In breaking news (which at this point isn’t so breaking — forgive me, I’m about a day behind thanks to some overseas travel), Attorney General Rob Bonta and the Department of Housing and Community Development (HCD) have filed a lawsuit against the City of Costa Mesa, alleging an “arbitrary and capricious” failure to pass a compliant Housing Element in a timely manner.

Assuming HCD prevails in court, the consequences to the city could be severe. HCD is asking the court not only to passage of a compliant Housing Element within 120 days, but also to assess statutory fines and penalties. I’m not a California Government Code expert but my back-of-the-envelope calculation would place the fee somewhere between $170,000 and $850,000 if it were assessed today, with an additional $10,000-$50,000 per month going forward. As for the penalties? Oh, those aren’t so bad: just the total suspension of non-residential permitting authority, along with the mandatory approval of all residential projects that meet code REGARDLESS of zoning regulations.

How did we get here? That is a very good question. The factual story is convoluted in detail but simple at a high level: we just could not meet a deadline to save our lives. State law would have rewarded us with additional time to comply if we had been timely with the initial deadlines. We were not. So not only did we fall horribly, horribly behind in the process (thanks in part to questionable priorities), we were left vulnerable to multiple intervening events that made passing a compliant Housing Element extremely difficult. Among these were the unending complications at the Fairview Developmental Center (FDC) along with the New Commune DTLA decision that blew up our rezoning approach.

What is perhaps the more interesting question today is why are we getting sued right now? Mayor John Stephens wasted no time getting to the microphones to object to the lawsuit, calling the framing of Costa Mesa’s actions as refusing to comply “misleading” while pointing to the city’s active attempts to comply with State requests. He added, “I have no idea why we would be named in a lawsuit under these circumstances.”

On the one hand, that’s a ridiculous statement. Followers of this blog have known for many moons that it was only a matter of time before Costa Mesa was sued by HCD. The long, sordid history of failures — failures to meet deadlines, failures to communicate with the State, failures to do reasonable outreach to residents, failures to rezone in a timely fashion, etc. — are all WELL documented. The city has zero defense for why it is so far behind in the Housing Element process, leaving it the only city in Orange County without a compliant Housing Element other than our intentionally intransigent neighbor, Huntington Beach.

On the other hand, Stephens might have a point: the city has been working very hard to dig itself out of its compliance hole, with seemingly unending meetings about FDC, the horrifically named rezoning effort “Neighborhoods Where We All Belong” (NWWAB), and multiple tortured conversations about the Housing Element itself. It certainly is trying to get its house in order (womp womp).

So as to “why now?”, I can only speculate. Perhaps City staff has hit some kind of internal roadblock that has made additional forward movement in the Housing Element process impossible. I haven’t heard much, for example, about the city’s progress in finding replacements for the Segerstrom and other properties that bailed out of the Housing Element, which by law have to be identified and approved by mid-September. Is it possible that effort is hopelessly stalled, triggering the State to move onto the penalty phase? Or, perhaps Governor Gavin Newsom and Attorney General Bonta simply wanted a big headline by suing multiple jurisdictions at once. If that’s the case, then Costa Mesa just found itself in the wrong place at the wrong time.

It is unclear where this goes from here. Depending on how motivated the State is to push this lawsuit forward, I could see a settlement with a painful-but-not-fatal financial penalty coming our way. But if the city really is blocked from moving its Housing Element forward, either due to conflicting State laws/court cases or due to some internal issue, this could get pretty bad. If the State is no longer taking Costa Mesa’s calls, the city has a real problem. So stay tuned for updates. Hopefully the City Manager or the City Attorney will have some more color at the next City Council meeting.