California Reaches Settlement with City of Fullerton over Violations of Housing Element Law

SACRAMENTO – California Attorney General Rob Bonta, Governor Gavin Newsom, California Department of Housing and Community Development (HCD) Director Gustavo Velasquez, and the City of Fullerton today announced an agreement requiring the city to reach compliance with the state’s Housing Element Law. The city will adopt a plan to allow for the development of 13,209 housing units, of which 5,187 would be low- or very low-income. The agreement, which is in the form of a stipulated judgment, is related to California’s sixth “housing element update cycle” for the 2021-2029 time period.  

Under the state’s Housing Element Law, every city and county in California is required to periodically update its housing plan to meet its share of the regional and statewide housing needs. Fullerton failed to adopt a compliant housing plan for the 2021-2029 time period by the October 15, 2021 statutory deadline. HCD provided direct guidance and reminders to the city — ensuring its leaders were fully apprised of their legal duty to submit a housing element for HCD’s review. As a result of this settlement, the city will now adopt a compliant housing element no later than November 5, 2024, and modernize its zoning code to accommodate thousands of affordable homes by December 29, 2024. Today’s settlement also resolves separate but related claims filed by Californians for Homeownership, Inc.

“California’s Housing Element Law is an essential tool in our fight to equitably address our housing shortage, and local governments must follow the law and do their part,” said Attorney General Rob Bonta. “I applaud the Fullerton City Council, and its planning and legal team, for recognizing that public resources should be directed at collaborating, rather than further litigating, our way out of California’s housing crisis. By working together, California can achieve our goal of ensuring that every city provides more affordable housing options to Californians in need.” 

“Fullerton has committed to stop litigating and start building. California is facing a housing crisis, and the status quo is simply unacceptable,” said Governor Gavin Newsom. “More communities must step up and do the right thing by building their fair share of housing or be held accountable.”

“The City of Fullerton is more than two years late in adopting a compliant housing element, but this agreement lays out a clear path to compliance with milestones, as well as consequences if they fail to meet those commitments,” said California Department of Housing and Community Development Director Gustavo Velasquez. “HCD takes enforcement of our state housing laws seriously. We are committed to helping Fullerton and cities and counties across the state adopt and implement prohousing policies, and we are focused on ensuring we each do our part to address the housing needs of Californians at all income levels.” 

"We filed our lawsuit against Fullerton because it had become clear that the City needed a strong push to restart its housing element process and get the job done," said Californians for Homeownership attorney Matthew Gelfand. "This settlement realizes that goal while allowing the City enough time to put together a strong plan to build housing affordable for families at all income levels. We are grateful to Attorney General Bonta, Governor Newsom, and HCD for inviting us to participate in this global settlement of our litigation and the state's." 

State law requires local governments to include housing elements in their general plans, which serve as a “blueprint” for how the city and/or county will grow and develop. A housing element must include, among other things, an assessment of housing needs, an inventory of resources and constraints relevant to meeting those needs, and a program to implement the policies, goals, and objectives of the housing element. Once the housing element is adopted, it is implemented through zoning ordinances and other actions that put its objectives into effect. The housing element is a crucial tool for building housing for moderate-, low-, and very low-income Californians and redressing historical redlining and disinvestment. 

Fullerton failed to adopt a housing element on time, and then took no action for over a year after it received a letter from HCD finding that its draft did not substantially comply with the Housing Element Law. HCD contacted and met with the city on several occasions and ultimately, due to the lack of compliance, referred the matter to the California Attorney General’s Office for enforcement.

Under the settlement:

• Fullerton will adopt a compliant housing element by no later than November 5, 2024. The housing element process is typically lengthy — for example, local governments must meet certain public participation requirements and HCD must review every local government’s housing element to determine whether it complies with state law and provides written findings back to each local government. However, Fullerton has agreed to an expedited timeline while ensuring the public’s participation.
• Fullerton must modernize its zoning code by December 29, 2024, in order to meet the housing targets set forth in its compliant housing element.
• Fullerton agrees to comply with the Affirmatively Furthering Fair Housing statute (AFFH). AFFH requires local governments to take meaningful actions that overcome patterns of segregation and foster inclusive communities, free from barriers that restrict access to opportunity based on protected characteristics. 
• Fullerton acknowledges that, until the time it adopts a substantially compliant housing element, it will not deny housing projects on the basis of zoning or general plan inconsistencies.
• If Fullerton fails to abide by the settlement and does not cure its default, it may lose its authority to approve or deny certain types of development, or be ordered to take specific actions that maximize its ability to fulfill its Regional Housing Needs Allocation obligations, with an emphasis on facilitating homes for households earning below the area median income. Additionally, monetary penalties will be imposed if Fullerton remains noncompliant 12 months after the effective date of the stipulated judgment.

A copy of the petition and proposed judgment, which details the settlement terms and remains subject to court approval, can be found here and here.