California Settles Affordable Housing Lawsuit with Noncompliant City

California Attorney General Rob Bonta holds a copy of the affordable housing settlement agreement with Elk Grove during a press conference at the Department of Justice building in Sacramento, Calif., on Sept. 4, 2024. Travis Gillmore/The Epoch Times

SACRAMENTO, Calif.—State leaders and a Sacramento County city have settled a lawsuit over the city’s 2022 rejection of a 66-unit affordable housing proposal, with the attorney general sending a stern message to other reluctant cities.

Attorney General Rob Bonta, Gov. Gavin Newsom, and Gustavo Velasquez—director of California’s Department of Housing and Community Development—announced on Sept. 4 the settlement of a state lawsuit filed against Elk Grove last year.

The settlement will require the approval of 146 units, including larger, one-bedroom units spread across two locations.

Additionally, Elk Grove has 30 days to pay the state $150,000 to cover court costs and attorney fees, and the state will closely monitor the city’s housing activities for the next five years.

The attorney general said during a press conference Wednesday that the lawsuit was filed in May 2023 because the city “illegally denied” the project in violation of state laws, including Senate Bill 35—signed into law in 2017 to streamline approval of affordable housing projects—and the Housing Accountability Act.

“They should have approved it,” Bonta said during the press conference. “We shouldn’t be here today, and it shouldn’t have taken this long.”

He said Elk Grove was given several chances to correct its actions before the state sought punitive measures.

Bonta warned cities that are currently fighting affordable housing mandates, including Huntington Beach and Woodside, and others that might be considering doing so, that the state will take legal action.

“Our message today is, whatever city you are, you have an obligation and a duty to follow the law of the state of California,” Bonta said. “If you don’t, we will sue you, we will take you to court, and you will comply, one way or the other.”

The governor thanked Elk Grove officials for “eventually doing the right thing.” He said during the press conference that the lawsuit was necessary because the city’s actions were detrimental to people with disabilities that the housing units were meant to benefit.

California Gov. Gavin Newsom speaks about the settlement of a lawsuit against Elk Grove over  an affordable housing project at a press conference at the state's Department of Justice building in Sacramento, Calif., on Sept. 4, 2024. Travis Gillmore/The Epoch Times

“We can’t solve California’s homelessness crisis without creating new housing and supportive services,” Newsom said in his press release. “Elk Grove is not immune to this challenge, and the city’s decision to block these efforts—wasting valuable time and resources—is especially shameful. We expect Elk Grove to follow the law—continued refusal will not be tolerated.”

Elk Grove officials, including the mayor and City Council members, did not respond to requests for comment.

The city released a statement suggesting the lawsuit was unnecessary because of a February agreement with the developer to build 81 units on a different site.

“The state’s litigation had no impact on the outcome of that case, and the city is pleased that the state has agreed to settle the matter without significant impact to the city,” Elk Grove officials said in the press release. “The city is hopeful that in the future the state will work more collaboratively with cities to partner in the development of affordable housing rather than use precious resources in the pursuit of unnecessary litigation.”

Highlighting $78 million that the city has invested in affordable housing since 2004, officials said they are proud of their leadership.

“Today’s settlement announcement underscores Elk Grove’s continued commitment to the development of all forms of affordable housing and its focus on putting resources towards its housing goals,” the statement said.

State officials recognized the separate agreement between the city and the developer but said in Newsom’s Sept. 4 press release that the initial denial of the project was “unlawful, created unnecessary delays for its community members seeking supportive housing, and resulted in the more than yearlong legal battle that could have been avoided.”

Gustavo Velasquez, director of California’s Department of Housing and Community Development, discusses the settlement with Elk Grove at a press conference at the Department of Justice building in Sacramento, Calif., on Sept. 4, 2024. Travis Gillmore/The Epoch Times

The head of the state’s Housing and Community Development Department said work will continue with Elk Grove to ensure that the conditions of the settlement are fulfilled.

“This is a victory in the state’s efforts to expand the availability of much-needed supportive housing, consistent with California’s strong legacy upholding fair housing rights for people with disabilities and for those experiencing or at risk of homelessness,” Velasquez, the department’s director, said in the governor’s press release. “We are resolute to see that every community in our state affirmatively furthers fair housing and expands integrative communities of opportunities.”