OC Cities Hustle to Avoid Builder’s Remedy “Travesty”

While some Orange County cities have avoided an onslaught of builder’s remedy projects — the penalty for failing to produce a state-approved housing plan on time — others still face the potential for such projects.

Only 12 of Orange County’s 35 cities, including Newport Beach and Irvine, are currently in compliance with state law, which requires cities to submit an eight-year plan to construct more homes and receive the state’s approval. The other cities are in noncompliance, giving developers an opportunity to swoop in and file builder’s remedy projects, which bypass city council and planning commission approval.

Huntington Beach, Laguna Beach, Laguna Hills and Anaheim are among some of the cities that have left the door open for such filings.

The Laguna Beach City Council approved its housing element in January, and received comments in March from California’s Housing and Community Development agency, the department responsible for reviewing the plans. The state agency said the city needed to make “additional revisions” to come into compliance.

The city has not submitted a new draft and remains out of compliance. A spokesperson for the city of Laguna Beach did not respond to a request for comment.

Laguna Hills, a city in South Orange just inland of the wealthier Laguna Beach, is aware it hasn’t met its deadline, but no builder’s remedy projects have been filed yet, according to Larry Longenecker, the city’s community development director.

“We’re aware of those provisions,” Longenecker said, declining to comment on whether the city was concerned about potential filings.

The Disneyland-anchored city of Anaheim is on its third draft of its housing element. No builder’s remedy projects have been filed in Anaheim either, said Mike Lyster, the city’s head of communications. Los Alamitos has also not seen any builder’s remedy projects come through, a city planner said.

So far, across Southern California, these builder’s remedy projects have only been filed in cities where rents are more expensive, including Santa Monica and Beverly Hills.

Because the law only applies to housing projects with at least a 20 percent affordable component, developing these projects where rents may not offset the costs of building affordable housing may not work, sources familiar with the provision told TRD.

The average monthly rent in Anaheim was $1,900 at the end of October, according to Zumper. In Beverly Hills, rents averaged $2,812 a month.

Huntington Beach, where rents average about $2,300 a month, is one city that has expressed concern about potential builder’s remedy projects. The coastal city’s housing plan has not yet been approved by California’s housing agency.

At a City Council meeting last month, Huntington Beach’s Mayor Pro Tempore Mike Posey warned that it may see builder’s remedy projects come through and the city would lose control over approving new developments.

In his remarks, he used the city of Santa Monica as an example, where 14 projects totaling almost 5,000 units raced through in the few weeks before Santa Monica closed the loophole and got its housing element approved by the state.

“They’re getting 20 years of production in one year, because the City Council was not paying attention to their housing element,” Posey said. “It’s a travesty.”

As of Nov. 1, Huntington Beach has not yet received any builder’s remedy projects, according to Jennifer Carey, the city’s public affairs manager.

The city is working on its fifth draft of its housing element and is still discussing public comments. Huntington Beach is no stranger to challenging state law — in 2019, it lost a lawsuit against the state of California over two housing bills, alleging they gave the state too much authority to rezone local land — but it seems to not want to go the litigation route again.

“The city can sue the state [but] winning against the state is uncertain,” according to a document from a City Council study session on Tuesday. “[Huntington Beach] will likely get sued by others.”