California Wants Cities to Plan For More Housing. Cities Say the Rules Are Unclear

State auditors will examine California’s system for reviewing and approving cities’ plans to make way for more homes, which has grown increasingly contentious amid the housing crisis, especially for cities that had long faced little pressure to plan for growth.

Such plans to add a certain amount of homes based on population growth, called housing elements, must be submitted by cities and counties every six years.

More than a year, since cities had to get their housing elements approved by the California Department of Housing and Community Development, about a third of Bay Area cities and counties, are still out of compliance with state law — and some cities have raised concerns about the process.

The audit approved this week by the Joint Legislative Audit Committee will look at how the state reviews housing elements to make sure the standards are consistent and clear enough for cities and counties to actually follow.

“We need the state’s department of housing to provide their best guidance, but there have been problems,” said Sen. Steve Glazer (D-Orinda), who requested the audit. “We have to identify them and fix them so we can do better in the future.”

But in recent years, as the state’s housing crisis grows more dire, Gov. Gavin Newsom has amped up pressure on cities after several years of low targets for the amount of new homes planned for and weak consequences for the many cities whose plans fell short. As a result, cities have had to plan for more housing than ever and face strict rules and steep punishments if they don’t submit compliant housing elements — including fines, lawsuits and a loss of state funding for affordable housing and parks.

Last year, the state sued Huntington Beach for refusing to pass a housing element that could have added more than 13,000 new homes and apartments to the expensive Southern California city. This week, a Superior Court judge ordered the city to pass its housing element. City leaders vowed to appeal that ruling.

Pablo Espinoza, director of communications for the Department of Housing and Community Development, said he welcomes the audit and looks forward “to working with the California State Auditor to highlight this important work.”

“We are proud of the work we have done to strengthen the Housing Element effort since 2017 to ensure that communities plan for their fair share of housing,” he said in a statement to KQED. “And those changes are working: the number of homes built has gone up every single year of this administration.”

Housing advocacy organizations are also interested in the results of this audit. Sonja Trauss, executive director of the pro-development group YIMBY Law, said her organization has its own concerns about the housing element review process.

“In particular, we have reports from our watchdog and allied organizations that for some cities, HCD repeatedly told them to correct problems in their housing element, the cities never did so, and after some time had elapsed, HCD just went ahead and certified them,” she said in a statement to KQED. “We support more transparency for the housing element process, which the auditor’s report should provide.”

The state auditor will select at least 10 cities with compliant housing elements and the same number of cities that are out of compliance. Included in the review, the audit will look at how clear HCD’s standards are for each city’s housing elements, how consistent the agency’s comments are, and how responsive HCD is for each local government.

The auditor will likely start the review this fall and is expected to complete it sometime next year.