The City of Norwalk has agreed to a settlement with the State of California after the city was found to have violated state law by banning new homeless shelters and supportive housing. The agreement, announced by Governor Gavin Newsom and Attorney General Rob Bonta, requires Norwalk to repeal its ban, create an affordable housing trust fund with an initial deposit of $250,000, and submit to ongoing monitoring by the state.
Governor Newsom criticized the city’s actions in a statement: “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.”
As part of the settlement—pending court approval—Norwalk must also implement overdue housing element programs and inform stakeholders that applications for supportive and affordable housing projects will now be processed according to state law. The city will provide regular reports to California’s Department of Housing and Community Development (HCD) so that compliance can be monitored.
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.”
HCD Director Gustavo Velasquez added: “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 state filed suit against Norwalk on November 4, 2024 after determining that bans on emergency shelters and various forms of transitional or supportive housing violated multiple laws. In October 2024, California decertified Norwalk’s required “housing element,” making it ineligible for key funding streams related both to general affordable housing development as well as specific homelessness initiatives; this also allowed certain “builder’s remedy” projects—which bypass local restrictions—to proceed.
Norwalk passed its ordinance shortly after Governor Newsom issued an executive order urging cities across California use available state funds for addressing unsafe encampments by providing care and shelter options for unhoused individuals within their communities. Since 2019, nearly $29 million has been awarded by HCD directly toward Norwalk’s own efforts addressing these issues.
The case was referred through HCD’s Housing Accountability Unit—a group created in 2021 under Governor Newsom tasked with ensuring cities comply with planning obligations around fair-share housing development statewide. Since then, this unit has helped facilitate over 10,000 new homes—including more than 3,300 affordable units—by working directly with local governments or pursuing enforcement actions when necessary.
California has taken additional steps aimed at reducing homelessness statewide through increased funding for new shelters and permanent homes as well as changes in mental health policy via Proposition 1 reforms and creation of specialized courts such as CARE Court systems designed for vulnerable populations.
A newly formed task force is set up by Governor Newsom focusing specifically on clearing large encampments located along major rights-of-way within California’s ten largest cities—including Los Angeles; San Francisco; Oakland; San Diego; Sacramento; San Jose; Long Beach; Anaheim; Bakersfield; Fresno—and expanding access not only shelter but also mental health services across these urban areas.
Between 2014-2019—the period before Newsom took office—the number of unsheltered homeless individuals rose sharply throughout California by about 37,000 people. However since then growth rates have slowed compared nationally: In 2024 while U.S.-wide homelessness grew more than 18%, California limited its increase overall at just three percent—a lower rate than seen in forty other states—with unsheltered homelessness growing less than half a percent during that time frame.
California also recorded reductions in veteran homelessness along with progress addressing youth homelessness compared with other large states like Florida or New York which saw higher increases both proportionally and numerically.
