Nearly three years after the deadline, San Mateo County and three Bay Area cities—Half Moon Bay, Belvedere, and Clayton—have yet to finalize their state-mandated housing plans. This delay leaves them at risk of facing fines, losing grant funding, and losing control over land use decisions through a provision known as the “builder’s remedy.” These municipalities were required to secure state approval for their housing plans by January 31, 2023.
In California, local governments must submit housing plans, called housing elements, every eight years. These plans outline how jurisdictions intend to permit a specific number of homes across various affordability levels. This time around, the state has significantly raised the targets for homebuilding, demanding that the Bay Area’s 110 local governments collectively add 441,000 new homes between 2023 and 2031, a substantial increase from 187,990 in the previous eight-year cycle.
The Bay Area has struggled to meet these ambitious goals, largely due to high interest rates and other market challenges. Despite the looming threat of penalties, many housing advocates express concern over the apparent lack of urgency among the remaining municipalities without completed housing elements.
“They’re mostly small and wealthy jurisdictions,” noted Matt Regan, a housing policy expert with the Bay Area Council, a pro-business organization. “They probably feel they don’t have any obligation and that they can hire enough lawyers to avoid complying with state mandates.”
Local officials, however, dispute this characterization. They assert they have been actively working with regulators to finalize the complex plans, which often span hundreds of pages and encompass a wide array of housing policies. “There hasn’t been any foot-dragging happening in the city of Half Moon Bay,” said Leslie Lacko, community development director for the city.
Earlier this month, Half Moon Bay adopted a fifth draft of its housing plan, focusing on policies related to accessory dwelling units and other regulatory concerns. The city aims to submit this updated plan for state approval within the current month.
As the state has implemented new housing element rules, it has pursued serious penalties against only a handful of cities, mainly in Southern California, for failing to obtain plan approvals. Notably, in 2023, state officials filed a lawsuit against Huntington Beach, which has openly disregarded the housing element process, risking fines that could amount to hundreds of thousands of dollars monthly.
The California Department of Housing and Community Development did not respond to inquiries regarding potential penalties for the Bay Area jurisdictions lagging behind. Nonetheless, municipalities that have not submitted their housing plans on time may be subjected to the builder’s remedy. This provision of state law allows developers to bypass local zoning restrictions to advance large housing projects when a city’s housing element is deemed noncompliant.
Since last year, at least 98 builder’s remedy proposals have been submitted across the region, amounting to over 13,000 housing units. Despite concerns that these proposals could significantly alter community landscapes, it remains uncertain how many projects have actually commenced construction.
In Belvedere, for instance, one developer leveraged the possibility of a substantial builder’s remedy proposal to secure approval for a smaller 40-unit duplex project along the waterfront. Nevertheless, Belvedere still has not finalized its housing element. In September, the state sent a letter to the city urging the completion of a required rezoning process, which is essential for increasing housing availability. The letter also served as a reminder about potential fines and penalties for noncompliance, including ineligibility for certain state housing and transportation grants.
San Mateo County also received a similar letter from state regulators in September. County officials stated they are working diligently to finalize their required rezoning by mid-2024, citing challenges in navigating the new housing laws. They have not yet received any builder’s remedy applications.
In Half Moon Bay, officials highlight that the slow progress is necessary to ensure compliance with regulations set forth by the state’s Coastal Commission, which aims to protect coastal habitats and maintain public access to the shoreline. Critics have often blamed the commission for contributing to delays in new housing development. City officials confirmed they have not received any builder’s remedy proposals.
City officials in Clayton, a small suburb near Concord, did not respond to requests for comments regarding their delayed housing plan approval.
As these Bay Area cities continue to navigate their housing challenges, the implications of their delays could resonate beyond local boundaries, influencing California’s broader housing crisis.
