California Just Sued Five More Cities Over Housing. For a Developer, That List Is a Map.

California Just Sued Five More Cities Over Housing. For a Developer, That List Is a Map.

On July 16, the Attorney General and the state's housing department filed writ petitions against five California cities — Calexico, Costa Mesa, Half Moon Bay, Ridgecrest, and Turlock — for still not adopting a compliant housing element more than two and a half years after the deadline. As an enforcement headline, it's routine. As a development tool, it's something else: those five names, plus the shrinking set of holdouts still unsettled, are the places where local zoning is, right now, unenforceable against the right project.

That's the builder's remedy. And the window is narrower than it's been in years.

What the builder's remedy actually gets a developer

Miss your housing-element deadline and the Housing Accountability Act takes away a city's power to reject a qualifying project for being inconsistent with its zoning or general plan. "Qualifying" is specific: at least 20% of the units reserved for lower-income households, or 100% for moderate-income. Hit that threshold, and a parcel's zoning stops being the ceiling on what you can build.

This isn't a thought experiment. Los Angeles County's first written builder's-remedy decision came out of La Cañada Flintridge, where the court held that a city which blew its deadline can't be treated as compliant — and can't zone its way out of a qualifying application — until it finishes the rezoning its own plan requires.

Two things nobody prints on the flyer. Your project generally has to vest — be submitted — while the city is still out of compliance. And the builder's remedy suspends zoning, not CEQA; you still run the full environmental gauntlet.

Why that window is closing

In mid-2023, roughly 98 cities and counties were out of compliance. As of this cycle the state puts compliance above 95%, and it is actively closing the rest — already settling with Hollister, Artesia, La Habra Heights, Malibu, Fullerton, Coronado, and San Bernardino, each agreeing to fix its plan.

Sitting out also finally costs money. SB 1037, in force since January 2025, lets the Attorney General seek civil penalties of $10,000 to $50,000 per month, per violation — earmarked for affordable housing in that same city. Huntington Beach is the object lesson: sued in 2023, it was hit in May with a $160,000 penalty and a meter that keeps running.

> $50,000 a month — every month until Huntington Beach adopts a compliant housing plan. Running out the clock used to be free.

What to actually do with this

Before you underwrite anything on a builder's-remedy theory, check the target city's status — the state publishes it, and trackers like fairhousingelements.org map compliance jurisdiction by jurisdiction. If a city is out of compliance and your project can carry the affordability set-aside, the clock is the whole game: file while the window is open.

Because the clock cuts the other way too. A city can moot your leverage by curing the defect mid-fight — Sausalito did exactly that, finishing an environmental review while a housing case was live, and a court tossed the challenge as moot in February. Cities also keep insisting they can "self-certify" a plan the state rejected, a fight that only ends when somebody sues.

So the July 16 filings land two ways for anyone building in California. They're the clearest signal yet that the state will drag holdouts into compliance — rough news if your whole thesis was a permanently frozen city. But on those specific parcels, in those specific cities, the zoning map is the most negotiable it will ever be. Treat the out-of-compliance list as what it is: a dated, shrinking opportunity, not a standing one.

This is a read on public enforcement actions and statute, not legal advice — builder's-remedy eligibility is fact-specific and contested, so confirm a city's status and your project's footing before you rely on it.

Sources

Office of the Governor of California — No more excuses: state takes legal action against five local governments for defying state housing law (Jul 16, 2026): https://www.gov.ca.gov/2026/07/16/no-more-excuses-newsom-administration-takes-legal-action-against-five-california-local-governments-for-defying-state-housing-law/

California Department of Justice — AG Bonta, Governor Newsom, and HCD act to enforce the Housing Accountability Act's builder's remedy (La Cañada Flintridge): https://oag.ca.gov/news/press-releases/attorney-general-bonta-governor-newsom-and-california-department-housing-and

California Legislature — SB 1037 (2024), planning and zoning: housing element: enforcement (civil penalties): https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202320240SB1037

Farella Braun + Martel — California court issues first decision addressing the builder's remedy: https://www.fbm.com/publications/california-court-issues-first-decision-addressing-builders-remedy-decision-on-related-lawsuit-pending/

Davis Vanguard — YIMBY Law to appeal Sausalito housing element ruling; case found moot after EIR completed (Mar 30, 2026): https://davisvanguard.org/2026/03/housing-element-environmental-review-appeal/

Housing element / builder's remedy compliance tracker — fairhousingelements.org: https://www.fairhousingelements.org/he-status