These Cities Are Using a Controversial New Tactic to Sidestep California Housing Laws

When a judge ruled recently that a controversial state housing law did not apply to a handful of southern California cities, Julie Testa saw it as an invitation.

The late April opinion from Los Angeles County Judge Curtis Kin held that a 2021 state law letting homeowners split up their houses into as many as four separate units regardless of local zoning restrictions had no effect in Redondo Beach, Carson, Torrance, Whittier or Del Mar. The reason: The five SoCal jurisdictions are “charter cities” — jurisdictions with their own municipal constitutions that grant them extra independence from state law.

Testa, the vice mayor of Pleasanton, wanted what Redondo Beach was having. She wanted to turn her bedroom community east of San Francisco Bay into a charter city.

“The state Legislature has declared war on our cities,” Testa said. “We think that this is a turning of that tide.”

Since first winning local office in 2020, Testa has spent much of her short political career chafing against the spate of new state housing laws that force local governments to automatically approve apartment buildings, duplexes and backyard cottages. She cobbled together a loose group of like-minded politicians under the banner of the California Alliance of Local Electeds. A few days after Kin’s ruling, the group’s weekly Zoom meeting saw near-record turnout, she said.

Now Pleasanton is one of at least three California cities, all San Francisco Bay Area suburbs, that have taken the first step toward adopting a charter since the April ruling. Testa and three of her four city council colleagues instructed city staff to look into making the transition in mid-May. City councils in nearby Brentwood and the hyper-affluent Silicon Valley suburb of Atherton followed suit this month.

Becoming a charter city — as roughly 120 of California’s 482 cities have done over the course of the state’s history — requires local voter approval. Before that, city officials have to actually write a charter, a comprehensive, technical governing document that covers everything from local election procedure to the dos and don’ts of municipal debt management. The three cities are probably kicking off that lengthy process too late for this November’s election, meaning that voters in the three cities won’t weigh in until at least 2026 — if at all.

“We will see a lot of irreversible consequences in that period of time, so I am disappointed, but I do believe that we must do what we can do to defend our constitutional right to local control,” Testa said.

Jovita Mendoza, the Brentwood council member who is pushing the charter effort in her city, said housing policy isn’t her sole motivation. Charter cities have more flexibility over contracting and purchasing policies, election procedures and taxation. However, the recent ruling out of Los Angeles “definitely helped” provide fresh inspiration.

Brentwood’s council voted unanimously to begin the process last Tuesday. At a late evening hearing on the subject, Planning Commissioner Rod Flohr endorsed the idea.

“Most of the public is still kind of unaware of how restricted we’ve become, almost to the point where it feels sometimes like the planning commission and city council can’t really do anything anymore,” he said. “This may be our only avenue to…keep working to make Brentwood the jewel of east county.”

Gov. Gavin Newsom’s administration has ordered local governments to plan for an additional 2.5 million new homes through the end of the decade in an effort to bring down prices and rents. That’s part of a broader political shift in Sacramento as the governor, the attorney general and the Legislature have more aggressively promoted more housing, even over the objections of local elected officials and residents.

Mendoza in Brentwood was one of the chief proponents of a proposed statewide ballot initiative that would have allowed local governments to override state land use laws. The measure failed to gather enough signatures for this year’s election.

The April ruling opened up a new potential strategy. “If the charter cities win on appeal, I think you’re going to see it happening more and more,” she said.

On housing, the tie often goes to the state

Many legal experts are skeptical that the ruling will hold — and if it does, whether that would be the death blow to state land use authority that many local control advocates hope it will be.

“If I were looking to become a charter city in order to avoid (the state’s duplex law), I would not waste my time,” UC Davis law professor Darien Shanske said. “This decision will be overturned.”

Since the 1880s, California cities have come in two distinct flavors: “General law” cities, which have to govern themselves under rules set forth by the state Legislature, and charter cities, which the state constitution grants autonomy regarding “municipal affairs.”

Unhelpfully, the constitution doesn’t actually specify what those “municipal affairs” are. That makes the precise scope of a charter city’s political autonomy from the state an uncertain and moving target that courts have had to address on a case-by-case basis.

As state lawmakers have unleashed a raft of pro-construction bills over the last decade, the courts have typically allowed them to apply to charter and general law cities alike.

“The courts generally have not been very receptive to charter city arguments given the housing crisis,” said Barbara Kautz, a land use attorney who regularly represents cities and counties.

Kautz’s law firm, Goldfarb & Lipman, has represented Pleasanton, Brentwood and Atherton but is not doing so in their current quests to become charter cities.

The April ruling is a notable exception to the trend. But it’s also an exceedingly narrow one and not something on which to hang a legal revolution in land use policy, Kautz said. “As a long-term strategy to avoid (state housing law), I just don’t know if it would have any effect,” she said.

What the ruling does — and doesn’t — say

California courts have generally let the Legislature steamroll local authorities, even in charter cities, if state lawmakers can prove that they are addressing a matter of “statewide concern” and that the bill they’re passing is narrowly tailored to address that concern.

The 2021 law itself specifies that the “statewide concern” in question is to ensure “access to affordable housing.”

Unfortunately for the state, “affordable housing” has multiple definitions. Affordable housing might refer to units that are legally required to be reserved for people making under a certain income with regulated rents or prices, sometimes called “deed-restricted affordable housing.” Or the term can simply refer to housing that’s cheap.

In his ruling, Kin concluded that the Legislature, in laying out its “statewide concern,” must have meant “affordable” in the first, deed-restricted sense. Because letting homeowners split their houses into duplexes “has, at best, an attenuated connection to affordable housing,” he wrote, the law wasn’t written narrowly enough to advance its stated goal and, therefore, doesn’t have the authority to trample over the rights of charter cities.

In short, the ruling dings the state duplex law because it didn’t justify its intent with the right term. UC Davis’ Shanske referred to the ruling jokingly as a “Simon didn’t say” legal test.

Kin has yet to submit a final judgment, which will clarify whether the ruling applies to just the five cities that sued or to every one of the more than 100 charter cities across California.

What the ruling doesn’t say is that charter cities are exempt from the duplex law because the state fundamentally lacks the authority to regulate how homes can be divided up. Nor does it say that charter cities are exempt from state housing requirements in general, which would have been at odds with a slew of recent court rulings.

Chris Elmendorf, one of Shanske’s colleagues at UC Davis School of Law who regularly opines on housing policy on social media, called Kin’s conclusion “a weird, narrow decision that turns on a lawyerly sleight of hand.”

Even some of those who welcomed the ruling as a victory for local control were tempered in their enthusiasm, if only because the ruling seemed to invite the Legislature to simply fix its wording with another bill. San Diego Democratic Sen. Toni Atkins, who authored the four-unit housing law, is working on a bill this year, Senate Bill 450, which aims to make it harder for local governments to obstruct the earlier duplex law by delaying approvals or imposing costly or unworkable size, design and setback requirements. An analysis last year by the UC Berkeley Terner Center found that the duplex law had resulted in precious little new housing, partially due to such restrictions.

Asked whether Atkins plans to respond to Kin’s ruling with a legislative fix, the senator’s spokesperson, Meredith McNamee, said in a statement that the senator believes “some legislative clean-up” would improve the implementation of the law she wrote.

The California Justice Department, which represented the state in the Redondo Beach case, has already filed a notice of appeal.