SACRAMENTO, California — A Sacramento suburb will have to build more affordable housing for residents at risk of homelessness, under a settlement announced Wednesday with California Gov. Gavin Newsom’s administration, which comes more than a year after the coup alleged in a lawsuit that Elk Grove unlawfully denied an affordable housing project.
Under the agreement, the city must identify a new affordable housing site in an area with good access to economic, educational and health care resources by July 1, 2025. The state will also increase oversight of the city’s affordable housing approvals over the next five years, including receiving regular updates on the status of proposed projects.
Attorney General Rob Bonta, a Democrat, said it shouldn’t have taken so long for Elk Grove to agree to build more affordable housing.
“Our housing laws are not suggestions,” Bonta said at a news conference Wednesday. “You have to follow them. And when cities try to circumvent them — try to prevent us from building the housing we need, try to illegally deny housing proposals, discriminate against communities, as Elk Grove did — the DOJ will hold them accountable.”
California’s lawsuit alleged that the city violated state law by rejecting a project to build 66 units in an area known as Old Town for residents experiencing homelessness. The rejection violated laws aimed at streamlining housing projects and prohibiting local governments from making discriminatory decisions, the state argued.
The legal battle escalated a growing conflict between state and local governments over how many housing projects cities should approve and how quickly they should build them. Newsom in 2022 temporarily withheld funding of local governments that he said failed to adequately reduce homelessness. His administration has also has sued the Southern California city of Huntington Beachand accused it of ignoring state housing laws.
Elk Grove must pay the state $150,000 for attorney and other legal fees under the agreement. Local officials said they were pleased with the settlement and that it underscored the city’s efforts to build affordable housing.
“Elk Grove is proud of the role it has played as a leader in developing affordable housing in the region,” the city said in a statement. “The city hopes that in the future, the state will work more with cities to collaborate on developing affordable housing rather than expending valuable resources pursuing unnecessary litigation.”
The Elk Grove Planning Commission rejected the Old Town project, called the Oak Rose Apartments, in 2022, saying the placement of first-floor units violated municipal standards for that part of the city.
Elk Grove settled another lawsuit over the project earlier this year and approved an 81-unit affordable housing complex from the same developer at a different location.
According to the California Department of Housing and Community Development, the state needs to build 2.5 million homes by 2030 to meet demand.
Newsom said the legal battle in Elk Grove highlighted “the original sin” in California: the housing crisis.
“There is no issue that impacts the state in more ways and days than the issue of housing,” the Democrat said.
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Austin is a corps member for The Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on under-covered issues. Follow Austin on X: @sophieadanna