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Two Lawsuits Show What a Hot Mess California Housing Politics Is Right Now

How much power does the state of California have to force NIMBY localities to build more housing?

Mike Blake/REUTERS/NewscomMike Blake/REUTERS/NewscomCalifornia housing politics is heating up with a pair of dueling lawsuits that could make or break the state's ability to force local governments to allow more housing construction.

Gov. Gavin Newsom kicked things off on Friday by announcing a lawsuit against Huntington Beach, a wealthier beach town in Orange County, claiming that the local government there had failed to zone for enough housing.

"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," said Newsom in a press release.

Longstanding state law requires California cities to produce what are known as housing elements, basically zoning plans that lay out how much residential construction the city is going to allow. Officially the state's Department of Housing and Community Development (HCD) can reject these housing elements if they think they don't permit enough housing, but that power has long been considered toothless.

At least until 2017, when the California Legislature passed AB 72, which gives the state enhanced powers to sue localities that fall down on their housing responsibilities.

Which is exactly what Huntington Beach has been accused of doing. In 2015, the city backtracked on its state-approved housing element, cutting the number of high-density housing units it had zoned for from 4,500 to 2,100. That decision saw the state HCD retract its prior approval of Huntington Beach's housing element. The city has technically been out of compliance with state law ever since, with the city council there rejecting multiple plans to zone for more housing.

Newsom's lawsuit, the first of its kind, thus serves as kind of test for the new enforcement powers created by AB 72, and a way for the new governor to signal that he is willing to do what it takes to address the Golden State's housing shortage.

There might also be an element of vengeance to Newsom's lawsuit as well.

On Monday, news broke that Huntington Beach itself had filed a lawsuit against the governor over another state housing law, SB 35, which allows developers to opt into a streamlined state approval process for new projects if the locality they're trying to build in has failed to zone for enough housing.

The law has already been invoked by a number of developers to get their projects passed by hostile local governments. Obviously local governments relucant to build more housing don't like that.

SB 35 is "an unconstitutional overreach by the State into the City's constitutionally protected local land use powers," reads Huntington Beach's lawsuit, arguing that its status as a charter city gives it a wide degree of autonomy over "municipal affairs" like housing development.

Defenders of SB 35 counter that the local control over zoning has produced a housing shortage so severe that these land use issues have essentially become a statewide concern.

"Huntington Beach's dismissive approach to housing—claiming there is no problem and that the state should just mind its own business—is Exhibit A for why we have a crisis in this state," said State Sen. Scott Weiner (D-San Francisco), the author of SB 35, in a statement.

It's easy to get lost in the legal and policy weeds here, but the two lawsuit both hit at a basic (and pretty important) question: how much power does California's government have to force municipalities to allow for more housing construction?

A decision in these cases would impact the scope of existing state powers, but could also make or break future efforts at reform.

Working its way through the state legislature currently is SB 50 (I know, I know, another bill number) which would forcibly upzone large swaths of California's cities, paving the way for more––and more dense––housing construction.

Should Huntington Beach's lawsuit succeed, that could prevent legislators from forcing this upzoning on the state's charter cities.

To be sure, this whole legal fracas does not present a libertarian side to root for. Obviously local government limitations on residential construction boil down to limitations on both property rights and the supply of new, desperately needed housing.

That said, state-approved, court-enforced plans about how much housing the state needs, what form it should take, and where it should be built are not all that free market either—even if they are, on the whole, less restrictive.

That's especially true when one considers that many see state-enforced upzoning as a way of allowing for more publicly-subsidized, rent-controlled "affordable housing" projects to be built. (A recent Reason investigation found that these kinds of projects are hugely expensive and can get easily get hijacked by political interests.)

Given how little of the conversation about housing in California revolves around property rights concerns, however, state-led efforts to peel back local restrictions on new construction—as messy and imperfect as they are—are probably the best hope the Golden State has of getting housing costs under control.

Newsom's lawsuit, if successful, would thus prove to be a marginally positive development in the state's housing politics; Huntington Beach's would be a huge step back.

Photo Credit: Mike Blake/REUTERS/Newscom

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  • Don't look at me!||

    We all know how it's gonna turn out.

  • loveconstitution1789||

    Speaking of "turn out", Gov. Gavin Newsom looks like quite the twink whore.

  • loveconstitution1789||

    Houses? We don't need no stinking houses.

    The illegals are there to vote Democrat, work plantations farms, and accept Lefty scraps.

  • Sevo||

    'which gives the state enhanced powers to sue localities that fall down on their housing responsibilities."

    What "housing responsibilities" do cities have?
    Sorry, I'm just not about to let that pile of 'newspeak' pass.

  • middlefinger||

    Good comment Sevo. The question I am asking is "Where do the responsibilities End"? I believe the answer to that is Eminent Domain (Leftie econoblogs mention eminent domain and the U.S. obsession with physical property rights constantly). If a city or locality is not living up to its housing responsibilities, its only a matter of time to place economic responsibilities, job creation responsibilities, water rationing responsibilities, calories per person responsibilities, energy consumed responsibilities on, well, everyone.

  • Kevin Smith||

    If cities are going to create and enforce zoning laws they have a responsibility to do so with competence

  • a ab abc abcd abcde abcdef ahf||

    What a farce! Absolutely typical. The proper answer is No Land Zoning. But because politicians want to meddle, they pass laws which they think will substitute for markets; they are wise and know everything and can out-think thousands and millions of people.

    Then other politicians come along and dispute the first set of market substitutions with their own set of market substitutions.

    Soon a third set will enter the fray, and a fourth, ad infinitum. Tempers will flare, market substitutions will proliferate, and all the while, ordinary people try to guess how the real markets are adjusting to these distortions, much as people near rivers have to guess how new dams, both upstream and downstream, will disrupt their lives.

    And all it would take to fix it is get rid of all the market substitutions. But that will never happen as long as coercive government creates room for political maneuver.

  • BILKER||

    It would be easy to curtail all the legal wrangling if the laws stated that whatever politician authors a bill regarding zoning law that exact same law will prevail in his neighborhood. You force a city to build hi density housing the same hi density housing goes into your neighborhood, hopefully next door to them. Elites get to live with the rest of us here in this socialist haven.

  • Ryan (formally HFTO)||

    What's sad is the fall of California will include a massive bailout by the other 49 states, and all the morons who voted to make it a shithole will go elsewhere to create new shitholes. That's how parasites, I mean leftists, spread.

  • Rossami||

    "How much power does California's government have to force municipalities to" do anything is an interesting legal question.

    For questions of federal law and the Constitution, the answer is clear. Municipalities are considered subordinate elements of the state government with no independent legal authority. That means states have complete and absolute control over municipalities. It also means that states are completely responsible for municipalities' debts and other failures. Again, in the context of federal or constitutional law.

    For questions under state law, the answer is also pretty clear. What the state legislature can give, it can also take away. So if the state says in one law that municipalities can do X but another law says they can't, the courts have to sort out which law superceded the other. But either way, the state definitely gets to make the call.

    Only for questions under the state constitution does this get complicated. If the state constitution grants an authority to municipalities, the legislature cannot take away that authority without amending their state constitution. California Constitution Article 11 does grant local governments specific powers. I'm not seeing the independence necessary for the legal argument above, however. On the contrary, I'm seeing repeated references to subordination to "general laws".

    But it is California so who knows what gyrations their supreme court will twist themselves through for their desired political outcome.

  • Rat on a train||

    I bet it is a dispute over Article 11 Section 5 (a)
    It shall be competent in any city charter to provide that the city governed thereunder may make and enforce all ordinances and regulations in respect to municipal affairs, subject only to restrictions and limitations provided in their several charters and in respect to other matters they shall be subject to general laws.
    Is zoning a municipal affair?

  • Curly4||

    Here is an area which maybe handled on the national level. If this was on the national level it could direct population growth to areas that need it and away form areas that is overdeveloped. So maybe it is time for the federal government takes more control over the local in preparation for the time when there is just a single government world wide.

  • Rat on a train||

    Zip code lottery. Damn. I got 99723.

  • JoeB||

    Curly, this is a LIBERTARIAN site. Please look it up.
    Otherwise, the whole setup of these SB laws is cronyism front, back, and center, including Dem pols, unions, developers, etc. They all cash in, buy votes, extend power, by stuffing high density housing projects into small communities who have tried to escape the CA curse while remaining in CA. Eventually, the last few decent school districts will also turn to sh*t. Oh well.

  • middlefinger||

    "To be sure, this whole legal fracas does not present a libertarian side to root for. Obviously local government limitations on residential construction boil down to limitations on both property rights and the supply of new, desperately needed housing."

    I disagree. Desperately needed housing--I believe The Kelo eminent domain case was held on desperately needed economic development, jobs.

    Tyranny from the State versus annoying virtue signaling NIMBYs. No contest here.

  • BILKER||

    "desperately needed economic development, jobs." Getting rid of ILLEGAL IMMIGRANTS living and working in Kalifornexico will go a long way toward relieving job scarcity and housing shortage.

  • Fats of Fury||

    Why all the hoopla? Just get a Federal judge to order Huntington Beach to build low cost housing. It worked in Yonkers.

  • Erisian||

    "...why we have a crisis in this state," said State Sen. Scott Weiner (D-San Francisco), the author of SB 35..." I wonder if Mr Weiner has considered cleaning up his own backyard, housing costs in San Francisco and in Silicon Valley next door are way more than most areas in Southern California.

  • buybuydandavis||

    "There might also be an element of vengeance to Newsom's lawsuit as well."

    Welcome to the One Party state.

    Funny. Orange County sounds familiar as one of Republican holdout counties in the People's Republic of CA.

  • middlefinger||

    This is not about free market housing, this is 'affordable' housing. Reason neglects to mention this minor tidbit of info. Reason do you know what this means for current property owners and taxpayers? It means double or triple water and energy bills (low income energy assistance), higher crime, worse schools, higher property taxes for schools and more gridlock than already exists.

    Reason is going off da rails for open borders!

  • BILKER||

    until Kalifornexico removes ALL zoning restrictions in the cities in which Newsome, Feinstein, Pelosi, Harris and all the rest of the commrades controlling the states political offices and allow HEAVY multiple housing construction they should not be allowed to meddle in other cities zoning. I'd love to see a 100 unit section 8 built on Newsomes next door lot. Better yet on their vineyards properties.

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