By Eric Engelbert
Yes, California Is Suing Costa Mesa. Here Is the Full Story.
On July 16, 2026, California Attorney General Rob Bonta filed a lawsuit against the City of Costa Mesa, alleging the city has failed to adopt a state-certified housing plan after missing a 2021 deadline. The filing landed alongside lawsuits against four other California cities: Calexico, Half Moon Bay, Ridgecrest, and Turlock.
If you heard about this and were surprised, you are not alone. Costa Mesa has been building housing, working with state planners, and moving through the certification process. The city is not Huntington Beach, which spent years in open defiance of housing law. So what happened, and is Costa Mesa actually at risk of paying fines? This post breaks it all down.
What Is a Housing Element and Why Does It Matter?
California law requires every city and county to update its housing element every eight years. A housing element is the section of a city's general plan that shows how the city intends to accommodate its share of regional housing demand. It identifies sites for future housing, sets zoning to allow those homes to be built, and outlines programs to support housing production including affordable units.
The state assigns each city a number of units it must plan for through a process called the Regional Housing Needs Assessment, or RHNA. The current planning period is the Sixth Cycle, which runs from 2021 to 2029. Cities were required to submit a compliant housing element by October 15, 2021.
It is important to understand that a housing element is a planning document, not a construction mandate. The city does not have to actually build those homes. It does have to show a credible, legally compliant plan for how those homes could be built by removing zoning barriers and identifying adequate sites. The state reviews each submission and either certifies it as compliant or sends it back with required changes.
What the Lawsuit Claims
The AG’s filing is a writ petition, which is a request for a court to order the city to comply. It does not claim the city is acting in bad faith or that it has refused to engage. It simply states the legal facts: the deadline was October 2021, and as of the filing date, Costa Mesa has not received a final certification from the California Department of Housing and Community Development, known as HCD.
The filing also notes that Costa Mesa has not completed all required rezoning actions, which are a necessary component of a compliant housing element. Without the rezoning, HCD cannot issue final approval even if the written element is otherwise sound.
Governor Gavin Newsom framed the five lawsuits in aggressive terms: “These five jurisdictions 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.” The rhetoric is harder than the underlying facts in Costa Mesa’s case, as the state’s own complaint acknowledges the city is actively in the certification process.
How Costa Mesa Got Here
Costa Mesa is not a city that sat on its hands. Council members who spoke after the lawsuit was filed pointed to two specific factors that slowed the housing element process.
The first was Measure Y, a voter-approved slow-growth ordinance from 2016 that required any change to the city’s general plan to go to a citywide vote. Since a housing element update requires general plan amendments, the city had to navigate this constraint before it could rezone the sites needed for certification. Repealing or working around Measure Y consumed significant council time and political capital from roughly 2022 through 2024.
The second was the city’s decision to draft an inclusionary housing ordinance, a local law requiring a percentage of new residential developments to include affordable units. Crafting that policy, which required its own public process and legal review, pulled planning staff and council attention away from the housing element submissions.
Councilman Manuel Chavez said in an interview following the lawsuit: “I do think those two things made us not be as entirely focused on the housing element as we could’ve been.” The state also raised concerns about Costa Mesa’s sober living home ordinance during the review process, though Costa Mesa successfully defended that law in court through multiple rounds of litigation.
Where Things Actually Stand Right Now
Here is what makes Costa Mesa’s situation different from the cities that have drawn the state’s harshest response: the city is close, and the state knows it.
In February 2026, HCD determined that Costa Mesa’s housing element meets statutory requirements. That is a meaningful threshold. The remaining work at that point was completing the required rezoning actions, not rewriting the element from scratch. The city then held a public comment period on a draft housing element amendment in June 2026, just weeks before the lawsuit was filed.
Costa Mesa Mayor John Stephens said the city is currently waiting for state comments on its most recent submission. Stephens called the lawsuit “entirely unwarranted,” noting that “the State’s complaint admits that we are currently working with HCD toward certification of our housing element.”
The city is also actively developing housing through other channels, including the former Fairview Developmental Center, a large state-owned site with significant housing potential, and two Project Homekey sites funded by a combination of state and city dollars.
Will Costa Mesa Pay Fines?
This is the question most residents and property owners will want answered. The short version: it is possible but not likely to be significant, and the city has a clear path to avoid them entirely.
Under Senate Bill 1037, which took effect in 2025, courts can impose monthly fines on cities that fail to adopt a compliant housing element. The fines are not a flat rate. They scale based on a city’s size and the length of non-compliance, and the money is deposited into the Building Homes and Jobs Trust Fund to support affordable housing in the affected city.
The clearest example of what fines look like in practice is Huntington Beach. That city spent years openly refusing to comply with state housing law, lost every court challenge including a rejection by the state Supreme Court, and was ordered in May 2026 to pay $160,000 in initial penalties plus $50,000 per month until compliance is achieved. If Huntington Beach’s recently filed housing plan fails HCD review, those fines could escalate toward $1 million per month under SB 1037’s escalating penalty structure.
Costa Mesa’s situation is materially different. The state has already found the housing element itself meets statutory requirements. The remaining gap is rezoning, not a fundamental dispute over planning policy. If Costa Mesa completes its rezoning and receives HCD certification before this lawsuit goes to trial, fines are unlikely to materialize in any significant amount. Writ petitions like this one are often resolved through settlement or compliance before a court even gets to the question of penalties.
The lawsuit is best understood as a legal pressure mechanism. The state is signaling that it will hold cities accountable even when they are cooperating, to prevent the process from stretching indefinitely. For Costa Mesa, the path forward is clear: finish the rezoning, get the certification, and the lawsuit becomes moot.
What This Means for Costa Mesa Buyers and Homeowners
In the near term, this lawsuit does not change the Costa Mesa real estate market in any practical way. The city will continue approving housing projects, permits will continue to be issued, and existing homeowners are not affected.
There is one policy consequence that is worth understanding. While a city lacks a state-certified housing element, it is technically subject to California’s builder’s remedy law. Builder’s remedy limits a city’s ability to deny housing projects that include a minimum percentage of affordable units, even if those projects conflict with local zoning. Costa Mesa has already experienced builder’s remedy applications during the period it has been without full certification.
Once HCD certifies Costa Mesa’s housing element, the city regains full local discretion over project approvals. That is another reason the city is motivated to finish quickly.
For buyers considering Costa Mesa, the fundamentals remain strong. It is one of the most livable cities in Orange County, with good schools, proximity to the coast, and a walkable commercial district in areas like 17th Street and The Lab. Housing supply is tight across all of OC, and Costa Mesa is no exception.
Thinking About Buying or Selling in Costa Mesa?
Costa Mesa is one of the most in-demand markets in Orange County for good reason. Whether you are looking for a single-family home, a townhome, or a condo, inventory moves quickly and knowing the local market matters. Our team tracks what is happening in Costa Mesa and across OC and can help you make the right move at the right time.
Search Costa Mesa homes for sale
