Attorney General Bonta, Newsom Administration Reach Settlement with City of Norwalk over Unlawful Housing Ban

Settlement terms include requiring City of Norwalk to repeal its unlawful housing ban, create a trust fund for the development of affordable housing, pay $250,000 into the trust fund, meet reporting requirements, and notify stakeholders that ban has been repealed

LOS ANGELES - California Attorney General Rob Bonta, Governor Gavin Newsom, and California Department of Housing and Community Development (HCD) Director Gustavo Velasquez today announced reaching a settlement with the City of Norwalk, resolving the state's lawsuit over the City's unlawful ban on new housing for California's most vulnerable residents. Filed on November 4, 2024, the lawsuit alleged that the City's ban on emergency shelters, supportive housing, single-room occupancy housing, and transitional housing violated numerous state laws and sought an order compelling the City to repeal the ban. On February 19, 2025, Attorney General Bonta, Governor Newsom, and HCD Director Velasquez secured a decision from the Los Angeles County Superior Court denying the City's attempt to dismiss the state's lawsuit. As part of today's settlement, the City of Norwalk will, among other things, repeal its unlawful ban, create a housing trust fund for the development of affordable housing within the City's limits, deposit $250,000 into that trust fund, implement all overdue housing element programs, and take several steps to ensure that stakeholders know that the housing ban has been repealed and that applications for housing development projects will be processed in accordance with state law. The settlement is subject to court approval.

"Before filing our lawsuit, Governor Newsom, HCD Director Velasquez, and I warned the City of Norwalk on several occasions that there would be serious consequences if it moved forward with its unlawful housing ban. Regrettably, our warnings went unheeded, and we were forced to take legal action," said Attorney General Rob Bonta. "We are more than willing to work with any city or county that wants to do its part to solve our housing crisis. By that same token, if any city or county wants to test our resolve, today's settlement is your answer. All of us have a legal and moral responsibility to help - not hurt - those struggling to keep a roof over their heads or lacking housing altogether."

"The Norwalk City Council's failure to reverse this ban without a lawsuit, despite knowing it is unlawful, is inexcusable," said Governor Gavin Newsom. "No community should turn its back on its residents in need - especially while there are people in your community sleeping on the streets. No city is exempt from doing their part to solve the homelessness crisis."

"This case should send a clear message: When a city's leaders disregard the law to block housing - especially housing for those most in need - this Administration will take swift legal action," said HCD Director Gustavo Velasquez. "This settlement ensures Norwalk will accept and process housing project applications, contribute meaningful funding for affordable housing development, and coordinate with Los Angeles County to address the needs of people experiencing homelessness. Going forward, HCD will continue to provide critical oversight to ensure accountability to that pledge."

Today's settlement includes the following terms:

• At the next regularly scheduled City Council meeting after receipt of the notice of entry of judgment, or at a special meeting called by the City Council, the Norwalk City Council will repeal its unlawful ban.
• The City will create a local housing trust fund for the development of housing affordable to extremely low-, very low-, and low-income households. The City must also deposit a total sum of $250,000 into the trust fund and submit to HCD proposed procedures by which interested parties may apply for and receive funding from the trust fund.
• Within three business days after the City repeals the moratorium, HCD will recertify the City's housing element as substantially compliant with state law. In order to remain certified, the City must (1) implement key aspects of its housing element that are overdue, such as taking steps to ensure that the City's policies, development standards, and incentives align with its obligation to plan for housing at all income levels, and (2) amend its housing element to acknowledge that the ban had a disproportionate impact on populations with special needs and was inconsistent with the its obligation to affirmatively further fair housing - or put differently, combat historic patterns of segregation and foster more inclusive communities - and include a program or programs to proactively address the needs of these impacted communities.
• For the duration of Norwalk's Sixth Housing Element Cycle (2021-2029), the City must submit quarterly reports to HCD on the status of proposed housing projects that include affordable housing or shelter and supportive housing. For example, when the City denies an application for any reason, information on the denial must be included in the quarterly report.
• For the duration of Norwalk's Sixth Housing Element Cycle, any time that the City disapproves an application for housing development that includes affordable housing or shelter and supportive housing, the City must make factual findings, with analysis, that the disapproval is consistent with the City's obligation to affirmatively further fair housing.
• Within 15 business days after receipt of the notice of entry of judgment, the City of Norwalk must post and maintain on its official website for 180 days the following statement: "On [date of repeal of the moratorium], the City of Norwalk repealed the moratorium on establishing, implementing, or operating emergency shelters, supportive housing, single-room occupancy housing, and transitional housing that had been included in Urgency Ordinances 24-1752U and 24-1753U. The City is now accepting all such applications without the waiver or exemption requirements set forth in the foregoing Urgency Ordinances." In addition, the City must send that statement to parties who may, in the future, be interested in developing such housing in the City. This statement must also be provided to City employees or officials whose work involves the City's zoning, planning, or land use policies and practices, including every member of the Planning Commission and City Council.

On August 6, 2024, without the required legislative findings or any deliberation, the five-member Norwalk City Council unanimously passed an urgency zoning ordinance imposing a 45-day ban, or moratorium, on new supportive housing. On September 16, 2024, HCD issued a Notice of Violation to the City, warning of impending legal action if the City did not repeal the ban. Despite the warning, the Norwalk City Council unanimously extended the ban on September 17, 2024 for an additional 10 months and 15 days, once again without the required legislative findings or any deliberation. On October 3, 2024, Governor Newsom announced that HCD had decertified Norwalk's housing element. Without a compliant housing element, cities and counties cannot deny certain affordable housing projects and are not eligible to receive key state housing and homelessness funds.

On July 13, 2023, Attorney General Bonta issued legal guidance to local governments, reminding them of the strict requirements under state law for enacting urgency zoning ordinances. The California Department of Justice observed that some local jurisdictions were responding to state housing laws passed in recent years by enacting such ordinances in an apparent attempt to limit or circumvent state housing mandates. Under California Government Code Section 65858, urgency zoning ordinances require written "legislative findings that there is a current and immediate threat to the public health, safety, or welfare" demanding immediate action.

A copy of the settlement agreement can be found here.