Column: To fight the housing shortage, California is right to come down hard on Huntington Beach

You almost have to feel sorry for the city fathers of Huntington Beach. Almost.

City Council members tried, for a while, to do the right thing by state law. In 2013, they approved a housing plan that conformed to state requirements for the construction of affordable housing.

Then, in 2016, after being confronted by furious homeowners complaining about over-building in their fair city and “negative neighbors” and “slums, crime, and disease,” they folded by amending the housing plan so it was no longer in compliance.

State officials warned them last year that there would be consequences for flouting the law, including the loss of what could be hundreds of thousands of dollars, even millions, in state, federal and regional funds.

Huntington Beach thumbed its nose at the threat. Gov. Gavin Newsom urged the state attorney general to sue the city to enforce the state’s housing policy. So now it finds itself defending against not one, but two lawsuits, including the one filed by the state on Jan. 25, and paying for a third lawsuit it filed against the state on Jan. 17 as a preemptive strike.

Let’s put it on the line: The state has a housing crisis — not an “alleged housing shortage” as the city labels it — and Huntington Beach has refused to do its part to address it. Indeed, the city has doubled down, claiming in its own lawsuit that the state’s attempt to command its compliance with a statewide housing mandate violates the city’s right under the state constitution to manage its own zoning laws.

“Sacramento has passed a lot more aggressive housing bills,” says Huntington Beach City Atty. Michael E. Gates. “They’ve gotten more ambitious and more overreaching, and Huntington Beach is pushing back.” He says the state may be trying to make an example of his city because Huntington Beach has prevailed, for the moment, in a lawsuit challenging California’s “sanctuary state” protections for immigrants in the country illegally. “I think we’re on their radar screen,” Gates says.

Newsom’s legal stance reflects the fact that the state’s housing shortage is palpable. According to the most recent survey by the state Department of Housing and Community Development, California will need to build 180,000 homes per year through 2025. It has been building 80,000. The current deficit of needed housing in the state is about 3.5 million units, with little hope of closing the gap soon.

The strain is hardest on rental housing for moderate- and low-income residents, most of whom pay more than 30% of their income toward rent (the standard for “unaffordable” housing) and a third of whom pay more than 50%. Things are even worse in Huntington Beach, according to the city’s own assessment: Nearly three-quarters of its lower-income renters spend more than half their income on housing.

The need for more low- and moderate-income housing in Huntington Beach is hardly a secret. “The business climate and business growth in Huntington Beach is based on the tourism and leisure and hospitality industries,” says Cesar Covarrubias, executive director of the Kennedy Commission, an affordable housing advocacy organization that sued the city in 2015 over its lack of a housing plan. (The case is still in court.) “When the business community is focused on that type of growth, there has to be a response on the housing side.”

Indeed, the city acknowledged in its own 2013 housing plan that one-third of its primary employment was in “lower paying retail, hospitality, construction and service related industries,” earning wages “generally below the level necessary to afford to live in the city.” Huntington Beach takes its ambition to be known as a destination beach resort seriously — it even got involved in a dispute with Santa Cruz in 2005 over which community had the right to the trademark “Surf City USA.” Huntington Beach won.

This community importing low-wage labor for its economic benefit is one of the more affluent and least diverse in the state. Its median income is $88,079, according to the U.S. census, compared with $67,169 for the state as a whole. Its median home price is $688,700 (California: $443,400); its African American population is 1% (California: 6.2%); and its Hispanic population is 17.1% (California: 37.6%).

Under state law, every community is required every eight years to update its roadmap for meeting regional housing needs, which typically are apportioned among the cities by regional planning agencies. In the case of Huntington Beach, that’s the Southern California Assn. of Governments, which assigned the city responsibility for 1,353 new units for 2014-21. Of those, 533 were to be reserved for low- and very low-income residents.

The city’s responsibility under the law is to identify sites for the housing and encourage higher-density development through zoning and building regulations. Huntington Beach’s initial solution focused on its so-called Beach and Edinger Corridors, a 459-acre zone of mostly commercial strip mall development extending south and west from those boulevards’ intersection near the 405 freeway.

City planners saw the corridors as the right place for mandated housing. Their corridor plan had no residential density restrictions, allowed buildings up to six stories, had minimal requirements for residential parking and had a “streamlined” development review process of only about four months.

The maximum number of new housing units would be 4,500, sufficient to meet the city’s housing quota. The city adopted the corridor plan in 2010 and incorporated it in its 2013 housing plan. The state blessed it as meeting the legal mandate.

Then the trouble started. Residents peppered council members with complaints about apartment buildings, traffic on Beach Boulevard (a major route from the freeway to the oceanfront) and the loss of community atmosphere from the construction of apartment dwellings. Some complaints came from residents of single-family tracts toward the north end of Beach Boulevard, who might have legitimate concerns about sharing their neighborhoods with apartment dwellers. But some came from residents who lived miles away — in fact, some seemed to reside closer to the Costa Mesa line than to the Beach-Edinger corridors.

“The city originally thought it could absorb it,” Gates, the city attorney, says of the housing mandate, “but then there were so many big developments springing up.”

The city amended the housing plan in 2015 to reduce the maximum housing units in the corridors to 2,100 from 4,500 and imposed stringent regulations on any units exceeding the new limit. Those regulations could drive permit costs over $300,000, according to the Kennedy Commission lawsuit.

“They stopped development,” Covarrubias told me. Because 1,900 new housing units already had been approved in the corridors and an additional 172 had permits pending, the remaining availability of low-income housing in the zone is only 28 units.

Housing advocates say the city’s behavior underscores a fundamental flaw in the state’s housing policy: It has placed responsibility for residential development in the hands of local officials whose political fortunes are hostage to local voters who organize to oppose construction of apartment buildings, especially for lower-income residents.

“Huntington Beach is a good example of why we need stronger state standards” for housing construction, says state Sen. Scott Wiener (D-San Francisco), “because it’s gone into political paralysis over housing.”

“We have put our mayors and city council members in a position where they’re expected to vote on projects that could imperil their political future,” Wiener, the author of one of the 2017 laws allowing the state to take control of the development approval process for housing in communities that don’t meet their obligations, told me. “We as a state have to give cover to local elected officials by creating rules that govern how housing is addressed.”

As Wiener observes, Huntington Beach may not be unique — about 50 cities around the state also are in noncompliance with their housing mandates — but it’s an extreme case in that it’s out of compliance with its mandate for housing at all levels of income, and hasn’t taken steps to get it right.

“There are cities that are completely blowing off their responsibilities,” Wiener says, “cities that are paying lip service, and cities that are trying to do the right thing. Huntington Beach is one that isn’t taking its responsibilities seriously.”

Gates claims that the city has made “tremendous progress” in meeting its mandate for affordable housing, but that’s questionable. He told me the city had reduced its shortfall under the state mandate to about 400 from 1,353 — but the latter figure applied to all mandated new housing, according to the Kennedy Commission lawsuit, not just low-income units. So most of the requirement for low-income units remains unfilled.

Since falling out of compliance with its housing mandate, the city keeps promising to do better, but all it has offered is delay, the state says in its lawsuit. The lawsuit asks Orange County Superior Court to declare the city in violation of the law and order it to comply.

“The time for empty promises has come to an end,” it says. “The City should not be allowed to avoid its statutory obligations any longer.”

It may be unsurprising that Gates portrays the battle between Huntington Beach and the state as one involving locals’ authority to manage their own affairs. That almost sounds like the “states’ rights” campaigns waged by Southern states to justify their resistance to federal civil rights laws. In terms of its practical responsibility to help deal with the state’s housing crisis, Huntington Beach doesn’t have a leg to stand on.

The city acknowledges its dependence on low-income workers to make its tourist economy hum; it just doesn’t want to do what’s necessary to provide them homes within the city limits. Its attitude seems to be: Let’s stick other communities with the burden.

So whether the state has the knives out for Huntington Beach for ulterior reasons, it’s still proper to make an example of the city. To solve the housing crisis, one has to start somewhere, and a city determined to flout the law is asking for it.

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