The city of Norwalk, California, has agreed to repeal a ban on homeless shelters and pay $250,000 for new affordable housing projects to settle a state lawsuit, state officials announced on Sept. 5.
The suburb of Los Angeles will also submit reports to the California Department of Housing and Community Development on the status of affordable housing projects to allow the state to monitor the city’s actions, according to the agreement.
The settlement, if approved by the court, will also require the city to create an affordable housing trust fund.
“The Norwalk city council’s failure to reverse this ban without a lawsuit, despite knowing it is unlawful, is inexcusable,” California Gov. Gavin Newsom said in a statement.
The Norwalk City Council unanimously passed an urgency zoning ordinance on Aug. 6, 2024, imposing a 45-day ban on new emergency shelters, supportive housing, single-room occupancy housing, and transitional housing.
In response to the housing ban, Newsom, California Attorney General Rob Bonta, and California Director of Housing Development Gustavo Velasquez filed a lawsuit in November 2024 against the city, located about 15 miles south of Los Angeles. The state alleged that the city’s ban violated several state laws and asked the court to repeal them.
In October, California also decertified Norwalk’s housing sector, making the city ineligible for housing and homelessness funding. The city could also no longer deny permits to “builder’s remedy” affordable housing projects, according to Bonta’s office.
Velasquez said, “This case should send a clear message: When a city’s leaders disregard the law to block housing—especially housing for those in most need—this Administration will take swift legal action.”
The settlement ensures that Norwalk will accept and process housing project applications, contribute funding for affordable housing development, and work with Los Angeles County to address homeless housing needs, according to Velasquez.
The city asked the court to dismiss the lawsuit, but the request was denied in February.
According to Norwalk officials, the city’s homeless housing ban was not about neglecting homeless housing.
A homeless RV encampment in front of a Los Angeles County "Cooling Center" site in Westchester, Calif., on Sept. 4, 2022. (John Fredricks/The Epoch Times)
“The City’s moratorium was never about turning our back on those in need—it was about pressing pause to ensure that the mistakes of past projects weren’t repeated in Norwalk,” a city spokesman told The Epoch Times in an email. “Too often, cities have seen homeless programs rushed into place without adequate safeguards, accountability, or coordination. That approach fails both the unhoused and the broader community.”
The city issued the local ordinance weeks after Newsom issued an executive order that urged local governments to use state funding to address encampments and provide homeless people with care, housing, and supportive services.
The city had received nearly $29 million in housing and homelessness funds since 2019, according to the state.
Norwalk has seen a significant decline in the number of homeless people taking refuge on its city streets over the past year, according to the latest homeless count. The number of homeless people dropped by 67 percent in 2025 compared with 2024 numbers, and the number of encampments has fallen by 45 percent, according to the city.
Norwalk Mayor Tony Ayala attributed the improvement to hands-on work in neighborhoods by field staff and service providers. The city’s social services staff has connected more than 150 people to support agencies since 2024, and 108 have successfully transitioned into housing.
The local housing moratorium in 2024 put a pause on homeless shelters in Norwalk as a way to ensure that the county would collaborate and include safety measures on projects, according to the city.
California’s legal strike against Norwalk was one of several actions taken by Newsom’s administration to compel local governments to stick to the state’s affordable housing laws.
