Governor Newsom announces Norwalk to overturn illegal homeless shelter ban as part of settlement

Lawsuit settlement also requires city to create affordable housing trust fund and undergo ongoing state monitoring

What you need to know: Norwalk today has agreed to a settlement with California after the city violated state law by banning new homeless shelters and supportive housing. As part of the settlement, the city will overturn the ban, pay $250,000 into a newly created trust fund for development of affordable housing, and undergo state monitoring.

SACRAMENTO - Governor Newsom and Attorney General Rob Bonta today announced a settlement with the City of Norwalk resolving the state's lawsuit over the city's unlawful ban on new housing for California's most vulnerable residents. The settlement, if approved by the court, requires Norwalk to, among other actions, repeal its unlawful ban, create a housing trust fund for the development of affordable housing within the city's limits, deposit $250,000 into that trust fund, implement all overdue housing element programs, and take several steps to ensure that stakeholders know that the housing ban has been repealed and that applications for supportive and affordable housing projects will be processed in accordance with state law.

"The Norwalk city council's failure to reverse this ban without a lawsuit, despite knowing it is unlawful, is inexcusable. 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."

Governor Gavin Newsom

Norwalk will also submit reports to HCD on the status of supportive and affordable housing projects so that the state can more readily monitor the city's actions. This settlement continues the Governor's work to address homelessness throughout California through a comprehensive framework that includes ensuring local accountability.

"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," said Attorney General Rob Bonta. "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."

"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," said HCD Director Gustavo Velasquez. "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."

Governor Newsom and Attorney General Bonta filed the lawsuit on November 4, 2024, alleging that the city's ban on emergency shelters, supportive housing, single-room occupancy housing, and transitional housing violated numerous state laws and sought an order compelling the City to repeal the ban. Today's settlement reaches that goal and beyond in helping ensure the community reaches compliance with the law and helps its residents in need.

On October 3, in response to the city's failure to repeal the ban, the state announced that it was decertifying the City of Norwalk's housing element. The state's action made the city ineligible for significant housing and homelessness funding and means the city can no longer deny permits to "builder's remedy" affordable housing projects.

Norwalk issued the ordinance only weeks after Governor Newsom issued an executive order that, among other things, urges local governments to use the unprecedented funding provided by the state to address unsanitary and dangerous encampments within their communities and provide people experiencing homelessness in the encampments with the care, housing, and supportive services they need. Since 2019, HCD has awarded Norwalk nearly $29 million in housing and homelessness funds.

The lawsuit was referred to the Attorney General by HCD's Housing Accountability Unit, which was launched by Governor Newsom in 2021 to assist cities and counties in fulfilling their legal responsibilities to plan for and permit their fair share of housing, and to hold accountable those that fail to do so.

Since its establishment, the Housing Accountability Unit has supported the development of 10,089 housing units, including more than 3,328 affordable units, through enforcement actions and by working with local jurisdictions to ensure compliance with housing law. In 2024, the Unit was expanded to include a focus on homelessness issues, including compliance with state laws related to homeless housing.

A strategy that works

In addition to today's announcement and work to hold local governments accountable to help their residents and improve affordability, Governor Newsom is creating a structural and foundational model that will have positive impacts for generations to come

The Governor is streamlining and prioritizing building of new housing, funding new shelters, housing, and supports, holding local governments accountable, addressing mental health and its impact on homelessness through voter-approved Proposition 1, and creating new pathways for those who need it most through updated conservatorship laws and a new CARE court system. This work is all creating positive results. The Governor also recently announced a new statewide task force to help address encampments on state right of ways in the state's ten largest cities, bringing together this comprehensive framework to get people into housing and off the streets.

Together with local partners, the Task Force will focus on encampment operations throughout the state within the next 30 days. The task force will work in a unified way across state government to clear highly visible and unsafe encampments on state property while expanding access to housing, shelter, mental health, and substance use services. Locations identified include areas with large encampments and high-priority encampments on state rights-of-way in California's ten most populous cities: Los Angeles, San Francisco, Oakland, San Diego, Sacramento, San Jose, Long Beach, Anaheim, Bakersfield, and Fresno.

Reversing a decades-in-the-making crisis

Between 2014 and 2019 - before Governor Newsom took office - unsheltered homelessness in California rose by approximately 37,000 people. Since then, under this Administration, California has significantly slowed that growth, even as many other states have seen worsening trends.

In 2024, while homelessness increased nationally by over 18%, California limited its overall increase to just 3% - a lower rate than in 40 other states. The state also held the growth of unsheltered homelessness to just 0.45%, compared to a national increase of nearly 7%. States like Florida, Texas, New York, and Illinois saw larger increases both in percentage and absolute numbers. California also achieved the nation's largest reduction in veteran homelessness and made meaningful progress in reducing youth homelessness.