State revokes Norwalk’s eligibility for housing, homeless funds

The state has declared Norwalk is out of compliance with housing law and will no longer receive funding for housing projects and efforts to address homelessness, Gov. Gavin Newsom announced Thursday.

The move is the latest in a back-and-forth between the governor and Norwalk City Council, which last month extended a moratorium on constructing homeless shelters.

“After the state has provided cities and counties with unprecedented funding to address the homelessness crisis, it’s beyond cruel that Norwalk would ban the building of shelters while people are living on the city’s streets,” Newsom said in a statement. “This crisis is urgent, and we can’t afford to stand by as communities turn their backs on those in need. No more excuses — every city, including Norwalk, must do its part and follow state housing laws.”

The California Department of Housing and Community Development’s revocation of Norwalk’s compliance with the state housing-element law makes Norwalk ineligible for significant funding aimed at helping local-level governments increase affordable housing and reduce homelessness. The HCD action also means the city can no longer deny “builder’s remedy” affordable housing projects.

The builder’s remedy is a legal mechanism states use to hasten the construction of affordable housing when a local government does not comply with housing laws.

Last month Newsom threatened to sue Norwalk if it persists with upholding the shelter ban, and he reiterated the lawsuit option Thursday.

Creating more housing is a central part of state and local officials’ efforts to reduce homelessness in recent years. State law requires all cities to develop a housing strategy “to ensure that they are planning for enough affordable housing for their community,” according to Newsom’s office.

State officials said Norwalk has failed to meet its housing goals and the shelter ban violates state law because the city has not added enough housing. The city has issued permits for 175 units during the current housing element cycle, which is 3.5% of Norwalk’s 5,034 assigned “Regional Housing Needs Allocation,” or the number of units required to ensure the city has an adequate supply of housing for the local rental market.

“The City of Norwalk’s actions have placed them in violation of state housing law, and therefore their housing element is no longer in compliance,” HCD Director Gustavo Velasquez said in a statement. “Our Housing Accountability Unit provided the city clear guidance — with full transparency on what our next steps would be if they did not repeal this egregious ordinance. Instead of working to correct their missteps, they dug in their heels and are now ineligible for key funding and subject to the builder’s remedy.”

Norwalk city officials did not immediately respond to a request for comment on the state’s latest action.

“Governor Newsom’s threats of a lawsuit overlook Norwalk’s long-standing and effective efforts to address homelessness,” Mayor Margarita Rios said in a statement last month. “The city has made significant strides, including opening affordable housing for homeless veterans, supporting L.A. County’s Homekey project, funding its own homelessness engagement teams, and being one of the few cities in L.A. County with a dedicated Social Services Department to assist people experiencing homelessness.

“Norwalk also hosted one of the largest Project Roomkey sites during the pandemic,” Rios said. “Despite these efforts, Norwalk has received no Measure H funding, forcing the city to use its own resources to manage the fallout from abandoned state-mandated programs, which puts both residents’ safety and the city’s finances at risk. We urge Governor Newsom to recognize Norwalk’s proactive measures and provide direct resources to support its ongoing efforts.”

According to Newsom’s office, Norwalk’s policies have overtly blocked access to homeless support, shelter and housing despite the city’s acceptance of nearly $29 million in state housing and homelessness funds. On Aug. 6, the City Council adopted a 45-day urgency ordinance imposing a moratorium on emergency shelters, single-room occupancy housing, supportive housing and transitional housing.

On Sept. 16 the HCD notified Norwalk of the violation, and the next day the City Council voted to extend the ordinance banning shelters an additional 10 months and 15 days.

The state granted the city an extension to respond to its violation warning, but Norwalk officials failed to repeal the ordinance or take steps to begin the repeal process, state officials said.

“Although city council members expressed an intent not to immediately enforce the moratorium, there is no formal stay or anything that would prevent the city from enforcing the moratorium as soon as it wishes, and the city has refused to commit to repealing it in the near future,” according to a statement from Newsom’s office.

On Tuesday, the council directed city staff members to not enforce the homeless housing moratorium.

Norwalk’s shelter moratorium violates the state’s Housing Crisis Act, the Anti-Discrimination in Land Use Law, Affirmatively Furthering Fair Housing, and the Housing Element Law, officials said.

Newsom’s office touted the $40 billion spent to boost housing and more than $27 billion to address homelessness since the governor’s 2019 election.

In July Newsom penned an executive order prodding local governments to put the state funding to use to reduce the number of encampments and assist people living in the encampments with the care, housing and supportive services.

The HCD’s Housing Accountability Unit issued the violation notice to Norwalk. Newsom established the unit in 2021, and the governor’s office credited it with the state’s 15-year high in housing starts.

So far the unit has supported the construction of more than 7,500 housing units, including more than 2,700 affordable housing units, through enforcement actions and by working with local jurisdictions to ensure compliance with housing law. This year the unit expanded to include a focus on homelessness, including compliance with state laws as they pertain to homeless housing.

Norwalk’s violation notice is the Housing Accountability Unit’s first enforcement action related to homelessness, officials said.

Updated Oct. 3, 2024, 10:22 a.m.