State laws at stake as one city escalates fight against Sacramento housing policy

Even as the City of Huntington Beach pursues a polarizing fight against builder’s remedy, the City Council opened a second front against the state government with a vote this week to move ahead with a legal challenge to state housing laws SB 9 and 10 and to block local processing of Accessory Dwelling Units applications. 

The directive, which passed with a 4-3 vote, amounted to an escalation of a bigger fight with Sacramento that began weeks ago and is quickly emerging as one of the highest-profile housing disputes California has seen in years.

“We all believe in property rights,” Casey McKeon, a councilman who supported the motion, said during the Tuesday council meeting. “The issue is a matter of local control — it should be incumbent on the residents who live here to decide how they zone their city and if they want to allow ADUs, etc., and not have state mandates that pierce our charter protections and our local control and our home law.” 

“This is just poking the bear — the California bear, if you will,” countered Councilman Dan Kalmick, who opposed the motion. “This is just absolutely not needed.”

SB 9 fight

The council’s ordinance would block the city from processing new permits for ADUs, a move that — while undercutting what has been one of the state’s most successful recent housing initiatives — could also leave some local property owners in limbo, open up the city to litigation and throw a wrench into the city’s ongoing talks with Sacramento over an update to its Housing Element, the state planning document that details the city’s plans to expand housing over the next eight years. 

It also amounts to a new, unexpected attack on SB 9, a law that has perhaps generated more attention than any state housing initiative in recent memory. 

The law, which allows residential property owners to split their lots and build duplexes, and its companion law, SB 10, which allows cities to expedite upzoning near transit sites, were both signed into law by Gov. Gavin Newsom in 2021 amid a flurry of pro-housing legislation and came into effect last year. Before it was enacted, SB 9, in particular, generated a tremendous backlash from some property owners, who argued it would destroy their neighborhoods, as well as dozens of cities around the state, whose leaders argued it was a violation of local authority and in some cases attempted ludicrous defenses against it. 

Yet for all the hoopla to date, the broader impact of the single-family zoning overhaul has proven miniscule: One recent study found that, in the 13 California cities where experts predicted it could have the most impact, its use had been “limited or non-existent.” Last year San Diego, which typically permits several thousand new homes annually, received only seven SB 9 applications. Huntington Beach has reportedly received none. 

It was unclear exactly on what basis the Orange County city plans to contest the law. This week’s motion only directed City Attorney Michael Gates to prepare a legal challenge, and Gates told the council that he would explore a legal strategy and fill members in during a closed session. 

“I would not comment on anything tonight,” Gates said before the vote. “I would come back with more specifics.” 

The city could attempt to invoke special rights because of its status as a charter city, although some California courts have previously ruled that status does not trump the state’s right to implement housing laws.  

“State overreach”

Nevertheless, both the ideology underpinning the city’s new legal challenges — “the biggest reason being state overreach,” Councilman Pat Burns, who brought the motion, said on Tuesday — and the high stakes of the escalating fight, which could potentially set a new precedent cementing or undermining state authority over housing laws, were abundantly clear. 

The Tuesday vote came hours after both the California Department of Housing and Community Development and the state Attorney General’s Office sent strongly worded letters — again — to city officials, and Gov. Gavin Newsom also weighed in, writing in a press release that Huntington Beach “will simply not win.” Assuming Huntington Beach moves ahead with its ordinance, a high-profile legal clash, potentially including suits filed by the state against Huntington Beach, seems all but assured. 

“Today’s letters reflect the latest in a string of troubling actions by the city,” the state Attorney General’s Office said in a statement on Tuesday. 

“This is another blatant attempt to evade state housing law,” added Gustavo Velasquez, the director of HCD. 

The SB 9 and 10 legal challenge comes on the heels of Huntington Beach’s resistance to builder’s remedy, a California provision that allows developers to bypass local zoning in cities that fail to file state-approved a Housing Element plan by the deadline. Currently, most cities in the state, including Huntington Beach, are out of compliance with its Housing Element. The city has not received any project applications citing builder’s remedy.

Partisan rift

The city’s latest motion, as well as the city’s ongoing builder’s remedy fight, have revealed a major rift within the council itself, which elected a new Republican majority in November and this week also moved to ban rainbow flags on city property. On Tuesday council members who opposed the measure openly tore into its language, which included descriptions like the “radical redevelopment” ostensibly caused by the state laws, and warned of the potential costs of a legal fight they view as futile.   

“I’m assuming you read the attorney general’s letter and the HCD’s letter that we received earlier today?” Kalmick, who was endorsed by the Democratic Party of Orange County, told his Republican colleagues ahead of the SB 9 vote. “We’re racking up the fastest number of letters we can get from the state threatening to sue us.” 

The city is on track to pass its local “builder’s remedy ban” around April 1 and could file a separate lawsuit challenging the building provision within weeks.