To spur development of housing statewide, California requires cities to zone for new housing in a plan it must approve. Some cities have missed the state’s deadline for zoning and could face penalties, with one California city recently “settling” with the state after failing to complete the mandate.

The plan, known as a Housing Element, is due every eight years, and the most recent cycle was due in October 2022.

Last week, the City of Fullerton announced it had reached an agreement with California for not having an approved plan and will submit such by the end of the year.

In a press release Jan. 18, the day the agreement was reached, Fullerton City Manager Eric Levitt said the city is committed to meeting the state’s requirement, while also “attempting to balance that requirement with the City’s commitment to maintaining a high quality of life for current and future residents.”

According to the city, the state’s recent requirement that it zone for over 13,000 housing units is a 600 percent increase from the last cycle, which required it zone for just under 2,000 units.

Other cities—such as Huntington Beach, which is in a lawsuit with the state over the same issue—argue that such zoning could lead to too much density and overcrowding.

The zoning must also set aside units as “affordable” for individuals earning very low, low, and moderate incomes.

In Fullerton, over 5,000 units of housing must be zoned, per the most recent state mandate, as such.

Under the settlement, the city has until November to complete their zoning plan and until the end of December to update its zoning code to allow for more density.

City officials said in their press release that their delay in getting an approved plan was due, in part, to a turnover in staff and consultants.

“The City of Fullerton is more than two years late in adopting a compliant housing element, but this settlement lays out a clear path to compliance with milestones, as well as consequences if they fail to meet those commitments,” Director of California’s Department of Housing and Community Development Gustavo Velasquez said in a press release issued by Gov. Gavin Newsom’s office.

Mr. Newsom, in his own statement, said California is facing a housing crisis and cities must be part of the solution.

“More communities must step up and do the right thing by building their fair share of housing or be held accountable,” he said.

Mr. Velasquez, in the same announcement, said the department will continue to work with cities to meet the state’s plan for housing.

“[The Department of Housing and Community Development] takes enforcement of our state housing laws seriously. We are committed to helping Fullerton and cities and counties across the state adopt and implement pro-housing policies, and we are focused on ensuring we each do our part to address the housing needs of Californians at all income levels,” he said.

The recent settlement also settles a lawsuit on the same issue versus Fullerton by the nonprofit Californians for Homeownership.

According to the state’s housing department, 82 percent of cities currently have approved housing elements.

Until Fullerton has an approved plan—under the settlement— it must also not deny housing projects inconsistent with its current zoning. Developers are able to bypass such issues as density or parking requirements in cities without an approved plan.

Such projects must include at least 20 percent of units sold as affordable, according to officials.