Challenge To State’s Mandates That Cities Meet Homebuilding Goals Initiated In Orange County

Somewhat more belatedly than many thought would be the case, a group of Southern California cities have taken the first meaningful and concerted steps toward contesting the State of California’s usurpation of what has traditionally been local land use authority.
Traditionally in California, as virtually everywhere else in the United States, control over construction and development has been vested with local government. The state has building and safety standards which are enforced by both local and state authorities, but planning processes take place generally in California at the municipal and county levels, with the federal and state governments having qualified autonomy on development issues on state-owned and federal-owned land. Land use authority falls within the purview of county government in the unincorporated county areas outside the jurisdictions of towns and cities. Within city/incorporated town limits, that control is exercised by the cities and towns themselves. At the county level, the ultimate land use authority is the board of supervisors and in cities and towns the city or town councils, although at their discretion those panels can delegate to their respective planning commissions the authority to grant a project applicant an entitlement to build.
Under this arrangement, theoretically and for the most part practically, through their elected leadership local residents had some level of control with regard to the tenor of development, its intensity, its quality, its mix, its character and nature, and its density.
In recent years, the cost of housing in California has escalated dramatically. At the same time, the incidence of homelessness has increased. This has prompted state elected and staff officials to seek to induce more intensified home building.
While until quite recently there has been an upswing in the number of people living in California, there is some difference of opinion among the population as to whether intensifying the development of more homes is a sensible response to the general situation. Some have argued that more homes are needed to accommodate the greater influx of people to the Golden State. Others, citing what they consider to be a diminution in the quality of life as the population increases, argue that efforts to limit or end population growth in California is the more sensible approach to the issue.
In 1900, California had a population of 1,490,000. Throughout the first half of the 20th Century, the number of California’s residents grew steadily, at between an annual increase of no less than 1.17 percent [in 1933] and as much as 8.87 percent [in 1943]. In 1950, the number of residents in California stood at 10,677,000. By 1960, California’s population swelled to 15,870,000. In 1962, upon reaching 17 million strong, California surpassed New York to become the most populous state. In 1970, it boasted 19,971,069 citizens. In 1980, California’s population reached 23,800,800, and in 1990, 29,950,111. At the dawn of the Third Millennium, there were 33,987,977 men, women and children in the state. In 2010, the state population stood at 37,319,550.
At least since 1960, homelessness in California has been a burgeoning problem, the seriousness of which began to escalate in the 1990s. Homelessness became more acute with the economic downturn of 2007 to 2013. In the Spring of 2018, there were an estimated 134,000 homeless people in California. Roughly 0.4 percent of California’s population is homeless. California represents approximately 12 percent of the U.S. population. California at that same time hosts 22 percent of those homeless in the United States, and it is the leader among all states in both percentage and sheer numbers of those who have no homes.
Still, encouraging homebuilding in California, where the average cost of homes is approaching $450,000, is not likely to be of any assistance to the existing or future homeless population, as those so situated have essentially demonstrated themselves as being utterly incapable of purchasing or hanging onto homes that were valued at less than half of that within the last two decades.
More than four decades ago, there emerged a trend at the state level toward an overarching regional and statewide control of development regulation, in particular residential development regulation, with an eye toward increasing the amount of housing stock to accommodate California’s burgeoning population.
Beginning in 1980, the State of California has, pursuant to California Government Code §65580, required each jurisdiction in the state to plan for its share of the state’s housing need for people of all income levels. Under the so-called Regional Housing Need Allocation process, a determination is made of what number of dwelling units according to affordability type each community is to accommodate over an eight-year period. This allocation process consists of two steps. In the first, the California Department of Housing and Community Development determines the total housing need for each region in the state. Second, each region’s joint planning authority ascertains how the various jurisdictions within that region are to meet that need, which in practical terms means mandating each city plan to construct what the planning authority’s staff deems to be each municipal entity’s share of that house-building burden.
In Southern California, the Southern California Association of Governments, which goes by the acronym SCAG, serves as the planning agency for the six-county area that includes Los Angeles, Orange, Riverside and San Bernardino, Imperial and Ventura counties. At present, the ongoing fifth cycle regional housing needs assessment for SCAG, adopted in October 2012 and covering the housing element planning period October 2013 to October 2021, during which the seven county SCAG regional planning area had been called upon to plan for slightly more than 412,000 new homes, is approaching its end.
In September 2019, SCAG, mandated by the state government to accommodate the construction of 1,341,827 housing units over the next eight-year planning cycle between 2021 and 2029, laid out its tentative numbers for each county and each city within those six counties. A year later, those final numbers reflected that Imperial County would need to build 15,956 dwelling units of all sorts in the 2021-2029 period, Los Angeles County would need to build 813,082 units, Orange County 183,430 units, Riverside County 167,177, San Bernardino County 137,786 units, and Ventura County 24,396 units.
In a letter of protest dated September 18, 2019 to Doug McCauley, the acting director of the California Department of Housing & Community Development, Kome Ajise, the executive director of the Southern California Association of Governments, put on record his association’s “formal objection to the California Department of Housing & Community Development’s regional housing need determination.”
Ajise noted that the Southern California Association of Governments “is fully aware that the State of California is in the midst of a housing crisis and that resolving this crisis requires strong partnerships with state, regional and local entities in addition to private and non-profit sectors. As such, the Southern California Association of Governments desires to be an active and constructive partner with the State and HCD (the Department of Housing & Community Development) on solving our current housing crisis, and this objection should not suggest otherwise. We are in fact currently setting up a housing program that will assist our local jurisdictions on activities and policies that will lead to actual housing unit construction.”
Nevertheless, Ajise wrote, “One of our major concerns is that HCD did not base its determination on the Southern California Association of Governments’ Regional Transportation Plan/Sustainable Communities Strategy Growth Forecast, which was inconsistent with Government Code 65584.01(c)(2)(A). Another major concern is that pursuant to Government Code 65584.01(c) (2) (B), the Department of Housing & Community Development’s determination of housing need in the Southern California Association of Governments region is not a reasonable application of the methodology and assumptions described in statute. Specifically, the Department of Housing & Community Development compared household overcrowding and cost burden rates in the Southern California Association of Governments region to national averages rather than to rates in comparable regions as statutorily required. The Department of Housing & Community Development seemingly uses unrealistic comparison points to evaluate healthy market vacancy, which is also an unreasonable application of the methodology and assumptions.
”While the Southern California Association of Governments disputed the methodology the state used in deriving its numbers, it pointedly did not contest the state’s authority to override the local agencies’ autonomy in setting their own development regulations, zoning standards and population saturation levels,” Ajise’s letter continued. “Nor did the association contradict the overarching need to make the population increase provisions set forth by the state.
“I would like to note that SCAG’s objection focuses on the process and adherence to state housing law requirements and not necessarily to the regional housing need determination number,” Ajise wrote. “The ultimate aim of this objection, as discussed at length by the regional council, is to ensure the most technically and legally credible basis for a regional determination so that the 197 local jurisdictions in the Southern California Association of Governments region can approach the difficult task of zoning to accommodate regional needs with the backing of the most robust and realistic target that is possible.”
SCAG staff made its case that a more accurate, practical and reasonably attainable figure for the SCAG planning area’s housing needs for the next decade was 921,000 dwelling units, translating to 736,800 units during the eight-year October 2021-to-October 2029 planning cycle.
Most cities in Southern California, reasoning that it would do no good to try to fight the state, merely knuckled under to the Department of Housing & Community Development’s regional new 1,341,827 housing unit construction mandate. Forty-five cities in the region, however, engaged in that appeal, in which they were collectively represented by SCAG staff. Those cities included Agoura Hills, Alhambra, Bellflower, Beverly Hills, Cerritos, Downey, El Monte, Gardena, Huntington Park, Lawndale, La Mirada, Lakewood, Los Alamitos, Pasadena, Pico Rivera, Rancho Palos Verdes, Redondo Beach, San Dimas, San Fernando, San Gabriel, Southgate, South Pasadena, Temple City, Torrance and West Hollywood in Los Angeles County and the County of Orange, Costa Mesa, Fountain Valley, Fullerton, Garden Grove, Huntington Beach, Irvine, Laguna Beach, Laguna Hills, La Palma, Mission Viejo, Newport Beach, Rancho Santa Margarita, Tustin, Westminster and Yorba Linda in Orange County, along with the County of Riverside and Hemet in Riverside County. In San Bernardino County, Fontana, Chino Hills, Chino and Barstow were intrepid enough to challenge the state. Barstow asked the state to cut its 1,516 house-building mandate by 58 percent to 635; Chino Hills requested 1,797 units in lieu of 3,720, a 52 percent reduction; Chino wanted a 49 percent cut from 6,961 to 3,564; and Fontana insisted that the 17,477 units it was being asked to accommodate was 30 percent too optimistic, and it requested that its mandate be reduced to 10,563.
On October 9, 2019 Governor Gavin Newsom signed 18 bills intended to deal with housing needs in California, including ones his office said were “designed to help jumpstart housing production.” The bills signed included Senate Bill 330, legislation aimed at removing local barriers to housing construction to speed up new development by simplifying permitting and approval processes, ensuring no net loss in zoning capacity and limiting fees after projects are approved, along with Assembly Bill 1763, which created more affordable housing by giving 100 percent affordable housing developments an enhanced density bonus to encourage development, and Assembly Bill 1485, which further streamlined environmental law and encourages moderate-income housing production. The provisions contained within those several pieces of legislation eradicated limits on residential density; provided developers of affordable housing so-called “bonus units,” meaning they can exceed the number of units per acre many cities impose on housing projects; forced cities to permit garages and carports to be converted, or demolished, to accommodate accessory dwelling units sometimes known as “granny flats”; and limited the amount of parking spaces a city can require when approving residential developments.
The appeals and protests of local officials in the face of the state government’s presumed authority fell essentially on deaf ears, and the 736,800-unit alternative to the 1,341,827 housing unit goal SCAG was promoting was rejected by the state.
With the discretion that local jurisdictions formally had in controlling what is to be built within them in large measure compromised, segments of the population began to despair of the ability of an individual or a collective community to control quality-of-life issues within their neighborhoods and communities.
On May 27, 2021, the Orange County Council of Governments, representing 34 municipalities and led by its chairman, Anaheim Councilmember Trevor O’Neil, resolved to sue the California Department of Housing & Community Development over the home-building mandate issue.
On June 21, the Orange County Council of Governments made good on that resolution, filing suit in Los Angeles Superior Court. The suit names Gustavo Velasquez, the interim director of the California Department of Housing and Community Development, the California Department of Housing and Community Development; and unknown parties one through 50. The Southern California Association of Governments is named as a real party in interest.
The suit alleges that SCAG and the California Department of Housing and Community Development used a methodology for deriving its Regional Housing Needs Assessment that was flawed insofar as “the California Department of Housing and Community Development did not base its Regional Housing Needs Assessment determination on SCAG’s regional population forecast as stated in its Regional Transportation Plan/Sustainable Community Strategy” and instead “utilized the California Department of Finance’s projection, in violation of statutory law.”
More specifically, according to the writ, “The California Department of Housing and Community Development utilized unreasonable comparison points to evaluate healthy housing market vacancy rates, in that it utilized a 5 percent total vacancy rate, rather than a 5 percent rate for the rental housing market and a more realistic standard for the for-sale housing vacancy rate,” which according to the writ is most likely “1.5 percent, which has been the average for for-sale housing since the 1970s.”
Furthermore, according to the writ, “The California Department of Housing and Community Development’s evaluation of replacement housing needs was based on an arbitrary internal standard, rather than housing demolition data provided by California Department of Finance. The California Department of Housing and Community Development did not exclude anticipated household growth on tribal land, despite the fact that tribal lands are sovereign nations and not subject to state land use law.  The California Department of Housing and Community Development (HCD) utilized an unreasonable adjustment for cost burden statistics. The California Department of Housing and Community Development’s data and use of data were not current.”
The writ maintains that “SCAG provided a proposed alternative Regional Housing Needs Assessment (RHNA) determination, as well as an analysis of why the proposed alternative would be a more reasonable application of the methodology and assumptions to be used by HCD to determine SCAG’s RHNA. According to SCAG’s proposed alternative determination, the RHNA determination for the SCAG region should be between 823,808 and 920,772 dwelling units.”
In this way, according to the writ, “The 1,341,827 total dwelling units represents more than twice the number of projected housing units needed by the end of the 6th Cycle in 2029, which is estimated to be only 651,000 housing units. Thus, more than half of the California Department of Housing and Community Development’s Regional Housing Needs Assessment determination for the SCAG region is due to the California Department of Housing and Community Development’s use of the wrong population forecast, comparable region, and vacancy rates, as well as new methodology that includes overcrowding and cost burdening factors that the California Department of Housing and Community Development did not previously consider in its typical methodology for prior housing cycles.”
The Orange County Council of Governments’ action seeks a peremptory writ of mandate directing the California Department of Housing and Community Development to vacate and set aside its Regional Housing Needs Assessment determination for the SCAG region, that it change the input of information utilized in calculating its Regional Housing Needs Assessment determination, and that it conduct a new assessment for the Southern California Association of Governments region in compliance with state local planning laws under Government Code section 65580 et sequitur.
According to the writ of mandate, the state’s 1,341,827 housing unit goal is grossly inflated, and overestimates by more than 690,000 the actual number of new homes needed in the region by October 2029. The more realistic number of dwelling units called for is roughly 651,000, according to the suit.
“The California Department of Housing and Community Development stands by the credibility and legality of its Regional Housing Needs Determinations for the sixth cycle housing element throughout the state, and contends that the methodology accurately captures housing needs in compliance with legislation passed in 2017 and 2018,” said Alicia Murillo, a communications analyst with the California Department of Housing and Community Development in Sacramento.
Meanwhile, according to the best data available, California’s population is now decreasing. In 2017, the state saw an increase of 0.48 percent over the previous year, to 39,337,785. In 2018, the state’s population grew to 39,437,463, an 0.25 percent increase. In 2019, however, the state population grew by only 147, going to 39,437,610. Mathematically this meant growth of less than 0.00 percent. In 2020, California’s population dipped to 39,368,078, a drop of 0.18 percent.
As a result, those opposed to the state’s home building mandates are asserting the requirements that local jurisdictions build more houses should be dispensed with entirely.
-Mark Gutglueck

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