Dan J. Harkey

Master Educator | Business & Finance Consultant | Mentor

AB-712: Strengthening Enforcement of California’s Housing Reform Laws

by Dan J. Harkey

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Summary:

California’s housing crisis has prompted a wave of legislative reforms aimed at accelerating housing development and curbing local obstruction.  Assembly Bill 712 (AB-712), authored by Assemblymember Buffy Wicks, introduces robust enforcement mechanisms to ensure compliance with housing reform laws by local agencies.  The bill was enrolled and presented to the Governor on 11 September 2025.

Legislative Context

Existing Law under the Planning and Zoning Law provides various incentives and streamlining measures for housing development, including prohibitions on local governments denying or reducing the density of compliant projects.  However, enforcement has historically been weak, allowing some jurisdictions to delay or obstruct housing projects despite statutory mandates.

AB-712 addresses this gap by creating financial and procedural consequences for noncompliant agencies.

Key Provisions of AB-712

·         Attorney’s Fees and Costs

o   If an applicant for a housing development project prevails in a lawsuit enforcing compliance with a housing reform Law, the court must award reasonable attorney’s fees and costs to the applicant.

·         Mandatory Fines

o   Courts are required to impose fines on local agencies found in violation.

o   Initial fines start at $50,000 per violation for smaller projects, with higher penalties for repeated violations or larger developments.

·         Extended Statute of Limitations

o   Applicants must provide 60 days’ written notice to the local agency before filing suit.

o   This notice extends any applicable statute of limitations by 60 days, ensuring applicants have time to prepare their case.

·         Prohibition on Indemnification

o   Public agencies cannot require applicants to indemnify, defend, or hold harmless the agency in lawsuits alleging violations of housing reform laws.  Such provisions are deemed void and against public policy.

·         Definition of Housing Reform Law

o   Broadly defined as any Law that protects housing development applicants or limits public agency discretion to facilitate housing production.

Enforcement Process

  • Before litigation, the Attorney General or the Department of Housing and Community Development (HCD) must notify the agency of noncompliance.  This notification serves as a formal warning and an opportunity for the agency to rectify the situation before legal action is taken.
  • Applicants are required to provide a 60-day notice detailing the legal and factual basis of the alleged violation.  This notice period allows the agency to review the claim and potentially resolve the issue before a lawsuit is filed.

Policy Rationale

AB-712 aims to:

  • Deter obstructionist practices by local governments.
  • Empower developers with clear remedies against unlawful delays.
  • Ensure uniform compliance with state housing mandates.

Supporters include the California Building Industry Association and California Chamber of Commerce, while opponents include New Livable California and several local agencies concerned about loss of autonomy.

Implications for Local Agencies

  • Noncompliance now carries both financial and reputational risks.
  • Agencies must review their internal policies to avoid violations and exposure to litigation.
  • Increased collaboration with HCD and developers will be essential to mitigate enforcement actions.

AB-712: Housing Reform Laws – Enforcement Actions, Fines, and Penalties with Practical Scenarios

More on Key Enforcement Provisions Recap

  • Mandatory Fines: $50,000 per violation, escalating for repeated offenses.
  • Attorney’s Fees: Courts must award reasonable fees to prevailing applicants.
  • Extended Statute of Limitations: 60-day notice extends filing deadlines.
  • Indemnification Ban: Agencies cannot shift legal liability to applicants.
  • Broad Definition of Housing Reform Law: Covers any statute limiting local discretion to block housing.

Real-World Enforcement Scenarios

Scenario 1: Denial of a Density Bonus Project

A developer submits a 100-unit mixed-income project compliant with the Density Bonus Law.  The city council denies the project, citing “neighborhood character,” a non-permissible reason under state Law.

  • Action: The developer issues a 60-day notice and then files suit.
  • Outcome: Court orders approval, awards $150,000 in attorney fees, and imposes $50,000 fine on the city.
  • Impact: Sends a strong signal to other jurisdictions that subjective criteria cannot override state mandates.

Scenario 2: Imposing Illegal Fees

A city adds a $25,000 per unit “Impact fee” after approving a housing element, violating AB-712’s prohibition on new constraints post-certification.

  • Action: Developer challenges the fee under AB-712.
  • Outcome: The fee was invalidated, the city was fined $100,000, and it was required to refund the collected fees.
  • Impact: Discourages municipalities from using financial barriers to hinder housing development.

Scenario 3: Failure to Process SB-35 Streamlined Application

A jurisdiction ignores an SB-35 application for a 200-unit affordable housing project, delaying review beyond statutory timelines.

  • Action: Developer sues after notice period.
  • Outcome: Court compels approval, awards $200,000 in attorney’s fees, and levies $250,000 in fines for repeated violations.
  • Impact: Reinforces that procedural delays are actionable under AB-712.

Policy Implications

These scenarios illustrate AB-712’s teeth:

  • Financial Consequences: Noncompliance is costly for local agencies.
  • Legal Certainty for Developers: PredictableRemedies Encourage Investment.
  • Behavioral Shift: Cities must align local ordinances with state housing Law or risk litigation and penalties.

✅ AB-712 Compliance Checklist for Local Agencies

1.  Project Review and Approval

  • Ensure timely processing of housing development applications, including SB-35 streamlined projects.
  • Avoid denials based on subjective criteria (e.g., “neighborhood character”) when projects meet state Law requirements.
  • Confirm compliance with the Density Bonus Law and other housing mandates before issuing decisions.

2.  Fees and Exactions

  • Do not impose new or increased fees after housing element certification unless explicitly allowed by Law.
  • Review all Impact fees and exactions for legal compliance with housing reform statutes.

3.  Legal Risk Management

  • Remove any indemnification clauses requiring applicants to defend or hold harmless the agency in housing Law disputes.
  • Establish internal protocols for responding to 60-day legal notices in a timely and accurate manner.

4.  Enforcement Avoidance

  • Train staff on AB-712 enforcement provisions, including fines and attorney’s fee exposure.
  • Maintain documentation of all housing-related decisions to demonstrate compliance with relevant regulations.

5.  Collaboration and Transparency

  • Coordinate with HCD and the Attorney General’s Office when notified of potential violations.
  • Engage developers early to resolve disputes before litigation.

6.  Monitoring and Reporting

  • Conduct quarterly audits of housing approvals and denials for compliance.
  • Update local ordinances to align with state housing reform laws.

Conclusion

·        AB-712 represents a significant escalation in California’s housing enforcement strategy.  By coupling financial penalties with legal protections for developers, the bill seeks to transform housing reform laws from aspirational mandates into enforceable obligations—critical for addressing the state’s housing shortage.

·        AB-712, with its transformative power, aims to dismantle local barriers and accelerate housing production statewide, making a significant Impact on California’s housing landscape.