- The court concluded that Redondo Beach’s overlay strategy ‘fails to satisfy section 65583.2(h)(2)’s mandatory minimum density requirement of 20 units per acre because the underlying commercial and industrial zoning permits development of identified sites within the overlay zone that does not include housing, i.e., that permits construction with zero residential units.’
In a sweeping appellate decision with major implications for cities across California, the Second District Court of Appeal has struck down the City of Redondo Beach’s housing element, ruling that its use of residential overlay zones on commercial and industrial properties violates the state’s Housing Element Law.
The opinion, certified for publication on Oct. 10, 2025, in New Commune DTLA LLC v. City of Redondo Beach (B336042), holds that Redondo Beach’s housing plan fails to comply with mandatory density and residential-use requirements in Government Code section 65583.2(h)(2). The ruling means the city’s housing element is invalid — and, as a result, the city may again be vulnerable to “Builders Remedy” projects that bypass local zoning restrictions.
The three-judge panel found that “an overlay cannot be used to satisfy the minimum density and residential use requirements set out in section 65583.2(h)(2), where the base zoning expressly permits development that does not include housing.” In other words, because the city’s commercial and industrial base zoning still allowed 100 percent nonresidential projects, the court held that the overlay violated the state’s minimum housing density and residential-use mandates.
“We reverse,” Justice Klatchko wrote for the unanimous panel. “An overlay cannot be used to satisfy the minimum density and residential use requirements set out in section 65583.2(h)(2), where the base zoning expressly permits development that does not include housing.”
The court concluded that Redondo Beach’s overlay strategy “fails to satisfy section 65583.2(h)(2)’s mandatory minimum density requirement of 20 units per acre because the underlying commercial and industrial zoning permits development of identified sites within the overlay zone that does not include housing, i.e., that permits construction with zero residential units.”
The opinion added that the city’s overlay “violates section 65583.2(h)(2)’s requirement that at least 50 percent of lower-income housing sites be ‘designated for residential use and for which nonresidential uses or mixed uses are not permitted’ because it preserves underlying commercial and industrial uses and fails to satisfy the mixed-use exception.”
The ruling follows closely on the heels of Martinez v. City of Clovis, a 2023 case that first established the enforceability of the statutory “minimum density” requirement. The Redondo Beach decision expands on Clovis, making clear that overlays on commercial or industrial land cannot be used to meet state housing obligations when the underlying zoning still allows projects with “zero residential units.”
The justices noted that “section 65583.2(h) clearly imposes a minimum density requirement when a jurisdiction is required to rezone sites to accommodate a shortfall for the current planning period.”
They rejected the city’s argument that overlays merely need to permit residential densities of 20 units per acre, declaring that the statute’s use of “minimum” sets a binding floor. “‘Minimum’ means the least acceptable quantity possible,” the court wrote, quoting definitions from Black’s Law Dictionary and Merriam-Webster to illustrate that a statutory minimum “constitutes the smallest acceptable or possible quantity in a given case.”
According to the court, Redondo Beach’s overlay program conflicted with both the “default” and “mixed-use” pathways permitted under section 65583.2(h)(2). The court explained that “at least 50 percent of the lower income housing need shall be accommodated on sites designated for residential use and for which nonresidential uses or mixed uses are not permitted.”
The city, however, “preserves underlying commercial and industrial zoning that expressly permits nonresidential uses including retail, office, manufacturing, and warehousing.”
“The City cannot simultaneously permit and prohibit a particular use on a single site,” the panel wrote. “Because the City’s overlay maintains commercial and industrial zoning rights that section 65583.2(h)(2) requires be eliminated, the overlay fails as a matter of law.”
The decision also rejected Redondo Beach’s claim that it qualified for the “mixed-use exception,” which allows some lower-income housing to be placed on mixed-use sites if “residential use occupy[s] no less than 50 percent, and up to 100 percent, of total floor area of projects on the designated sites.”
The court ruled that “by preserving the underlying commercial and industrial zoning, thereby allowing future development without any residential component, the overlay fails to meet the requirement that residential use occupy no less than 50 percent, and up to 100 percent, of total floor area of projects on the designated sites.”
The opinion traces the history of state housing law reforms, noting that before 2017, “local governments were able to ‘circumvent’ their obligation to accommodate affordable housing by ‘relying on sites that aren’t truly available or feasible for residential development.’”
The Legislature responded with Assembly Bill 1397, which required cities to demonstrate that housing sites “can realistically be accommodated” and to show that nonvacant sites were “likely to be discontinued during the planning period.”
“AB 1397 codified the goal of the Housing Element Law,” the court explained, “which was not merely to require identification of sites that could theoretically accommodate housing need, but to encourage development to meet housing needs.”
The court added that AB 1690, enacted in 2014, was “designed to clarify the Legislature’s intent that housing laws expand realistic development opportunities for affordable lower income housing.”
The justices found that the legislative history “evidences the Legislature’s intent to prevent local jurisdictions from including in their housing element sites that have little to no probability of being used to meet identified housing needs.”
Beyond the overlay zoning violations, the court also struck down Redondo Beach’s inclusion of a key nonvacant site—the Inglewood Avenue property leased to Vons supermarket, finding that the city “has not presented substantial evidence that Vons will discontinue its existing use on the Inglewood Avenue site or that this use will not impede the development of housing.”
The court noted that, under the lease, “Vons has the absolute right to veto the development of housing on the site,” and therefore the site could not be counted toward the city’s lower-income housing capacity.
The ruling reaffirms that HCD’s certification of a housing element cannot override statutory noncompliance. “Courts remain the final arbiters of statutory meaning,” the panel wrote, rejecting the city’s argument that it should defer to the Department of Housing and Community Development’s approval. “HCD’s approval of the housing element here does not cure the myriad defects we have identified.”
The decision orders the lower court to issue a writ of mandate compelling Redondo Beach to revise its Sixth Cycle 2021–2029 Housing Element “consistent with this opinion.”
The court concluded, “We recognize the City expended significant time and energy preparing the housing element and responding to HCD findings. We also recognize the potential practical problems inherent in rezoning.
“But the Legislature has established minimum density requirements and cabined the discretion of local jurisdictions to prevent them from overriding those requirements. We decline the invitation to reconsider the wisdom or practicality of this approach.”
The decision, now binding precedent statewide, is expected to have far-reaching consequences. Dozens of California cities have relied on similar overlay strategies to meet their RHNA obligations, leaving commercial or industrial parcels zoned for 100 percent nonresidential use while adding “housing overlays” on top.
Those housing elements may now be deemed noncompliant under this ruling, potentially triggering renewed “Builders Remedy” opportunities for developers in cities without valid housing plans.
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“…and cabined the discretion…”
I had to look that one up.
cab·in
past tense: cabined; past participle: cabined
“confine within narrow bounds.”
The Court’s decision makes total sense to me. If the underlying zoning allows for a discretionary decision by the property owner/developer to not include housing (as happened in the case of University Mall here in Davis) then trying to count the site is simply Emperor’s New Clothes.
The bigger issue with this however is the probably of development requirement. As Chris Elmendorf put it: “The decision also has big implications for sites analysis. Is p(dev) approach now de facto required?”