Walters: California’s Pro-Housing Forces Score Big Win

California’s housing crisis is a multi-front guerrilla war, pitting those who want to lower legal and political barriers to construction against those who see new developments as threats to the environment and/or the ambience of their neighborhoods.

The conflict is waged in the Legislature, in the state housing bureaucracy, in city councils, in the courts and, increasingly, at the ballot box. Every new offensive assault by pro-housing forces meets stout resistance by defenders of the status quo and over time, it’s been something of a stalemate.

Housing construction remains well below the levels needed to close the gap between supply and demand, resulting in ever-rising rents and home prices, ever-increasing angst for Californians priced out of the market and an adverse effect on the economy as workers migrate to more affordable communities elsewhere.

Pro-Housing Bills and Efforts Face Opposition

The Housing Crisis Act of 2019 was a major thrust by the pro-housing faction. Senate Bill 330 was aimed at blocking local government policies, such as restrictive zoning, caps on building permits or unworkable design standards that limit new housing developments.

Not surprisingly, the legislation was opposed by local government officials as undermining their historic power to shape the tenor of their communities through controls on land use. However, it was passed by strong majorities in both legislative houses and signed by Gov. Gavin Newsom, who had promised to meet the housing crisis head-on.

While the legislation limited the authority of local government officials, it may turn out to be a groundbreaking limit on the power of local voters as well.

The legislation’s passage more or less coincided with the Oceanside City Council’s approval of a 585-home subdivision called North River Farms, which bills itself as a country village integrated with small-scale agriculture. The council rezoned land to make the project feasible.

Despite its bucolic nature, North River Farms was opposed by existing residents of the area and some environmental groups. They launched a recall campaign against one of the council members who voted for the project and eventually placed a measure on the 2020 ballot to overturn the council’s decision, which was passed by a 2-1 margin of the city’s voters.

Thereupon, the project’s developer, sued to overturn the referendum, alleging that it violated the Housing Crisis Act of 2019 and last month, Superior Court Judge Richard Whitney declared that the new law did apply to the referendum.

Ruling Would Override Limits and Maximize Housing Development

In overturning the election results, Whitney said SB 330’s clear aim was to “maximize the development of housing” by overriding any local action or policy that attempts to limit construction.

Whitney’s ruling will no doubt face appeals to higher courts and could collide with a 2017 state Supreme Court decree, in a case involving taxation, that ballot measures are not subject to the same limits applied to local governments.

Writing the 5-2 majority opinion, Supreme Court Justice Mariano-Florentino Cuéllar declared, “Multiple provisions of the state constitution explicitly constrain the power of local governments to raise taxes. But we will not lightly apply such restrictions on local governments to voter initiatives.”

There is also a larger issue posed by the Oceanside case — whether zoning changes are legislative acts subject to referendum or merely administrative actions that are exempt from such challenges. Oregon, for instance, has flatly prohibited the use of referenda to oppose zoning changes.

The Oceanside case is not an isolated example of employing referenda to block projects. If Whitney is upheld, it will be a major victory for pro-housing forces by eliminating one arrow in the quiver of those who resist new development.