The fight over California’s housing density laws is just getting started. The newest saga features Huntington Beach, the coastal community known for its surfing competitions, conservative politics and now, their “no casitas allowed — ever” stance.

The City Council recently instructed the city to stop processing permit applications for accessory dwelling units (ADUs) and projects submitted under The HOME Act of 2021 – SB 9. At the same time, it directed the City Attorney to take legal action to challenge any and all “laws that permit ADUs.”

This came on the same day California’s Office of the Attorney General (OAG) and Department of Housing and Community Development (HCD) issued letters to the Council urging them to repeal their unlawful ADU moratorium ordinance.

The HOME Act aims to ease the process for homeowners to create a duplex or subdivide their single-family residential lot into up to four units. Now, as permitted by statewide zoning codes, homeowners may:

  • split their lot into two parcels — each parcel may be no smaller than 1,200 square feet and no smaller than 40% of the original lot; or
  • build duplexes — a project containing up to two dwelling units on each single-family parcel. [Government Code 66411.7 (a)]

However, as essentially an elimination of single family zoning, the HOME Act has met opposition from various conservative enclaves across the state, with Huntington Beach the latest bastion to willfully ignore state law.

But Huntington Beach wasn’t done.

Next, the City Council introduced an ordinance to unlawfully exempt the city from the Builder’s Remedy enacted by California’s Housing Accountability Act (HAA). The HAA streamlines approval for low- and moderate-income housing developments in cities which have not produced a compliant housing element to include sufficient low- and mid-tier housing for its residents (and, you guessed it, Huntington Beach does not have a housing element compliant with state laws).

Following the Council’s refusal to heed the OAG’s warning, the OAG sued the city, including a request for the court to issue a monetary fine on the Council members.

As the awareness that state codes really do preempt local ordinances, made clear by the OAG’s legal action, has quickly escalated, the Council is backpedaling. They are now considering a plan to reopen permit applications for ADUs and for parceling under the HOME Act, and amend its Housing Element to comply with state law.

For those counting, this is the second time the state has sued Huntington Beach over housing law violations, the first of which the city settled in 2020 after losing out on millions of dollars in state funding.

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Strict zoning restricts fees

California’s housing crisis is ultimately the result of tight local zoning ordinances, which include restrictive:

  • land use regulations;
  • parking restrictions;
  • lot size minimums;
  • height limitations; and
  • permitting costs and processing times.

With all these restrictions, builders looking for a “sure thing” tend to stick to single family residences (SFRs) on post-WWII lot sizes. With large lots restricted to a single unit on a parcel suitable in all ways for eight residential units, the inefficiencies created have resulted in a reduced housing supply. In fact, each year since 2018 there have been more SFRs constructed in California than multi-family units.

The end result is less housing — an intentional supply-and-demand imbalance — which has led to reduced homeownership, higher rents, and a lower quality of life for California’s owners and renters. Home sales have been in the doldrums for years, and that has hurt those servicing the housing market’s needs.

We need more housing units — not more occupants per unit.

Going forward, housing laws have now shifted from local control to a statewide housing policy. Legislation has focused on loosening zoning, seizing the reins from the hands of vocal not-in-my-backyard (NIMBY) advocates, and allowing private property owners to make their own choices to add an ADU or subdivide their lot — not the city fathers.

But when cities like Huntington Beach seek to sidestep the progress made by the state legislature for residents to live where the jobs are, our population’s housing preferences are artificially stifled.

Demand for more low- and moderate-income rentals is alive and well, even in today’s restrained housing environment which has seen sales volume and pricing plummet from their mid-2022 peak. Further, demand for low- and mid-tier for-sale inventory will rebound soon enough, likely around 2026 when prices will cyclically resume their upward trajectory after reaching a base-value price.

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Real estate brokers understand the state’s anemic housing inventory has only held back transaction volume in recent years — and know that increasing the number of housing units will open up more opportunities for their fee-based brokerage services.

The housing shortage will be solved only when residential construction is allowed to rise to meet the level of demand for additional housing in every neighborhood – no matter its purported social status. This organic growth will gradually occur as California’s Home Act legislation allows builders to catch up — but only when local governments cooperate, voluntarily or by court order.

When city councils are not cooperative, the AG has the tools and the willingness to help homeowners become mini-landlords, free up builders from permit processes barricaded by city councils and allow employees to live where they work.

What’s more, the AG seems hungry for a fight.

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