In trimming the project’s scope, council members cited familiar concerns that often plague high-density developments in established suburban areas. Chief among these were fears of overcrowding and the potential for a dramatic increase in traffic congestion on already burdened local streets. To balance the development, the approved plan includes 25 acres of dedicated open space and approximately 35,000 square feet of commercial and retail space. Of the 2,300 units authorized, 920 are earmarked specifically for low- and very-low-income residents, representing a significant commitment to affordable housing, albeit at a lower total volume than many had hoped.
The reduction in units has created a secondary concern: financial viability. City planning staff had previously warned that a minimum of 3,450 units was likely necessary to make the project "financially feasible" for a private developer to undertake. Without enough market-rate units to offset the costs of infrastructure and affordable housing components, there are fears that the project may struggle to attract a builder. Furthermore, staff cautioned that the lower unit count might leave the city in a deficit regarding its state-mandated targets, potentially forcing Costa Mesa to revise its "housing element" yet again to find those missing units elsewhere in the city.
Why the State Sued
The lawsuit against Costa Mesa was part of a coordinated effort by the Newsom administration to signal that the era of non-compliance is over. In addition to the Orange County city, the state filed petitions against Calexico, Half Moon Bay, Ridgecrest, and Turlock. While each city has its own unique local challenges, the state’s grievance is the same: a failure to adopt a legally compliant housing plan in a timely manner.
"California can’t solve the housing crisis while some cities sit on their hands and dare us to do something about it," Governor Newsom stated in a sharp rebuke issued in July. "They had every chance to follow the law and plan for their fair share of housing. They chose not to, so now they’ll answer for it in court. Housing law applies statewide, and no city gets a pass."
Of the five cities targeted in this latest round of litigation, Costa Mesa is the largest, with a population of approximately 110,000 residents. Its size and economic importance in Orange County make it a high-profile test case for the state’s enforcement powers.
Under California’s housing element law, the state’s Department of Housing and Community Development (HCD) assigns every municipality a specific quota of new homes that must be planned for over an eight-year cycle. This is known as the Regional Housing Needs Allocation (RHNA). For the current 2021–2029 cycle, Costa Mesa has been tasked with planning for 11,760 new units. The mandate is further broken down by income level, requiring the city to zone for 2,919 units for very-low-income households and 1,794 for low-income households.
The state’s legal petition notes that Costa Mesa’s housing element was officially due on October 15, 2021. In the years since that deadline passed, the city has submitted multiple drafts to state regulators, but none have been certified as meeting the state’s rigorous standards for feasibility and density. The lawsuit asks a court to compel the city to produce a compliant plan within 120 days and seeks various penalties.
