Mounting penalties against Huntington Beach should be put on hold while state officials review the city’s updated housing element, an Orange County Superior Court judge said in a tentative ruling this week.
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In May, Judge Katherine Bacal had ordered Huntington Beach to pay a late fee of $10,000 a month, going back to Jan. 1, 2025, and until it met state requirements — a total of $170,000 as of May — for failing to do its part to address regional housing needs.
If the Huntington Beach City Council had not updated its housing plan by May 28, the fine was set to increase to $50,000 a month. After six months of noncompliance, the court had the option to increase the penalties sixfold and appoint a receiver to strip the city of its local zoning control.
To avoid accumulating more fines for violating state mandates, the City Council approved a new housing element by the deadline that it said would accommodate the construction of more than 13,000 units by the end of the decade.
The plan has been submitted to the California Department of Housing and Community Development, which will determine whether it is in “substantial compliance” with state housing mandates.
In her tentative ruling released Thursday ahead of a court hearing Friday, Bacal said imposing more fines on the city while its new housing plan is under review “does not serve the purpose” of the state housing law.
“On the other hand, if HCD determines that there has not been substantial compliance and the violation cured,” Bacal wrote, “penalties would be due as previously ordered, and further penalties could be imposed from the date of the original hearing.”
Deputy Attorney General Matthew Struhar, representing the state, argued during Friday’s hearing that despite the city’s recent adoption of a new housing element, Huntington Beach remains legally out of compliance with state housing laws. He cited a court order from June 2024 that gave the city one year to finish all required actions, including rezoning.
With that deadline now past, he argued the court is required to impose additional penalties until the city achieves compliance.
“The penalty itself cannot be avoided until the city actually achieves compliance with the housing element law, which, as a matter of law, they have not done because they have not completed the rezoning,” he said.
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But Anthony Taylor, an attorney for the city, argued the court has discretion to withhold penalties because the municipality recently adopted a housing element and is actively working to rezone within the 120-day period allowed by state law. He also said it would be impractical to finish rezoning before HCD determines whether the underlying plan is compliant.
“We don’t even have any kind of sign-off from HCD. My understanding is city staff just heard from HCD for the first time since adopting the housing element update this week,” Taylor said. He told the judge the city is “acting in good faith” and asked Bacal to make the tentative ruling final.
Bacal pressed the state’s counsel to explain how the city could complete its required rezoning before the HCD could determine whether the plan was compliant.
“The whole basis for penalties is to coax, as you say, compliance, right?” she asked.
Struhar answered that the state considers compliance when everything is in place.
Bacal said she would release a final written ruling in the next few days.
In a filing last month, the state asked the court to fine Huntington Beach up to $100,000 more a month for failing to complete the required zoning changes needed for a compliant housing element. The fines collected would be put into a trust to support affordable housing production and increase home ownership opportunities statewide, officials said.
Housing elements do not require cities to be the builders of the mandated housing units, but to have in place the zoning and conditions that would allow developers to construct projects to help meet needs in the state. The housing elements look at a decade at a time, so the next cycle will be coming up in a few years.
Attorney General Rob Bonta initially sued Huntington Beach in 2023 for refusing to adopt a compliant housing plan that had been due in October 2021. The city, which argues as a charter city is not required to participate in the state’s mandates for housing, filed a federal lawsuit against the state, but lost in a lower court and a federal appeals court.
In December, the US Supreme Court declined to reconsider the trial court’s decision, dealing a final blow to the city’s long-running battle against the state.
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