Gavin Newsom, Karen Bass Declare NIMBY Martial Law To Stop Duplexes in the Palisades

Plus: Oregon's radical YIMBY centralization, yet another challenge to inclusionary zoning, and DOGE's cuts to fair housing grants get overturned in court.

Happy Tuesday, and welcome to another edition of Rent Free. This week's stories include:

• A California homeowner files yet another challenge to a local "inclusionary zoning" program.
• Oregon passes what might just be the most radical YIMBY reform yet.
• A federal judge sides with fair housing groups claiming that the Department of Housing and Urban Development (HUD) is improperly dragging its feet on awarding federal fair housing enforcement grants.

But first, our lead item on California Gov. Gavin Newsom and Los Angeles Mayor Karen Bass' declaration of NIMBY martial law to prevent duplexes from being built in areas of Los Angeles affected by this year's wildfires.

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Gavin Newsom, Karen Bass Declare NIMBY Martial Law

California Gov. Gavin Newsom and Los Angeles Mayor Karen Bass are doing their best to ensure that no new net housing is created during the rebuilding of Los Angeles' wildfire-ravaged neighborhoods.

On Wednesday, the two issued twin executive orders that collectively suspend a state law allowing builders to build duplexes on single-family zoned properties and/or divide single-family zoned lots into separate properties.

The state law, Senate Bill (S.B.) 9, was passed in 2021 with the goal of enabling more small-lot starter homes and "middle housing" in the state's lowest-density areas.

Bass said in a statement issued a day prior to her executive order that while she supports the goal of S.B. 9, deploying it in the context of the Palisades rebuild would strain local infrastructure and heighten future fire risks.

"Legislators in Sacramento could not have foreseen the bill's impact on the Palisades community as it works to rebuild from one of the worst natural disasters in state history," said Bass in a Tuesday statement. Permitting new duplexes and lot splits "could fundamentally alter the safety of the area."

Critics of Newsom and Bass' orders argue that S.B. 9 already contains sufficient fire safety provisions and that suspending the law will only impair efforts to rebuild the Palisades.

Sonja Trauss, executive director of YIMBY Law, which litigates to enforce state housing laws, says that the governor's post-disaster emergency powers to suspend laws are more properly applied to regulations that might inhibit recovery efforts. She gives the example of suspending procurement laws to expedite the purchase of emergency supplies.

Suspending a law that allows additional housing construction does not fit that mold, she says.

"S.B. 9, which allows duplexes on single-family lots, doesn't interfere with recovery. It is recovery," Trauss tells Reason. "For someone who had a single-family home and now has nothing, it might be a faster path for them to rebuild up to four units if that's more economically feasible."

S.B. 9 already requires builders to meet updated ingress and egress standards. It also gives local governments discretion to deny S.B. 9 projects if they have health or safety impacts that cannot be mitigated.

Nevertheless, Newsom's executive order says that "the unprecedented scale of this disaster calls for affording local governments increased discretion to ensure that SB 9 development in the rebuilding areas appropriately accounts for fire safety concerns."

The practical effects of suspending S.B. 9 are likely limited. Builders have made little use of the law since it went into effect in 2022, in large part because local governments have actively limited its effectiveness by piling additional regulations and fees on duplex and lot split projects.

A bill to make S.B. 9 more usable by preempting those additional local rules failed a crucial committee vote back in April.

Bass and Newsom's executive orders attempting to streamline wildfire rebuilds have also generally excluded projects that would add additional units and additional floor space.

Both have the effect of limiting builders' willingness to propose S.B. 9 projects in the Palisades.

A spokesperson for the mayor's office told LAist that only seven S.B. 9 applications have been filed in the Palisades since the fire in January, out of 400 wildfire rebuild applications in the area. The Palisades fire destroyed 5,000 homes in Los Angeles in very high fire hazard severity zones.

Despite the limited use of S.B. 9 in the Palisades, community groups and local elected officials have expressed concern that the law has been enabling builders to profit off of the wildfire rebuilding efforts.

"While your Emergency Orders have paved the way for an accelerated recovery by streamlining and waiving hurdles that have greatly benefitted homeowners, opportunistic developers are now using them in conjunction with state density laws to exploit a devastating disaster for their economic advantage," wrote Los Angeles Councilmember Traci Park, who represents the Palisades, in a Monday letter to Newsom urging the suspension of S.B. 9.

Westside Current first reported on Park's letter.

Trauss says it's unfortunate that the governor and mayor bent to this local pressure campaign, given the limited use of S.B. 9 in the wildfire rebuilding efforts and the fire safety provisions already written into the law.

"This was an opportunity for Mayor Bass and the governor to show leadership," she says.

Trauss says that YIMBY Law is currently considering whether to file a lawsuit challenging the governor's suspension of S.B. 9.

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Oregon Gets Radical New Powers To Override Local Zoning Rules. Will the State Use Them? 

Oregon continues to evolve land use regulations up to the state level with the goal of overriding local obstacles to home construction.

State lawmakers passed two bills this legislative session to this effect.

The first, House Bill (H.B.) 2138, is a sweeping bill directing localities to amend their zoning codes to allow for a long list of housing types. Localities must allow attached and detached housing on low-density lots, permit duplexes, triplexes, and fourplexes on the same lots, and allow these lots to be subdivided and sold separately.

All told, this expands on Oregon's previous "middle housing" reforms that directed localities to allow smaller-unit multifamily developments in single-family zoned neighborhoods.

Additionally, H.B. 2138 would require cities to give builders a "density bonus" above existing zoning limits when they're constructing affordable housing and/or handicap accessible housing.

It would also direct localities to count "sleeping units" in co-living buildings as less than a full unit when applying parking minimum regulations and homes-per-acre limits. Michael Andersen of the Sightline Institute writes that this will make Single-Room Occupancy (SRO) developments more feasible under existing zoning codes.

For all its reforms, H.B. 2138 is relatively standard in approach. Like other preemption bills, it tells localities that they have to amend their own zoning rules to allow certain types of projects.

Much more radical in approach is H.B. 2258.

This bill gives the state the power to compel localities to approve projects using state-approved building plans on vacant, urban lots, regardless of any local zoning restrictions.

Because the state would also have carte blanche to draft those state-approved building plans and because vacant lots would include lots on which a pre-existing building had been recently demolished, this effectively means the state could require a locality to allow any type of housing almost anywhere within an urban area.

The theoretical grant of power to the state to override local zoning restrictions is effectively absolute. Were the state to aggressively use its newly granted powers, H.B. 2258 could be considered one of the most radical YIMBY zoning reforms to be passed to date.

But how radical H.B. 2258 proves in practice depends very much on the decisions state agencies make in implementing the law.

The law includes a number of clauses saying that the state "may" adopt rules for requiring localities to approve housing, and it "may" adopt state-approved building plans. That leaves it a lot of discretion to state agencies deciding when, and if, to override local zoning.

The state could, for instance, write rules to override local restrictions on accessory dwelling units and townhomes, but nothing else.

The political will to use the law aggressively might also not be there. H.B. 2258 passed nearly unanimously in the Legislature. The governor's office, which was the primary advocate for the bill, also did not pitch it as a major override of local zoning authority.

In other words, the lawmakers who passed the bill and the executive branch officials who will implement it do not seem to envision it as a vehicle for radical zoning abolition.

"My read of it as a lay person is that it gives the state vast powers that it has no current intention of using," says Andersen to Reason in an interview. "Unless someone really embraces its potential within the state land use agency, I don't really see it taking off."

Nevertheless, the law is on the books now, and its grant of powers to the state to do something radical should it choose to is there. Time will tell if H.B. 2258 will ever be used to its full effect.

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Yet Another Challenge to Inclusionary Zoning

Yet another homeowner is challenging their city's requirement that they pay hefty affordable housing fees in order to add new housing on their property.

Wesley Yu of East Palo Alto, California, plans to build a single-family home and accessory dwelling unit on a vacant lot he owns next to his primary residence.

In order to do so, East Palo Alto is requiring that Yu either convert one of the units into income-restricted affordable housing or pay the city a $55,000 affordable housing fee.

In a lawsuit filed this past Thursday in the U.S. District Court for the Northern District of California, Yu argues this requirement is an unconstitutional exaction. Yu is being represented by the Pacific Legal Foundation.

Under existing U.S. Supreme Court precedent, governments can only attach conditions to building permits that have some "essential nexus" to the proposed project's impacts. Those conditions must be "roughly proportional" to the project's impacts.

Yu argues that building two units of housing on his property does not make housing in East Palo Alto less affordable. Therefore, he can't be forced to pay an affordable housing fee or create an income-restricted unit in order to get a building permit.

Yu's complaint notes an added irony that, if he were to fulfill the city's inclusionary zoning requirement by making his newly built home an income-restricted affordable unit, he likely wouldn't qualify to live in it.

His lawsuit is part of a flurry of recent challenges to "inclusionary zoning" ordinances that require new housing developments to contain affordable housing units or pay affordable housing fees.

Homeowners in Seattle filed a lawsuit challenging that city's affordable housing mandates last month. (Read Rent Free's coverage of that case here.)

While the U.S. Supreme Court's rulings on unconstitutional conditions would seemingly quite obviously preclude cities from imposing mandatory affordability requirements on new housing, lower courts have been loath to rule in favor of plaintiffs challenging inclusionary zoning.

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Judge Blocks DOGE's Cuts to Fair Housing Grants

A federal judge in Washington, D.C., has blocked the Trump administration's attempt to withhold federal grants to fair housing groups.

Back in March, the U.S. Department of Housing and Urban Development (HUD) had canceled grants to fair housing groups, which use that money to file fair housing enforcement actions against property owners and local governments.

At the time, HUD had said the grant cancellations were being done to ensure that grantees and contractors were following President Donald Trump's executive orders. Grant termination letters obtained by the Associated Press said the cuts were being done at the behest of the Department of Government Efficiency (DOGE).

In response, a collection of fair housing groups led by the National Fair Housing Alliance sued the administration. They argued the administration was required by statute to release the fair housing grants. They argued a temporary restraining order was necessary because HUD has only until September 30 to award the fair housing grants, after which the funding becomes unavailable.

HUD had argued that while it was taking additional time to review the award of fair housing grants, it still planned on meeting that September 30 deadline to dispense the funds in question.

In a Monday-issued decision, U.S. District Judge Sparkle Sooknanan of the U.S. District Court for the District of Columbia largely sided with plaintiffs. Her temporary restraining order requires HUD to produce weekly plans explaining how it will meet the September 30 deadline to distribute the grant funding authorized by Congress.

"While HUD may select the grant recipients and make other decisions about how to use or allocate the funds appropriated by Congress, it may not refuse to award those funds altogether," wrote Sooknanan.

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Quick Links

• The Senate Banking Committee unanimously passed the ROAD to Housing Act, setting it up for a potential floor vote by the full Senate. Read last week's deep dive on the bill's supply portions.
• Bloomberg CityLab has a new piece on the explosion of data center construction in Northern Virginia, and the anti-growth anxiety it's provoking among residents.
• Speaking of Los Angeles's wildfire rebuilding efforts, the city's new streamlined permitting process is not as fast as you might think.

LADWP's "one-stop" fire-rebuild permit desk empty. Our staff was told it is staffed by LADWP for only 2 hours a day.

This is expedited rebuilding in LA City. pic.twitter.com/J7oCbooOsd

— Alexis Rivas (@alexisxrivas) July 30, 2025

• Texas landowners on the U.S.-Mexico border face the threat of eminent domain as a result of renewed border wall construction, reports The Wall Street Journal.
• Derek Thompson demolishes the notion that home prices in Dallas are increasing because of consolidation among large homebuilders.