Supplemental-Cover_Correspondence---Ballot-Initiative — Grover Beach City Council, June 8, 2026

Supplemental Item –
Correspondence for Item 4. Report on Citizen Initiative to Limit Certain Building Heights in Certain Zones and
Establish a Minimum Commercial Component in Mixed-Use
Development Projects and Consideration of Related
Ordinance
Placement: Business Item 4
Meeting Date: June 8, 2026
June 5, 2026

First, I recognize that the Council is in a difficult position. The Initiative reflects real community concerns about growth, building design, neighborhood character, and the future of our community. Those concerns deserve to be heard and addressed through a thoughtful public process. At the same time, the Council must also evaluate the Initiative in light of the City’s obligations under state housing law and the practical consequences that could follow if the Initiative is adopted without a clear path to preserving the City’s housing capacity.

Second, I want to affirm that CCB supports the City’s efforts to balance housing production, economic development, and the preservation of community character. In our experience, mixed-use and infill projects can help bring residents closer to local shops and services, create more vibrant commercial corridors, and make better use of sites where the City has already identified potential growth opportunities.

However, I am concerned that adopting the Initiative now will create consequences that would make it harder for the City to achieve the very balance that some residents are now seeking. The City’s Staff Report clearly explains that the Initiative “would substantially limit the City’s ability to accommodate future housing needs and increases the reliance on additional upzoning and land use changes elsewhere in the community,” which creates a serious risk that the City could run afoul of state housing law, including the Housing Crisis Act, the Housing Element Law, and the No Net Loss Requirement.

In addition, I am particularly concerned about the risk to the City’s Housing Element. Based on my review of the Staff Report, if the Initiative reduces residential capacity on sites that the City relies on for its Housing Element—which it in fact appears to do—the City would need to identify and upzone sufficient replacement sites to ensure that there is no net loss of residential unit capacity in order to remain in compliance with state law. The Initiative also appears to directly contradict many of the policies and programs in the City’s Housing Element. If the City cannot undertake the required upzoning and revision to its Housing Element, HCD could issue a finding of noncompliance, which could ultimately result in decertification of the City’s Housing Element.

Decertification of the City’s Housing Element would be an unfortunate outcome and have a serious effect on the community, particularly since it would reduce the City’s ability to maintain local control over housing approvals and could expose the City to Builder’s Remedy projects that bypass the City’s zoning standards. Recent Builder’s Remedy projects in Santa Barbara1 and Carpinteria 2 show the types of developments that get proposed when developers are able to bypass local zoning standards. The City should not risk being faced with such highly controversial projects by adopting the Initiative at its June meeting.

I respectfully ask the Council to not adopt the Initiative at the June 8, 2026 City Council meeting. At a minimum, the City and the public should have the benefit of a full and transparent process before any measure with these potential consequences becomes law. Submitting the Initiative to the voters would allow the community to consider the tradeoffs, benefits, and potential risk to the City’s Housing Element before making a final decision on something that may have such a substantial impact on the City’s future.

Thank you for your consideration of my letter. CCB remains committed to working constructively with the City, residents, and other stakeholders on solutions to address community concern while furthering the City’s ability to meet its housing obligations. For the reasons above, I respectfully request that the Council not adopt the Initiative as an ordinance and instead allow the voters to decide at the November 2026 election whether this is the right course of action for the City. 1 Santa Barbara Independent, Plans for Eight-Story Apartment Building Behind Santa Barbara Mission Still Incomplete (Dec. 26, 2024), https://www.independent.com/2024/12/26/plans-for-eight-story-apartment-building-behind-santa-barbaramission-still-incomplete/. 2 Santa Barbara Independent, Carpinteria Threatened by an 18-Story Housing Project (Nov. 8, 2025), https://www.independent.com/2025/11/08/carpinteria-threaten-by-an-18-story-housing-project/.

Sincerely,
Cam Boyd
/s/ Cam Boyd

MATTHEW GELFAND

SUPERVISING COUNSEL
[email protected]
TEL: (213) 739-8206
June 8, 2026

VIA EMAIL
City Council
City of Grover Beach
154 S. Eighth Street
Grover Beach, CA 93433
Email: [email protected]; [email protected] RE: Agenda Item 4: Downzoning Initiative
To the City Council:

Californians for Homeownership is a 501(c)(3) organization devoted to using impact litigation to address California’s housing crisis. We are writing regarding the item you are scheduled to consider as Agenda Item 4 at your upcoming meeting, a downzoning policy being proposed through the citizen initiative mechanism.

Usually, when our organization comments on a proposed local policy, we are forced to develop our own written analysis to demonstrate that the proposal is unlawful. Not so here. The City’s own staff have prepared a highly detailed report explaining why the City cannot lawfully adopt this proposal, and we direct your attention to that report.

If the City Council adopts this proposal, or if the voters adopt it through the initiative process, litigation is sure to result.

Sincerely,
Matthew Gelfand
cc: Matthew Bronson, City Manager (by email to [email protected]) Megan Martin, Community Development Dir. (by email to [email protected]) Kyle Bell, Senior Planner (by email to [email protected]) Jennifer P. Thompson, Esq., City Attorney (by email to [email protected]) From: Christina Ockey
To: CouncilMembers
Subject: Citizens initiative to limit building heights
Date: Sunday, June 7, 2026 4:03:18 PM
I am pleased to see the growth and development taking place along Grand Avenue. Increased commercial development can strengthen the local economy and generate additional revenue for the city. These projects also enhance property values and provide a more attractive use of the sites than many of the previous developments.

As for height limits, this is not a significant concern for me personally. However, I believe any changes to established height restrictions are best decided through voter approval.

Christina Ockey

OPEN LETTER TO THE RESIDENTS OF GROVER BEACH
Don't Trade Local Control for a False Promise
By Generation Build
Generation Build supports thoughtful growth, housing affordability, and strong local communities throughout the Central Coast. We also believe residents deserve the truth about the unintended consequences of the proposed Grover Beach development initiative.

The initiative's supporters argue they are trying to preserve community character by limiting building heights and requiring at least 33 percent commercial space in mixed-use projects. We understand those concerns.

But there is a serious risk that this measure could produce exactly the opposite result.

The uncomfortable reality is that California has fundamentally changed the rules of the game.

State housing laws enacted by the Legislature and signed by Governor Gavin Newsom were specifically designed to prevent cities from downzoning property, restricting housing capacity, and blocking new housing opportunities.

Grover Beach is currently approaching completion of its state housing obligations for the current Housing Element cycle and is preparing for a new cycle that could require substantially more housing units than are currently planned.

If Grover Beach adopts policies that reduce its ability to accommodate state mandated housing requirements, the City risks creating legal vulnerabilities that could ultimately reduce local control over future development decisions.

Residents should ask themselves a simple question:

What happens if this initiative succeeds, but the state determines Grover Beach can no longer realistically accommodate its housing obligations? The answer should concern everyone.

Under California's Builder's Remedy laws, cities that fall out of compliance with state housing requirements can lose significant control over housing approvals. Projects that include required affordable housing components may be able to bypass local zoning standards that residents have spent decades debating and refining.

The irony is impossible to ignore.

The very people trying to stop taller buildings may be creating the conditions that lead to projects with less local oversight.

The very people trying to preserve local control may be handing more authority to Sacramento.

The very people trying to slow growth may end up accelerating it through state mandates.

The real choice is whether Grover Beach plans for housing on its own terms or has housing imposed upon it by state law.

There is still time to find common ground.

There is still time to preserve local control.

There is still time to avoid a self-inflicted wound.

Generation Build strongly encourages collaboration over confrontation and compromise over litigation.

Because if Grover Beach loses control of its housing future, it will not be Sacramento, developers, or state regulators who bear the consequences.

It will be the residents of Grover Beach.

Generation Build
Advocating for Housing, Opportunity, and Future Generations on California's Central Coast June 8, 2026

VIA EMAIL
[email protected]
City Council
City of Grover Beach
Grover Beach City Hall, 154 S. Eighth Street
Grover Beach, California 93433
RE: Agenda Item 4: Report on Citizen Initiative to Limit Certain Building Heights and Establish a Minimum Commercial Component in Mixed-Use Development
Mayor Kassi Dee and City Councilmembers,
My name is Jocelyn Brennan and I am the Executive Director of the Home Builders Association of the Central Coast, a non-profit California 501(c)(6) trade association representing home builders and related industry professionals in San Luis Obispo and Santa Barbara Counties. We are writing regarding the citizen-sponsored initiative that would (1) reduce allowable building heights in commercial and industrial zones and (2) impose a minimum 33 percent commercial requirement in mixed-use developments (the “Initiative”). As discussed below, the Initiative presents substantial legal risk under California housing law, particularly Government Code sections 66300 and 65863, would materially reduce the City’s residential development capacity, and would frustrate the City’s housing objectives under its 2020-2028 Housing Element. We respectfully urge the City to avoid adopting such provisions that contravene state law and to ensure that any action taken is fully consistent with state housing law.
1 I. Background
The City’s Development Code currently allows heights up to 55 feet in certain commercial zones and up to 40 feet in industrial zones and prescribes no minimum required percentage of commercial use for mixed-use projects.
2 The Initiative would cap building heights at three stories, 40 feet across all commercial zoning districts and 33 feet in all industrial districts, change the method of height 1 While this letter generally focuses on the Housing Crisis Act, we also have concerns about the Initiative’s project-specific impacts that may run afoul of the Housing Accountability Act and the Density Bonus Law. 2 City Development Code, §§ 2.30.040, 2.40.040; City of Grover Beach, Grover Beach Housing Element 2020-2028, TR 3-7, n. 1.
measurement to include appurtenances, and require that at least 33 percent of a mixed‑use building consist of commercial uses with ground‑floor commercial on primary street frontages.

These changes would downzone and reduce in residential development capacity and would significantly constrain future mixed‑use projects in the City.3 The result would be fewer homes and delayed delivery of mixed-use projects in precisely the areas where the City has previously encouraged such projects.

II. The Housing Crisis Act (“HCA” and often referred to as “SB 330”) and the Prohibition on Reducing Housing Capacity
As background, the HCA was enacted to address California’s housing shortage by limiting local governments’ ability to reduce housing development capacity and by providing vesting protections for housing development projects to increase certainty in the approval process. 4 The HCA applies to
“affected” jurisdictions, which are cities or counties that are located in an urbanized area or urban cluster, as designated by the U.S. Census Bureau, and to qualifying “housing development projects,” which are projects that generally propose: (1) residential units only; (2) mixed-use development in which at least two-thirds of the square footage is residential; or (3) transitional, supportive, emergency, or farmworker housing.5 As an affected City, Grover Beach is subject to the HCA.6 The HCA prohibits a city or county from taking specific actions that would reduce the intensity of residential development or the number of residential units that can be constructed within the jurisdiction below the levels permitted as of January 1, 2018.7 These prohibited actions include, among other things, downzoning, reducing allowable density, imposing more restrictive design standards that effectively reduce development capacity, failing to offset reduced residential capacity, or limiting the number of units that can be approved on a parcel.8In other words, the HCA generally prohibits a city or county from changing a general plan and specific plan land use designations, zoning ordinances, or development standards in a manner that reduces residential development capacity. 9 When a city or county adopts changes that reduce the intensity of residential development or the number of residential units that can be constructed, it must concurrently provide an offsetting increase 3 It also would shrink the size of commercial and industrial buildings in these areas reducing the viability of such projects and their corresponding benefits for local employment and tax basis. 4 See generally Gov. Code, §§ 65941.1, 66300.
5 Gov. Code, § 66300(a)(1), 66300(a)(6); see also §§ 65589.5(h)(2), 65905.5(b)(3). 6 See, e.g., HCD, Affected Cities – 2023 Update, available at https://www.hcd.ca.gov/sites/default/files/docs/planning-andcommunity/affected-cities.pdf. 7 Gov. Code, § 66300(b)(1)(A)-(D).
8 Gov. Code, § 66300(b)(1)(A)-(D), (h)(1).
9 HCD, City of Twentynine Palms, Ofland Project General Plan Amendment and Rezoning – Letter of Technical Assistance (Feb. 20, 2026), available at https://www.hcd.ca.gov/sites/default/files/docs/planning-and-community/HAU/twentynine-palmshau-2342-ta-022026.pdf (stating that that the HCA prohibits an affected city from changing a parcel’s general plan land use designation or zoning to a less intensive use unless it concurrently changes standards, policies, and conditions on other parcels to ensure no net loss in residential capacity). elsewhere within the jurisdiction to ensure that there is no net housing loss.10 With respect to an initiative measure, the HCA states that “concurrently means the action is included in the initiative in a manner that ensures the added residential capacity is effective at the same time as the reduction in residential capacity.”11 The Department of Housing and Community Development (“HCD”) has further explained that while there is a high degree of variability between the ways that different local agencies may attempt to offset reduced capacity, the local agency “must demonstrate how a particular balancing action offsets a loss in residential development capacity elsewhere” to ensure that there is no net loss in residential capacity.
12 Indeed, as the City’s Attorney’s summary of the Initiative correctly notes, the Initiative’s limit on building heights could require the City “to accommodate housing units in alternate locations.”13
Ultimately, absent a concurrent and compensatory offset, adopting the Initiative’s across-the-board height reductions and minimum commercial square footage requirement for mixed-use developments could violate the HCA.

III. The Initiative’s Downzoning and Reduced Capacity Impacts Creates Substantial Risk Under the Housing Crisis Act
As currently drafted, the Initiative would materially constrain the development envelope in commercial and industrial zones by capping heights at three stories, 40 feet and 33 feet, respectively, and by counting appurtenances in total height. The Initiative’s height limitations and mandatory commercial use percentage, both independently and in combination, operate as a reduction in residential development capacity which is expressly prohibited by the HCA. The Initiative would therefore expose the City to significant legal risk unless it can demonstrate a legally sufficient and concurrent offset in housing capacity, which it presently has omitted.

As previously noted, the HCA broadly prohibits affected jurisdictions from taking actions that reduce the intensity of residential uses or the number of units that can be constructed relative to the baseline in place as of January 1, 2018, including through downzoning, reduced development envelopes, or standards that constrain feasible unit yield. Here, the Initiative does precisely that:
• Height Reductions. By lowering the allowable heights to three stories, 40 feet in commercial zones and 33 feet in industrial zones (as well as expanding how height is measured to include appurtenances), the Initiative materially reduces the vertical development envelope that 10 Gov. Code, § 66300(h)(1).
11 Gov. Code, § 66300(h)(1)(2)(C).
12 HCD, City of Pasadena – Housing Crisis Act, Letter of Technical Assistance (Apr. 22, 2022), available at https://www.hcd.ca.gov/community-development/housing-element/docs/lanPasadena-TA-042222.pdf; see also HCD, City of Twentynine Palms, Ofland Project General Plan Amendment and Rezoning – Letter of Technical Assistance (Feb. 20, 2026), available at https://www.hcd.ca.gov/sites/default/files/docs/planning-and-community/HAU/twentynine-palms-hau-2342- ta-022026.pdf.
13 City of Grover Beach, Staff Report: Report on Citizen Initiative on Building Heights and Commercial Space Component at p. 2, available at https://www.grover.org/DocumentCenter/View/17165/Item4_Development-Initiative-Staff-Report. supports residential unit production, particularly for mixed-use projects where feasibility often depends on building residential units above commercial uses. • Mandatory Percentage of Commercial Use. The Initiative’s requirement that at least 33 percent of a mixed-use building be devoted to commercial or retail uses, coupled with the requirement to include the ground floor commercial along primary frontages, directly reduces the developable capacity for housing. For example, the City’s Development Code does not currently prescribe a minimum percentage for the commercial component of mixed-use developments.

As a result, a mixed-use development could theoretically contain 90 percent residential and a 10 percent commercial component. If the Initiative goes into effect, that very same project would see a 23 percent reduction in its residential component. This new commercial requirement will result in a decrease in the number of mixed-use projects in the City, which in turn will have a direct impact on the number of residential units that are being added to the City’s housing supply during a statewide housing crisis. • Combined Effect on Project Feasibility. Critically, the Initiative’s provisions must be considered in totality. When the reduced height is paired with a fixed percentage of commercial use, the result is not merely a theoretical reduction in unit capacity, but a practical suppression of feasible residential density. For example, on many sites in the City, the Initiative will either substantially reduce the achievable residential unit count or render mixed-use developments economically infeasible altogether. This is highlighted in City staff’s report on the initiative, where it explored potential developments on vacant lots in the City under current development standards and under those imposed by the Initiative. Those hypotheticals established that the Initiative would reduce development capacity by 44% and, applied across the City, could reduce residential development capacity by 544 units. o Importantly, the staff report analysis likely underestimates the extent of the impact by not analyzing how mixed-use project appurtenances (such as commercial ventilation, cooling or heating systems) required to be installed on the rooftop may further shrink projects, reducing project feasibility and residential density. These are clear violations of the HCA’s prohibition on downzoning, given there is no concurrent upzoning proposed by the City at this juncture.

HCD has repeatedly explained that development standards that have the effect of reducing allowable residential density or intensity, such as height limits or commercial use constraints, may run afoul of the HCA.14 Therefore, development standards or other changes that functionally reduce allowable 14 See, e.g., HCD, City of Twentynine Palms, Ofland Project General Plan Amendment and Rezoning – Letter of Technical Assistance (Feb. 20, 2026), available at https://www.hcd.ca.gov/sites/default/files/docs/planning-andcommunity/HAU/twentynine-palms-hau-2342-ta-022026.pdf. residential density or intensity can violate the HCA unless the jurisdiction adopts a concurrent15 and compensatory offset that fully preserves the City’s residential housing capacity. 16 IV. The Initiative Violates the No Net Loss Requirement and Housing Element Law, Creating Significant Risk of Housing Element Decertification
The Initiative also poses a serious risk to the City’s Housing Element. As the City’s June 8, 2026 Staff Report correctly explains, the Initiative’s constraints may reduce the City’s residential capacity and violate Housing Element Law, particularly since it could discourage housing production “on sites the housing element has identified in their inventory as sites for potential capacity.”17 As Housing Element Program 1.5 recognizes, Government Code section 65863 requires the City to maintain sufficient site capacity to accommodate RHNA by income level throughout the planning period. If approved actions reduce residential density or unit yield below what the Housing Element relies upon, the City must identify and make available additional adequate sites.

The Initiative poses a direct violation of this No Net Loss requirement because the City’s Housing Element identifies multiple opportunity sites in commercial zones that are suitable for mixed-use projects and available for extremely low, very low, and low income households, 18 and, as shown in City
staff’s analysis, the Initiative would render much of that development potential infeasible. For example, Program 1.6 of the Housing Element committed the City to amend the General Plan and Development Code to provide adequate sites for 29 very low- and low-income units at 20 dwelling units per acre or greater, and at least one of the sites identified by the City—191 S. Oak Blvd. (APN 060-309-002)—would be directly affected by the new minimum percentage for the commercial component in mixed-use developments.19 The same can be said of the “Opportunity Sites” identified in the Housing Element, four of which are zoned commercial and are ripe for mixed-use development. As a result, by imposing a mandatory 33 percent commercial requirement, the Initiative would undermine the assumptions underlying the City’s adopted sites inventory and likely require the City to revisit its inventory list, identify alternative adequate sites, and redo its site analysis to remain complaint with state housing law.

Moreover, the Initiative would violate numerous provisions of the City’s Housing Element, as explained here:
15 HCD, Fontana Housing Crisis Act Unit Bank – Letter of Technical Assistance (Apr. 18, 2025), available at https://www.hcd.ca.gov/sites/default/files/docs/planning-and-community/HAU/20250402-hau-1451-fontana-ta041825.pdf (“The term ‘concurrent’ means that the city is responsible for identifying and reallocating the shortfall of capacity at the time in which the downzoning action occurs.”) (emphasis in original). 16 Gov. Code § 66300(b)(1)(A), (h)(1); see also HCD, City of Pasadena – Housing Crisis Act, Letter of Technical Assistance (Apr. 22, 2022), available at https://www.hcd.ca.gov/community-development/housing-element/docs/lanPasadena-TA042222.pdf. 17 Staff Report: Report on Citizen Initiative on Building Heights and Commercial Space Component at p. 4. 18 See City of Grover Beach, Grover Beach Housing Element 2020-2028, TR 2-5-13, Tables TR 36, TR-37-44. 19 See id. at HE 3-5, Program 1.6, TR 2-10, Table TR-41.

Housing Element Policy/Program Consistency Analysis
Policy 1.1.
“The City shall ensure there is an adequate supply
of vacant or underutilized land for development or
redevelopment at specific densities to meet the
housing objectives for affordable housing.”
The Initiative development restrictions reduce
development potential and density in the City.

Staff found the Initiative’s combined changes
would reduce feasible residential capacity,
including a 44% unit reduction in the prototype CB
scenarios and an estimated City-wide loss of
about 544 units in the CB and CBO zones. This is
directly inconsistent with the Policy’s direction to
ensure there is an adequate supply of land to
meet the City’s housing objectives.

Policy 1.2.
“The City shall encourage development of a mix of
different housing types including multi-family and
single-family homes, mixed-use developments,
accessory dwelling units, caretaker units,
manufactured homes, transitional housing,
emergency shelters, and farmworker and
employee housing, in appropriate locations.”
The Initiative would impose a mandatory 33%
commercial floor-area requirement, require
ground-floor commercial frontage, and lower
building heights in the affected commercial and
industrial zones. Those new limits make mixeduse housing less flexible and less feasible, especially on the small parcels typical of the City’s
commercial corridors, which undermines the
Policy of encouraging a range of housing types in
appropriate locations.

Policy 3.1.
“The City shall support new affordable housing
development by working with developers to
identify appropriate locations for their projects and
facilitate the use of applicable Federal and State
funding . . . City Affordable Housing Fund money,
and density bonuses to help offset the cost of
affordable housing development.”
The Initiative violates this Policy by reducing
density, and forcing the City to identify
replacement capacity elsewhere rather than
facilitating affordable housing production. It also
risks Housing Element nonconformance and loss
of Community Development Block Grants (CDBG)
and potentially Permanent Local Housing
Allocation (PLHA) funding eligibility, which would
directly impair the funding tools Policy 3.1 says
the City should use to support affordable housing.

Policy 6.1.
“The City shall review site development standards,
development review procedures, and
development fees and shall modify them if
necessary, to ensure they do not unreasonably
constrain the development, conservation, and
rehabilitation of housing.”
City staff concluded that the Initiative’s lower
heights and one-third commercial requirement
would operate as constraints by reducing
residential capacity and likely creating conflict
with the Housing Crisis Act and Housing Element
Law unless replacement capacity is found
elsewhere. This flies in the face of the Policy’s goal
of removing constraints on development.

Program 1.5.
“If a proposed reduction of residential density will
result in the residential sites inventory failing to
accommodate the RHNA by income level, the City
will identify and make available additional
adequate sites to accommodate its share of
housing need by income level within 180 days of
approving the reduced density project.”
Program 1.5 is the Housing Element’s no-net-loss
safeguard, and it requires replacement sites
whenever approved actions reduce density below
what the Housing Element inventory needs to
satisfy RHNA. The Initiative will create exactly
that kind of net loss by reducing residential
development capacity through lower height limits
and a mandatory commercial floor-area
requirement. Yet, there is no concurrently
proposed upzoning to offset any loss in
development potential.

Program 1.6.
“To address the 2020-2028 RHNA, the City shall
amend the General Plan and the Development
Code … to provide adequate site(s) for 29 very lowand low-income units and allow 20 dwelling units per acre or greater on certain sites or in certain
zones. There will be no minimum density on these
sites.”
The City Attorney’s summary states that the
Housing Element relied on existing allowable
height limits to demonstrate RHNA capacity, and
limiting those heights may require the City to
accommodate units in alternate locations. Staff
likewise concluded the measure would reduce
feasible residential development and force
additional rezoning elsewhere, which is the
opposite of Program 1.6’s completed rezoning
plan.

Program 1.8.
“As part of the City’s Senate Bill (SB) 2 grant
workplan the City plans to amend the Land Use
Element and Development Code to allow more
residential development without discretionary
review (i.e., by right) … .” “This will also include the elimination of subjective development
standards/policies which shall be replaced with
objective design standards … .”
Program 1.8 is expressly intended to remove
barriers by allowing more housing without
discretionary review, replacing subjective
standards with objective ones, and considering
additional inclusionary or density-bonus tools.

Although the initiative also operates through
objective rules, its rules are restrictive rather than
facilitative because they reduce heights, require
33% commercial floor area, and reduce feasible
residential yield. That makes the initiative
inconsistent with Program 1.8’s core purpose of
removing barriers and allowing more by-right
housing, not fewer feasible housing units.

Program 5.1.
“The City shall continue seeking federal and state
funds for loans and grants … to assist with the
construction of affordable residential projects for
lower-income households (extremely low, very
low, and low income).”
Program 5.1 directs the City to keep pursuing
grant and loan funding for affordable residential
construction. The City’s 2025 annual report
shows those funding efforts are active, including
applications for HOME, PLHA, and other financing
for a 53-unit affordable multifamily development.

The Initiative is inconsistent with Program 5.1
because staff warns that Housing Element
decertification could make the City ineligible for
CDBG and potentially PLHA funds, directly
jeopardizing the funding pipeline the program
depends on.

As described above, the Initiative completely undermines the City’s Housing Element—requiring revisions to the Housing Element’s programs and policies, and a reevaluation of its site inventory.

Ultimately, if the City is unable overhaul its Housing Element in short order to address the issues identified above, HCD could issue a formal determination of nonconformance, refer the matter to the State Attorney General for enforcement, and formally decertify the City’s Housing Element. Importantly, decertification would expose the City to severe consequences, including “Builder’s Remedy” projects that bypass local zoning controls and the loss of eligibility for critical state housing funding programs, such as Community Development Block Grants and Permanent Local Housing Allocation funds. In short, the Initiative may jeopardize the City’s ability to meet its Regional Housing Needs Allocation and maintain local control over future development.

The City Council should not risk its Housing Element compliance or ability to deliver affordable housing opportunities to its citizens based on an Initiative petition that only needs to acquire signatures from a fraction of its voters. In conclusion, we respectfully request that the City Council not adopt an ordinance that implements the Initiative and instead submit it to voters for the November 2026 election.

Sincerely,
Jocelyn Brennan
Executive Director
Homebuilders Association of the Central Coast
[email protected]

Grover Beach City CouncilJune 8, 2026

Grover Beach City Council
June 8, 2026