The State has established numerous penalties to discourage cities from violating housing statutes. Cities that deny a project in violation of the State’s housing laws can be sued by the Attorney General, the Department of Housing and Community Development, the project applicant, and housing advocates. In addition to paying their own legal fees, cities that lose or settle such lawsuits typically pay the legal fees of the entity that filed the lawsuit, which can result in millions of dollars of total litigation expenses.
Cities that deny a project in violation of the State’s housing laws also risk decertification of their General Plan Housing Element. When a Housing Element is decertified, there is a significant risk of additional lawsuits and further punitive actions by the State, which can include the following:
- Loss of permitting authority: Courts have the ability to assume control of a city’s permitting process and suspend the city’s ability to issue its own building permits. A court also can compel the issuance of building permits for residential projects to achieve compliance with State housing laws. (see Government Code Section 65755)
- Financial penalties: Courts have the ability to compel a city to bring its Housing Element into compliance with State law. If a city fails to comply with a court order, the court can impose fines up to $100,000 per month initially, and may increase the fines for continued noncompliance. (see Government Code Section 65585)
- Builder’s Remedy: Cities without a certified Housing Element are vulnerable to applications for residential development projects under the so-called “Builder’s Remedy” provision of the Housing Accountability Act. The Builder’s Remedy provision potentially allows a developer to construct a residential development project with an affordable housing component regardless of the zoning of the project site. (see Government Code Section 65589.5)