California reparations panel wants to give state agency veto power over local real estate decisions

California’s reparations task force is calling for the state legislature to require all cities and counties with allegedly segregated neighborhoods to submit all their real estate ordinances to a state agency for approval based on whether they maintain or lessen “residential racial segregation.”

The task force, created by state legislation signed by Gov. Gavin Newsom in 2020, formally approved last weekend its final recommendations to the California Legislature, which will decide whether to enact the measures and send them to the governor’s desk to be signed into law.

The recommendations include several proposals meant to address “housing segregation” and “unjust property takings” that contributed to alleged systemic racist against Black Californians. Among the most controversial of the housing proposals is one that would seemingly hand over control of local land use decisions to a state agency that would approve ordinances based on whether they maintain or decrease segregation. 

“Residential zoning ordinances have been used for decades in California to prevent African Americans from moving into neighborhoods, thereby maintaining residential segregation,” the reparations committee writes in the final report outlining its proposals. “Various laws were also used to prevent additional housing from being built, effectively shutting out African Americans.”

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To address local zoning laws that “reinforce and recreate this systemic housing segregation,” the task force continues, the legislature should identify California cities and counties that have historically redlined neighborhoods – areas flagged as risky investments where residents are therefore denied financial services such as loans or insurance – and whose “current levels of residential racial segregation are statistically similar to the degree of segregation in that city or county when it was redlined.”

After these areas are identified, the task force calls on the legislature to “require identified cities and counties to submit all residential land use ordinances for review and approval by a state agency, with the agency rejecting (or requiring modification of) the ordinance if the agency finds that the proposed ordinance will maintain or exacerbate levels of residential racial segregation.”

In other words, if a city or county with a neighborhood deemed segregated wanted to implement an official change involving real estate, that change would need to be approved by a state agency based on whether it made the area more racially diverse.

The task force recommends the removal of this process for “additional review and approval” of the flagged cities and counties only if the city or county “eliminates a certain degree of housing segregation in its geographic territory.”

However, the reparations committee suggests an alternative option as well for such localities: creating an “administrative appeal board to review challenges to developmental permitting decisions or zoning laws” and basing decisions on whether development permits and zoning requirements are deemed “to maintain or reinforce residential racial segregation.”

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Beyond an official review process, the task force also proposes increasing home ownership among Black Californians by providing assistance through either direct financial aid or subsidized down payments, below-market-rate mortgages, and homeowner’s insurance. 

Another recommendation is to provide a so-called “right to return” for Black residents “displaced” by development projects, “racially restrictive covenants,” “state-sanctioned violence,” and “racial terror” to come back to those areas to live.

“The task force recommends the legislature enact measures to support a right to return for those displaced by agency action, restrictive covenants, and racial terror that drove African Americans from their homes,” the committee writes. “The right to return should give the victims of these purges and their descendants preference in renting or owning property in the area of redevelopment. The right to return should extend to all agency-assisted housing and business opportunities in the redevelopment project area.”

The task force additionally wants state lawmakers to give “preference in rental housing, home ownership, and business opportunities for those who were displaced or excluded from renting or owning property in agency-assisted housing and business opportunities developed in or adjacent to communities formerly covered by restrictive covenants.” This preference should extend to the families and descendants of those allegedly displaced by “agency-assisted development,” according to the report.

The committee’s final recommendations include a host of other housing-related proposals – such as repealing policies limiting those with criminal records from renting property, funding housing-focused anti-racism education programs, and establishing diversity, equity, and inclusion (DEI) certification programs for affordable housing contractors, providers, and decision makers.

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California is no stranger to controversial housing measures, especially those in which the state seeks to wrest control from local authorities. Indeed, California has imposed quotas on local governments to provide land for housing, particularly for lower-income families, and to streamline permits for these projects. Most of the state’s 482 cities are complying – but not all, particularly in the suburbs.

Many of the communities seeking to thwart the housing mandate are overwhelmingly Democratic areas around San Francisco, but the one catching the most flak from Newsom’s office is the city of Huntington Beach, a Republican area in Orange County that’s openly resisting the quota.

“The city has a duty to protect the quality and lifestyle of the neighborhoods that current owners have already bought into and for the future sustainability of Huntington Beach,” City Councilman Pat Burns wrote in a letter to colleagues earlier this year. “Radical redevelopment in already-established residential neighborhoods is not only a threat to quality and lifestyle, but to the value of the adjacent and neighboring properties.”

Huntington Beach Mayor Tony Strickland, a Republican, echoed that sentiment at a meeting last month. 

“People don’t want an urban community here,” he said. “I believe if we just went along, it will have a severe negative impact on our community’s quality of life.”

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Days later, Newsom, Attorney General Rob Bonta, and the Department of Housing and Community Development jointly announced a motion amending a lawsuit from March with the goal of holding Huntington Beach accountable for violating the state Housing Element Law. The law requires local governments to adopt housing plans that include sufficient opportunities for development.

California is seeking penalties and injunctive relief, as well as suspension of the city’s authority to issue building permits and a court order mandating the approval of certain residential projects until the city comes into compliance with the law.

“Huntington Beach continues to fail its residents,” Newsom, a Democrat, said in a statement at the time. “Every city and county needs to do their part to bring down the high housing and rent costs that are impacting families across this state. California will continue taking every step necessary to ensure everyone is building their fair share of housing and not flouting state housing laws at the expense of the community.”

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“California is in the midst of a housing crisis, and time and time again, Huntington Beach has demonstrated they are part of the problem by defiantly refusing every opportunity to provide essential housing for its own residents,” added Bonta. “The city’s refusal last week to adopt a housing element in accordance with state law is just the latest in a string of willfully illegal actions by the city – decisions that worsen our housing crisis and harm taxpayers and Huntington Beach residents… We’ll use every legal tool available to hold the city accountable and enforce state housing laws.”

However, several cities across California don’t have certified, compliant housing elements, according to the state’s housing tracker, leading Strickland to accuse the Newsom administration of singling out his city.

“The fact that the attorney general is singling out Huntington Beach only strengthens the city’s arguments in court that the state is not following the law with these housing mandates,” the mayor said in a statement last month. “These regular state press releases announcing legal actions against Huntington Beach may grab headlines, but they do not intimidate or deter the city, and they have no effect in the court of law, where these conflicts of law will ultimately be decided.”

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Earlier this month, Newsom sued the city of Elk Grove for not approving housing projects for the homeless.