The California Department of Housing and Community Development released the 2025 Statewide Housing Assessment Public Draft, entitled “California’s Housing Future: Challenges and Opportunities,” at the recent California Housing Forum. The report found annual housing production over the last decade has fallen to 100,000 new homes short of demand; homeownership rate are at lowest since the 1940s; one-third of the state’s renters spend more than half their incomes on housing costs; and the state has 12 percent of the nation’s population but 22 percent of the country’s homeless population.

The report presents a variety of broad solutions including streamlining local and state land-use and environmental rules and boosting funding for low-income housing. Broad categories of responses include the following: reforming land use policies to advance affordability, sustainability, equity; addressing housing and access needs for vulnerable populations through greater inter-agency coordination, program design, and evaluation; investing in affordable home development and rehabilitation, rental and homeownership assistance, and community development. HCD will hold a webinar Jan. 13, and workshops will be held in San Diego Jan. 23, Fresno Jan. 30; workshop dates in Sacramento, Bay Area, Redding and Los Angeles are to be announced.

East Palo Alto Sues Menlo Park over General Plan Update
The City of East Palo Alto is suing Menlo Park over changes to its general plan and zoning code, claiming that they were adopted in violation of CEQA. The changes in Menlo Park’s M-2 industrial zone would allow up to 2.3 million square feet of nonresidential uses, up to 4,500 residential units, and up to 400 hotel rooms. The lawsuit includes concerns about how the general plan update will affect East Palo Alto, including displacement of residents, traffic, and housing. Facebook recently announced it will donate $20 million to East Palo Alto community organizations to help provide affordable housing however $4.5 million is contingent on any challenge to Menlo Park’s general plan update being “resolved in a manner that is reasonably acceptable to Facebook.” Menlo Park City Council voted to adopt the general plan update, 4-1, which would add as many as 11,570 residents and 5,500 workers between now and 2040.

Review Calls for Administative Reform at Coastal Commission
A recent “non-audit review” (PDF) of the California Coastal Commission by the Department of Finance urges the agency to clean up its books. The audit came in response to the commission’s request for a $1.46 million loan from the state in June to cover operating expenses. The commission claims that the loan was needed simply because, at the time, it did not have the staff to collect grant payments and reimbursements it was owed. The loan in June was the second loan in two years. The audit found the commission has a billing system that results in half of its invoices staying open for more than 121 days. The agency says last year was a particularly difficult year with the dismissal of executive director, staff turnover, and adoption of a new accounting system. The finance department recommends the commission centralizes its billing practices, develops written procedures, adopts an invoice schedule and increases the frequency of its billings to speed up collection.

New Border Community Envisioned in San Ysidro Community Plan
The City of San Diego recently adopted a Community Plan (PDF) for the neighborhood of San Ysidro that rezones hundreds of acres to attract commercial and residential spaces, as well as adds more parks. The plan is meant to revitalize the relatively poor community, which surrounds what is generally considered the world’s busiest border crossing. This new community plan will replace the existing one that dates back to 1990. The plan would allow mixed-use development for the first time in San Ysidro. The “old town” area would create a 124-acre San Ysidro Historic Village and a “Mexican Village” would become a visitor destination with restaurants, performance spaces, and a theater. The plan increases the community’s number of housing units by 31 percent, to nearly 10,000, and seeks to decrease the percentage of residents who commute by car.

Banning Ranch Suit Goes Before Supreme Court
The California Supreme Court heard arguments last week on a preservation group’s lawsuit challenging the Newport Beach City Council’s approval of the Banning Ranch development. The Banning Ranch Conservancy is accusing the city of violating its own general plan when the council in 2012 approved a large residential and commercial development for the area. The original plan has been significantly downgraded, but the Coastal Commission rejected the most recent plan and the developer sued in Orange County Superior Court challenging the denial and requesting damages of $490 million. The Conservancy’s ultimate plan is to acquire the property and manage it for public use. The Los Angeles Times reports that justices “appeared skeptical” that the city had in fact reviewed the project adequately. The court has 90 days to decide the case.

Santa Rosa City Council May Decide Fate of Rent Control Regulation
Upon completion of a signature-verification process, Sonoma County elections officials concluded opponents of Santa Rosa’s rent control law have gathered enough valid signatures to force a citywide referendum. City Council must now decide how to proceed: scrap the suspended law or put it in front of voters. The rent control law has been suspended since the petition was filed in late September. The signature-gathering got complicated when 155 signers asked to be removed after claiming they were misled. The petition gatherers were from out of the area and paid $5 per signature may have intentionally misled people into signing. The City Attorney’s Office investigated and hired a retired police lieutenant to look into the allegations. (See prior CP&DR coverage.)

Los Angeles Subway Receives Nearly $1.5 Billion in New Federal Funds
Los Angeles Metro announced the promise of $1.5 billion in new federal grants and loans for extension of the Metro Purple Line Extension to Beverly Hills and Century City. Metro received a $1.187 billion construction grant agreement through the Federal Transit Administration’s Capital Investment Grant program, as well as approval for a $307 million loan through the Department of Transportation’s innovative TIFIA program — for a total of $1.487 billion. The project also will receive $169 million in federal funding through the Congestion Mitigation and Air Quality program. Coupled with Metro’s $836 million local match made possible by the Measure R and recently-passed Measure M, providing $2.5 billion now designated to continue construction of one of L.A. County’s most critical public transit projects — a subway primarily underneath Wilshire Boulevard that will connect Downtown to West Los Angeles.

Quick Hits & Updates

The California Clean Energy Committee filed a lawsuit against Placer County over the Tahoe Basin Area Plan. The three causes of action according to the lawsuit are failure to comply with CEQA, inadequate findings in the EIR, and failure to recirculate the EIR. The CCEC challenged Placer County’s approval of the EIR in the Homewood Mountain Ski Resort Master Plan. (See prior CP&DR coverage.)

Commercial property owners in La Jolla have filed a lawsuit against the City of San Diego to undo a newly approved La Jolla Maintenance Assessment District that taxes homeowners, apartment-owners, and commercial property owners and uses the funds to spruce up local streets, sidewalks and parks. Those opposed to the tax say it violates California law because it is collecting funds for several services taxpayers are already paying the city to deliver. Commercial properties cover 85 percent of the bill, while condos and single-family homes contribute the remaining 15 percent.

An analysis by the Union-Tribune indicates that SANDAG must find new ways to finance new trolley lines and highway improvements as Measure A, a half-cent sales tax, was rejected by voters in November. Additionally, past revenue projects were too optimistic and variables had to be recalculated in the forecasting model. This means the major projects that were planned will proceed on a slower schedule and with different financing.

A Santa Clara County Superior Court judge agreed to halt implementation of Measure V, Mountain View’s new rent control law. Voters approved the rent control law, which includes rent and eviction controls as well as rolling rents back to October 2015 levels.

The Arthouse, a 6,500-square foot warehouse that housed artists in Fresno is closing its doors because of the increased scrutiny after Oakland’s Ghost Ship warehouse fire in early December. The fire led to debates about the safety of these warehouse art spaces, and many across the nation have been forced to close. While the Arthouse was not particularly targeted, the Fresno Fire Department was prompted to inspect the building following a call about possible code violations.