WHAT YOU NEED TO KNOW: California has held Elk Grove accountable for the city’s denial of a supportive housing project in violation of state law. Today Elk Grove has agreed to a settlement with the state requiring the city to undergo additional state monitoring, identify and rezone a new site for affordable housing development in a high-resource area, and pay the state’s attorneys’ fees

SACRAMENTO - California Governor Gavin Newsom, Attorney General Rob Bonta, and California Department of Housing and Community Development (HCD) Director Gustavo Velasquez today announced a settlement with the City of Elk Grove resolving California’s lawsuit against the city for the city’s unlawful denial of a proposed supportive housing project for lower-income households at risk of homelessness.

“We can’t solve California’s homelessness crisis without creating new housing and supportive services. 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," said Governor Gavin Newsom.

The state filed the lawsuit after the city of Elk Grove, facing NIMBY pressure, denied the 67-unit supportive housing project on the basis that it did not meet the city’s zoning standards, despite the fact that the city had recently approved a similar project for market-rate housing. The project would have been located in Elk Grove’s historic district, a high-resource area critical to the state’s goal of providing communities of opportunity for people of all incomes. The project would have — provided off-site and on-site services to assist residents in maintaining housing and maximizing their ability to live and work in the community.

On May 1, 2023, California sued the city for violations of state laws, including Senate Bill 35 (SB 35), the Housing Accountability Act (HAA), and fair housing laws intended to prohibit discriminatory land use practices, including the Nondiscrimination in Land Use Law and the Affirmatively Furthering Fair Housing statute (AFFH).

Although the city ultimately reached a separate settlement agreement with the development to move the project to another part of Elk Grove, the city’s basis for denying the project remains unlawful, created unnecessary delays for its community members seeking supportive housing, and resulted in the more than year-long legal battle that could have been avoided, had Elk Grove done the right thing and approved the project in accordance with state law.

As part of today’s settlement with the state, Elk Grove agrees to be subject to reporting requirements to monitor its future compliance with state housing law, identify an additional site for low-income housing development, and pay the State $150,000 in attorneys’ fees and other costs.

“This settlement reflects what I’ve said all along: California’s housing laws are not optional. Local governments that violate our laws to deny affordable housing opportunities to Californians will be held accountable,” said Attorney General Rob Bonta. “While I am pleased that this is now behind us, and that Elk Grove ultimately approved even more homes for those most in need, the city’s refusal to do the right thing over and over again cannot be swept under the rug. These are not ordinary times. Millions of Californians are struggling to keep a roof over their heads or lack housing altogether. Every local government therefore has both a legal and moral responsibility to help us meet the moment. If other cities believe they are exempt from that task, Governor Newsom, HCD Director Velasquez, and I will continue reminding those cities that they are in the wrong.”

“California needs a broad spectrum of housing solutions to address decades of inaction and underinvestment. This agreement reaffirms the importance of working together – at all levels of government and community – to provide affordable and dignified housing options that Californians deserve,” said Business, Consumer Services, and Housing Agency (BCSH) Secretary Tomiquia Moss. “I am proud of HCD’s Housing Accountability Unit’s commitment to working in partnership with local jurisdictions to achieve results that impact the lives of so many Californians.”

“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,” said Gustavo Velasquez, Director of HCD. “We are resolute to see that every community in our state affirmatively furthers fair housing and expands integrative communities of opportunities. Our team will work with the City of Elk Grove to ensure this settlement is the first step in a lasting commitment to housing residents in need.”

Prior to the filing of the lawsuit, HCD issued a Notice of Violation on October 12, 2022, warning the city that its denial of the Oak Rose Apartments violated state law, and Attorney General Bonta sent a letter on March 16, 2023, urging the city to reconsider its unlawful denial of the Oak Rose Apartments or face the legal consequences. A copy of the settlement agreement can be found here.