- “This case should send a clear message: When a city’s leaders disregard the law to block housing — especially housing for those most in need — this Administration will take swift legal action.” – California Department of Housing and Community Development (HCD) Director Gustavo Velasquez
by Vanguard Staff
LOS ANGELES — California Attorney General Rob Bonta, Governor Gavin Newsom, and California Department of Housing and Community Development (HCD) Director Gustavo Velasquez announced a settlement Friday with the City of Norwalk, resolving a lawsuit over the city’s ban on new housing for some of the state’s most vulnerable residents.
The lawsuit, filed Nov. 4, 2024, alleged that Norwalk’s prohibition on emergency shelters, supportive housing, single-room occupancy housing, and transitional housing violated multiple state laws.
The state sought an order compelling the city to repeal the ban and comply with its obligations under California housing law. On Feb. 19, 2025, the Los Angeles County Superior Court denied Norwalk’s attempt to dismiss the case, paving the way for the settlement announced Friday. The agreement is subject to court approval.
“Before filing our lawsuit, Governor Newsom, HCD Director Velasquez, and I warned the City of Norwalk on several occasions that there would be serious consequences if it moved forward with its unlawful housing ban. Regrettably, our warnings went unheeded, and we were forced to take legal action,” Bonta said.
“We are more than willing to work with any city or county that wants to do its part to solve our housing crisis. By that same token, if any city or county wants to test our resolve, today’s settlement is your answer. All of us have a legal and moral responsibility to help — not hurt — those struggling to keep a roof over their heads or lacking housing altogether.”
The settlement requires Norwalk to repeal its housing ban at its next City Council meeting, or at a special meeting convened for that purpose. The city must also create a local housing trust fund dedicated to affordable housing development, deposit $250,000 into the fund, and submit procedures for administering it.
In addition, Norwalk will be required to implement overdue housing element programs, notify stakeholders that the ban has been repealed, and ensure that housing applications are processed in accordance with state law.
Governor Newsom condemned the city’s actions, saying Norwalk should never have forced the state to file suit.
“The Norwalk City Council’s failure to reverse this ban without a lawsuit, despite knowing it is unlawful, is inexcusable,” Newsom said. “No community should turn its back on its residents in need — especially while there are people in your community sleeping on the streets. No city is exempt from doing their part to solve the homelessness crisis.”
Velasquez emphasized that the settlement underscores the state’s enforcement approach.
“This case should send a clear message: When a city’s leaders disregard the law to block housing — especially housing for those most in need — this Administration will take swift legal action,” Velasquez said. “This settlement ensures Norwalk will accept and process housing project applications, contribute meaningful funding for affordable housing development, and coordinate with Los Angeles County to address the needs of people experiencing homelessness. Going forward, HCD will continue to provide critical oversight to ensure accountability to that pledge.”
The terms of the settlement are extensive. In addition to repealing its moratorium and funding the housing trust, Norwalk must submit quarterly reports to HCD for the duration of its Sixth Housing Element Cycle, which runs from 2021 to 2029.
These reports must include updates on all proposed housing projects involving affordable housing or supportive housing, including applications, withdrawals, and denials. If the city denies an application, it must provide detailed findings demonstrating consistency with state law and its obligation to affirmatively further fair housing.
The city must also amend its housing element to acknowledge that the moratorium disproportionately impacted vulnerable populations, including people experiencing homelessness. It will be required to adopt new programs to address these harms and to proactively coordinate with Los Angeles County and the state to meet the needs of special-needs populations.
Norwalk is further required to post a public notice on its official website within 15 days of the repeal, stating clearly that the moratorium has been lifted and that applications for shelters, supportive housing, single-room occupancy, and transitional housing will be accepted without the restrictions imposed by the previous ordinances.
This notice must remain on the city’s website for 180 days and also be sent directly to developers, city staff, and local officials involved in zoning and land use.
The agreement also sets strict deadlines for the city to bring its housing policies into compliance. Norwalk must fully implement overdue housing element programs by the end of 2025, and its housing element must be amended to reflect both the settlement terms and the city’s obligation to foster inclusive communities. HCD will provide technical assistance and oversight throughout the process, with the authority to revoke certification of Norwalk’s housing element if the city fails to comply.
Civil penalties of $10,000 per month, dating back to the city’s adoption of the ban in August 2024, have been assessed but held in abeyance. If Norwalk violates the settlement terms, those penalties will become immediately due, and the state may pursue additional remedies in court.
The conflict traces back to Aug. 6, 2024, when the Norwalk City Council unanimously passed an urgency ordinance imposing a 45-day moratorium on new supportive housing. The following month, the council extended the moratorium for nearly a year. Both actions were taken without legislative findings or public deliberation, requirements under California law for such ordinances.
In response, HCD issued a Notice of Violation in September 2024, warning the city to repeal the ban. Instead, the council extended it, leading HCD to decertify Norwalk’s housing element on Oct. 3, 2024. Decertification stripped the city of eligibility for certain state housing and homelessness funds and triggered the state’s lawsuit one month later.
The settlement, once approved by the court, will end the litigation and resolve all claims related to the moratorium. However, the Attorney General and HCD retain authority to investigate and enforce state housing laws against Norwalk if future violations occur.
Follow the Vanguard on Social Media – X, Instagram and Facebook. Subscribe the Vanguard News letters. To make a tax-deductible donation, please visit davisvanguard.org/donate or give directly through ActBlue. Your support will ensure that the vital work of the Vanguard continues.
