California Attorney General Rob Bonta, Governor Gavin Newsom, and California Department of Housing and Community Development (HCD) Director Gustavo Velasquez have announced a settlement with the City of Norwalk over the city’s ban on certain types of housing for vulnerable residents. The agreement resolves a lawsuit filed by the state in November 2024, which challenged Norwalk’s prohibition on emergency shelters, supportive housing, single-room occupancy housing, and transitional housing.
The Los Angeles County Superior Court had previously denied Norwalk’s attempt to dismiss the case in February 2025. Under the terms of the settlement, which is subject to court approval, Norwalk will repeal its ban at an upcoming City Council meeting. The city is also required to establish a local housing trust fund aimed at developing affordable housing for extremely low-, very low-, and low-income households and deposit $250,000 into this fund. Procedures for applying for these funds must be submitted to HCD.
Attorney General Rob Bonta said: “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. 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.”
Governor Gavin Newsom added: “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.”
HCD Director Gustavo Velasquez stated: “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. 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.”
The settlement outlines additional requirements: after repealing the moratorium at an official meeting following receipt of judgment notice, Norwalk must implement overdue elements from its state-mandated plan addressing how it accommodates various income levels through zoning policies and incentives. The city’s plan must also recognize that previous bans disproportionately affected populations with special needs.
For as long as Norwalk remains under its Sixth Housing Element Cycle (2021-2029), it must submit quarterly reports detailing proposed affordable or supportive housing projects—including reasons for any application denials—and make factual findings when disapproving such developments consistent with fair-housing obligations.
Within 15 business days after receiving notice of judgment entry, Norwalk must post online for 180 days—and notify relevant stakeholders—a statement confirming repeal of ordinances restricting emergency shelters and related facilities; all applications are now accepted without previous restrictions.
In August 2024—without legislative findings or deliberation—the five-member City Council unanimously enacted an urgency ordinance imposing a temporary ban on new supportive housing projects; they later extended this measure despite being warned by HCD via formal Notice of Violation about possible legal action if not rescinded. As noted by state officials at https://www.hcd.ca.gov/, decertification means cities lose authority over some affordable projects and access key funding streams intended for addressing homelessness.
Attorney General Bonta had issued prior guidance reminding local governments about requirements under California Government Code Section 65858 concerning urgency zoning ordinances; written legislative findings are needed when immediate threats justify such actions.
A copy of the full settlement agreement can be accessed here.
