A California city or county that falls out of Housing Element compliance does not simply lose a planning credential. Development review rules change, state enforcement activates, and the jurisdiction can face litigation, financial penalties, and housing applications it has limited power to deny.
The consequences depend on the type of noncompliance. A jurisdiction that never adopted a substantially compliant Housing Element faces a different track than one that lost a prior compliance finding, or one that adopted a compliant Housing Element but missed a required rezoning deadline. Timing and duration also matter.
What Does It Mean for a California City to Lose Housing Element Compliance?
HCD finds a Housing Element in substantial compliance with state law when it meets the statutory requirements in Government Code section 65583 and related provisions. That finding is not permanent. A jurisdiction’s status can change if it fails to adopt a substantially compliant Housing Element, fails to complete programs or rezoning it committed to, or takes action that conflicts with state housing law.
The requirements a jurisdiction must satisfy to achieve and maintain compliance are covered in detail in the firm’s article on California Housing Element compliance. The focus here is on the consequences of failing to meet those requirements, not the requirements themselves.
How Does HCD Identify Housing Element Noncompliance?
HCD reviews Housing Element implementation on an ongoing basis, not only at adoption. Its published enforcement materials state that HCD may initiate review based on information in a Housing Element, an Annual Progress Report, a stakeholder comment letter, or another source, including a phone call, email, or news article.
A single inquiry does not mean HCD will pursue enforcement. HCD evaluates each matter case by case, generally starting with a conversation to understand the circumstances. Depending on what it learns, HCD may simply monitor the situation, offer technical assistance, or move toward a formal notice.
What Happens After HCD Identifies a Compliance Problem?
HCD’s process is not a fixed checklist and can involve multiple rounds of correspondence. In general terms, it can include:
- Technical assistance: HCD offers advice intended to help the jurisdiction resolve the issue informally.
- Notice of Inquiry or Notice of Potential Violation: HCD requests information or warns of a potential violation tied to an upcoming deadline, unless the violation has already occurred.
- Notice of Non-Compliance or Corrective Action: HCD notifies the jurisdiction that compliance may be revoked if the remedy is not completed, typically within 30 days, though HCD may adjust that timeframe.
- Opportunity to respond: Local governments can respond at each stage. If the corrective action is completed, HCD acknowledges it and closes the matter.
- Decertification: If the jurisdiction does not complete the required remedy, HCD may revoke its compliance finding.
- Referral to the Attorney General: HCD may refer the matter to the California Office of the Attorney General. HCD’s materials indicate two meetings with the jurisdiction are generally offered before a court action is filed.
Each matter proceeds on its own facts. A cooperative jurisdiction may move through several rounds of technical assistance before any formal notice issues. One that ignores HCD or is far behind schedule may move through the stages faster.
What Is Housing Element Decertification?
Decertification means HCD has revoked a jurisdiction’s finding of substantial compliance. The jurisdiction no longer has a certified Housing Element, even if one was previously adopted and found compliant.
Decertification does not erase the underlying adopted document, but it removes the legal protections tied to an active compliance finding. For most purposes under state housing law, a decertified jurisdiction is treated the same as one that never achieved compliance for the current cycle, which affects development review, Builder’s Remedy exposure, and potentially funding eligibility.
A jurisdiction that corrects the underlying issue, such as completing a required rezoning or revising the element, can seek recertification. HCD restores the compliance finding once it confirms the Housing Element again meets statutory requirements.
What Happens to Housing Development Projects When a City Is Noncompliant?
A jurisdiction’s Housing Element status affects how it must treat housing applications under California’s Housing Accountability Act (Government Code section 65589.5) and related statutes. Noncompliance does not eliminate a city’s zoning and General Plan, but it narrows its discretion to deny or condition qualifying projects.
Depending on the project and the jurisdiction’s status, several mechanisms can become relevant:
- Housing Accountability Act protections: The Act already limits a local government’s ability to deny or downsize projects meeting objective standards. Noncompliance can strengthen an applicant’s position in a dispute over a denial.
- Streamlined and ministerial approval pathways: Laws such as SB 35 and AB 2011 allow ministerial approval for qualifying projects where a jurisdiction has not met certain housing production or rezoning benchmarks, depending on the statute and project characteristics.
- Builder’s Remedy: A noncompliant jurisdiction can face projects that proceed largely outside its ordinary zoning and General Plan consistency requirements, addressed in detail below.
Not every project in a noncompliant jurisdiction automatically qualifies. Eligibility depends on statutory requirements, project characteristics such as affordability and density, and application timing relative to the jurisdiction’s compliance status.
Can Builder’s Remedy Apply When a City Loses Housing Element Compliance?
Builder’s Remedy is one of the most significant practical consequences of noncompliance. It arises under the Housing Accountability Act, Government Code section 65589.5, and ties directly to a jurisdiction’s compliance status when a qualifying application is submitted.
Assembly Bill 1893, effective January 1, 2025, revised how Builder’s Remedy works for applications deemed complete on or after that date. A local government generally cannot deny a qualifying project for inconsistency with its zoning or General Plan if the Housing Element was out of substantial compliance when the application was deemed complete. That timing is central: correcting compliance afterward does not retroactively defeat the project’s eligibility.
Current law also narrowed what a Builder’s Remedy project looks like. Projects deemed complete after January 1, 2025 are generally subject to:
- Density limits: Minimum and maximum density tied to the project site, rather than a developer-selected density with no ceiling.
- Site restrictions: Certain sites, including some adjacent to heavy industrial uses, are excluded.
- Objective local standards: A jurisdiction may apply pre-existing, objective, written standards that do not prevent the project from reaching its qualifying density.
- Reduced affordability thresholds: Mixed-income projects generally need 7 percent extremely low-income, 10 percent very low-income, 13 percent low-income, or 100 percent moderate-income units, with exceptions for small projects under one acre.
Whether a project qualifies, and whether it triggers Builder’s Remedy exposure, depends on statutory eligibility, application completeness, and timing. Disputes over whether an application was properly deemed complete, or the jurisdiction was actually noncompliant at that moment, are common sources of litigation.
For a more detailed explanation of Builder’s Remedy eligibility and how it works, see the firm’s article on California’s Builder’s Remedy.
What Happens When a City Misses Required Housing Rezoning Deadlines?
Many Housing Elements commit a jurisdiction to rezone specific sites for its share of regional housing need. That rezoning obligation, governed by Government Code section 65583, carries its own statutory deadline, separate from the deadline to adopt the Housing Element itself.
A jurisdiction found compliant on time generally has a longer window, often described as three years, to complete required rezoning. One not timely found compliant can face a much shorter window, and in some cases must finish rezoning before HCD will find the element compliant at all.
A missed rezoning deadline is a distinct violation from general noncompliance, though the two are often connected. A jurisdiction can hold an adopted, previously compliant Housing Element and still fall out of compliance solely by missing its rezoning schedule, which can affect streamlined review eligibility and factor into HCD’s enforcement timeline.
Can a City Lose Access to State Housing Funding?
Housing Element compliance can affect eligibility for certain state housing programs. HCD’s enforcement materials routinely describe noncompliance as resulting in ineligibility or delay in receiving specific state funding and incentives tied to housing production.
This consequence is program-specific, not automatic across all state or federal funding. Some grant programs and incentive designations condition eligibility, priority scoring, or awards on Housing Element compliance, depending on that program’s own current criteria.
Can HCD or the Attorney General Sue a Noncompliant City?
Yes, in appropriate circumstances. HCD has statutory authority under Government Code section 65585 to review compliance, issue findings, and refer violations to the California Office of the Attorney General, who can then pursue a court action, including a writ petition seeking an order requiring compliance.
For a broader explanation of HCD’s enforcement authority, see the firm’s article on how HCD enforcement power works. This section focuses on how that authority becomes relevant once a jurisdiction has actually fallen out of compliance.
In July 2026, the Attorney General’s Office and HCD filed writ petitions against five California cities, following referral after notices of violation, a 30-day response period, and offered meetings to discuss corrective measures. A separate, earlier case against another California city resulted in a Superior Court order requiring adoption of a compliant Housing Element and restricting the city’s land use authority until that requirement was satisfied.
California courts have also held that an HCD finding of substantial compliance does not insulate a jurisdiction from a separate challenge to the element’s legal sufficiency.
What Financial Penalties Can a Noncompliant California City Face?
California law authorizes court-imposed penalties for persistent Housing Element noncompliance, and those penalties have been actively enforced in 2026.
- Government Code section 65585: Authorizes a court to penalize a jurisdiction that fails for a year to comply with a court order to bring its Housing Element into compliance, at $10,000 to $100,000 per month, escalating to $60,000 to $600,000 per month for continued noncompliance.
- Government Code section 65009.1 (Senate Bill 1037): A separate track, effective January 1, 2025, setting mandatory minimum penalties of $10,000 to $50,000 per month for a jurisdiction that misses its Housing Element adoption deadline, distinct from the court-order penalties under section 65585.
In 2026, a Superior Court applied the Senate Bill 1037 penalty to order Huntington Beach to pay $160,000, a retroactive $10,000-per-month penalty back to the statute’s effective date, rising to $50,000 per month when the city did not adopt a compliant Housing Element by the court’s deadline.
The specific penalty that applies to any given jurisdiction depends on which statutory violation is at issue, whether a court has already ordered corrective action, how long noncompliance continues, and the specific enforcement mechanism HCD or the Attorney General pursues. Penalties are not a fixed, uniform amount that applies identically to every Housing Element violation.
What Does Housing Element Noncompliance Mean for Developers and Property Owners?
A jurisdiction’s compliance status is a practical factor in site selection and project strategy, not only a matter for the local government.
- Due diligence: Checking a jurisdiction’s current compliance status, including whether required rezoning is complete, can affect an acquisition’s development assumptions.
- Builder’s Remedy opportunities: A project meeting the current statutory definition may be eligible for Builder’s Remedy treatment, affecting achievable density and applicable standards.
- Application timing: Because eligibility generally turns on compliance status when an application is deemed complete, timing relative to an anticipated decertification or recertification can matter significantly.
- Litigation risk: Disputes over application completeness, project eligibility, or a jurisdiction’s actual status can lead to litigation for either side.
- Project timing and uncertainty: A jurisdiction actively working through HCD’s process may present a shifting regulatory picture over a project’s life.
Noncompliance can create legal opportunities for a qualifying project, but it does not guarantee a favorable outcome. Statutory eligibility, documentation, and the facts of the application still control.
How Can a City Return to Housing Element Compliance?
A jurisdiction can work toward restored compliance by addressing the specific deficiency HCD identified: revising a noncompliant element, completing committed programs, finishing a required rezoning, or submitting documentation showing the issue is resolved.
HCD reviews the submission and, if it meets statutory requirements, issues a renewed finding of substantial compliance. Recertification restores the legal protections of an active finding, but it does not retroactively undo consequences such as Builder’s Remedy eligibility for applications already deemed complete during the noncompliance period.
When Should a Developer, Property Owner, or Local Government Consult a Land Use Lawyer?
Legal advice is useful earlier than many parties expect, for those pursuing housing opportunities and for jurisdictions managing HCD’s process alike.
For developers and property owners
- A project may be affected by a city’s noncompliant Housing Element.
- A potential Builder’s Remedy issue has arisen, including questions about application timing or completeness.
- A city has denied or significantly delayed a project that may qualify for statutory protection.
- Required rezoning in the jurisdiction has not occurred on schedule.
- A Housing Element status question affects due diligence before a property acquisition.
- Litigation or an administrative dispute over a project is developing.
For local governments
- HCD has issued a notice of potential violation or notice of non-compliance.
- A corrective action deadline is approaching.
- Required Housing Element programs or rezoning are behind schedule.
- The jurisdiction faces, or anticipates, referral to the Attorney General.
What This Means in Practice
A California city’s Housing Element status affects more than its planning documents. Noncompliance can trigger HCD enforcement, change how the jurisdiction must treat housing applications, create Builder’s Remedy exposure, affect eligibility for certain state funding, and lead to litigation or court-ordered penalties.
The specific consequences depend on the type of violation, the jurisdiction, how long noncompliance has continued, and the facts of the project or dispute at issue.
Kassouni Law’s California land use practice advises developers, property owners, and local governments on Housing Element compliance, Builder’s Remedy eligibility, and related litigation. Contact the firm to discuss a specific Housing Element compliance question or project.
Frequently Asked Questions
What happens when a California city loses Housing Element compliance?
The jurisdiction loses the protections tied to an active compliance finding and can face HCD’s enforcement process, from corrective action deadlines through decertification and referral to the Attorney General. Depending on the violation, it may also face Builder’s Remedy exposure, funding consequences, and court-ordered penalties.
Can a city lose its Housing Element compliance after adoption?
Yes. An adopted, previously compliant Housing Element does not guarantee ongoing compliance. HCD can decertify a jurisdiction that fails to implement required programs, fails to complete a required rezoning, or otherwise violates state housing law after adoption.
Can Builder’s Remedy apply when a city is not Housing Element compliant?
Potentially, yes, for projects meeting the statutory definition in effect at the time. A local government generally cannot deny a qualifying project for inconsistency with zoning or the General Plan if the element was out of substantial compliance when the application was deemed complete, subject to the density, site, and affordability rules effective January 1, 2025.
Can HCD take legal action against a city that is out of compliance?
HCD can refer a noncompliant jurisdiction to the California Office of the Attorney General, which can pursue a court action, including a writ petition seeking an order requiring compliance. HCD’s process generally includes notice and a chance to respond before referral.
How does Housing Element noncompliance affect developers?
It can expand the range of projects eligible for streamlined review or Builder’s Remedy treatment, while creating uncertainty tied to the jurisdiction’s shifting status. Confirming current statutory eligibility and application timing before relying on that status is essential.
Can a noncompliant city face financial penalties?
Yes, through court action. California law authorizes penalties for jurisdictions that violate a court order to bring a Housing Element into compliance. Penalties can reach $600,000 per month as noncompliance continues. A separate provision took effect on January 1, 2025. It resulted in a $160,000 court-ordered penalty against Huntington Beach in 2026.
This article provides general legal information about California Housing Element law and does not constitute legal advice. The consequences of Housing Element noncompliance depend on the specific violation, jurisdiction, timing, and facts involved. Laws and individual circumstances vary. Please consult a qualified California land use attorney about your specific situation.
