, they haven’t approached the levels pledged by Gov. Gavin Newsom in his first gubernatorial campaign.
Still, cities have had trouble finding where to build, with neighbors opposed to new development and CEQA (California Environmental Quality Act) litigation often causing excessive delays. Meanwhile, rents, mortgage rates and home prices haven’t stopped rising as supply lags. A new report from the Legislative Analyst’s Office (LAO) shows the cost of a mid-tier California home is more than double the national average; even a “bottom-tier” California home is far more expensive.
Among solutions that some jurisdictions have explored: higher density structures that look like a single-family home, built in neighborhoods that have broadened beyond strictly single-family zoning. The state also has loosened rules for building Accessory Dwelling Units (ADUs) on the same lot as a single-family home. Some residents have expressed concern about property values. With home asking prices now pushing ever upward, others see such expansion measures as a positive development.
But if the state can’t count on local governments to make tough decisions, enforcement measures also can come from Builder’s Remedy.
Builder’s Remedy has existed since 1990. After the dismal failure to meet state housing numbers in 2021-22 and median home prices crowding out first-time buyers, the state is using it as an enforcement measure. The state added additional mandates (Assembly Bill 1893) in this year’s legislative session. And the state isn’t backing down, Lewis said, adding that city planners are facing a cultural realignment in terms of housing production goals.
The Ninth Circuit federal appeals court last month ruled against Huntington Beach in its court challenge to state housing laws. Newsom announced in a statement that Norwalk is not exempt from providing adequate shelter to homeless residents, and last month Attorney Gen. Rob Bonta sued the city for noncompliance.
And the City of La Habra Heights has, after three years, complied with state mandates to build enough affordable units – 244 in the town of 5,000. In Palo Alto, (population 65,000) which also encountered compliance difficulties, state estimates show the number of new units required is more than 6,000.
“The good news is any city in the state that wants to be compliant can do it,” Lewis said. “While a lot of cities are putting up resistance, the state is taking it very seriously.” Even as the state has gone from lax enforcement to suing cities, more cities are stepping up on their own accord, Lewis said, noting that the city of Sacramento is now a leader in housing policy reform efforts.
“They’re a model,” Lewis said. “There’s plenty of room, we can be progressive on housing, every city in the state can wake up, but some still are fighting it, which is why the state is cracking down.” Industry analysts note it is difficult but not impossible to produce the number of homes needed to meet state housing requirements. The UCLA Lewis Center for Regional Policy Studies recently weighed in, noting in a review brief that the state has reasonably applied Housing Element law, despite protests from some local planners.
“The societal costs of overestimating housing need in the RHNA process are minimal, whereas the costs of underestimating need are severe, given California’s housing crisis,” the brief states. “Because the costs of overshooting are minimal, there would be no need for the Legislature to adjust cities’ sixth-cycle [RHNA] targets even if they had been set ‘too high.’ In sixth-cycle housing elements to date, cities are using wildly disparate approaches to assess the capacity of their site inventory to accommodate the city’s RHNA. Only a small minority of cities have realistically accounted for economic conditions and site development rates.”
Still, it can be daunting in any metro area. Los Angeles Mayor Karen Bass recently had to restrict where affordable housing can be built following concerns from tenant organizations.
The shared equity model is also part of the Dream For All Shared Appreciation Loan – a down-payment assistance program for first-time home buyers through the California Housing Finance Agency (CalHFA).
Meanwhile, the number of California’s pro-housing designated jurisdictions continues to grow, qualifying them for financial resources in their housing growth plans.
“At nearly 50 pro-housing communities, California is making progress – but we can do better,” Newsom said in a statement. “At a time when the state is facing a housing crisis, every local jurisdiction should be stepping up to earn this distinction.”
The California State Auditor’s report, which is slated for release by mid-2025, is set to examine at least 10 cities to show progress in meeting state housing mandates.
Sarah Downey is a journalist who covers political and social policy. She’s reported for Newsweek, Chicago Tribune, and Boston Globe in the U.S. and overseas.
