Newport Beach’s use of housing overlays to meet planning goals challenged in court

The Newport Beach Stewardship Assn. argued in its May lawsuit that the city needs to abide by a precedent set when an appellate court invalidated Redondo Beach’s housing plan a year ago over its use of housing overlays where the underlying zoning allowed non-residential development.

In January, California’s Supreme Court declined to hear Redondo Beach’s appeal.

“We want the city to adopt a housing plan that complies with the law as interpreted by the court of appeals in the Redondo Beach case,” said Walter Stahr, a City Council candidate, in support of the suit. “Newport Beach isn’t alone in this. The Redondo Beach case tells every city in California go back to the drawing board.”

As a sober living home’s battle to stay in Costa Mesa logs its ninth year, new thoughts on housing and compliance may be changing the legal landscape.

The NBSA filed its lawsuit a month after the group claimed Newport Beach city officials denied its formal request in April to follow the ruling, which disallowed the use of such housing overlays to meet state-required Regional Housing Needs Assessment (RHNA) obligations.

Orange County Superior Court Judge Melissa McCormick will hear the case on Thursday for the first time.

Ahead of the court date, Newport Beach defends its housing plan as one “reviewed and certified” by the California Department of Housing and Community Development more than three years before the appellate court’s decision.

“The City developed its Housing Element through an extensive public process and in consultation with HCD, and HCD determined that the plan complied with California housing law,” said Georgia Rios, a city spokesperson. “Since that certification, the City has relied on the approved Housing Element as the framework for implementing its housing obligations mandated by state law and for reviewing new housing proposals.”

Rios added that Newport Beach’s planning process was “materially different” than Redondo Beach’s process and applying the ruling to an already certified housing plan “would create significant uncertainty” for cities like it that relied on the process in good faith.

“I do not see Newport Beach and Redondo Beach as different situations,” Stahr argued. “In the Redondo Beach case, the court invalidated an HCD-approved housing element. Newport Beach’s approval is no guarantee against either HCD itself or, as in the current case, a private plaintiff suing and saying the plan isn’t good enough anymore.”

Newport Beach’s current housing plan allows for the construction of up to 8,174 new units in meeting its RHNA cycle for almost half as many units. The city leaned on overlays near John Wayne Airport and Fashion Island to help reach its planning goals.

Stahr cited a townhome project seeking approval to build 30 three-story units next to the Environmental Nature Center as an example that the suit is more than just about technicalities, but also housing policies he argues aren’t sound.

“There is an argument that the city didn’t make the hard rezoning choices,” he said. “Overlays were a way of pushing the issue down the road.”

The NBSA points to neighboring Costa Mesa as an example of a city that also relied on overlays but is proactively amending its housing plan after the appellate court ruling.

“In stark contrast to Costa Mesa, [Newport Beach] continues to advance projects that rely on unlawful zoning overlays, and the City says it will continue to do so,” the complaint argues.

Developers hoping to put housing on Newport Beach Country Club land found initial support from planning commissioners, who recommended City Council approve a development agreement for it next month.

McCormick ruled against the NBSA last year when it alleged Newport Beach ignored the city’s “Greenlight Initiative” in approving its housing plan in 2024 without a vote of the electorate. She upheld the legality of the city’s housing plan, a decision the NBSA is currently appealing.

In returning to McCormick’s courtroom, the resident group is hoping for a ruling in its favor this time.

“If the City takes the position that no local vote was required under the City Charter,” the suit argues, “the City is then using the same zoning overlays that were found to be unlawful in Redondo Beach.”

The suit asks McCormick to halt construction on all applicable projects unless amended to comply with the law.

Newport Beach voters will also have an opportunity to weigh in on the city’s housing plan next month with Measure H. If passed, the housing plan would be amended to allow for 2,900 units while counting projects already in the pipeline to meet the cycle threshold.

The NBSA is part of a coalition that helped qualify the measure for the ballot.

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Gabriel San Román is a feature writer for TimesOC. He previously worked at OC Weekly until the newspaper’s closing in late 2019. In 2023, San Román was part of the breaking news reporting team that was a Pulitzer finalist for its coverage of the Lunar New Year mass shooting in Monterey Park.