Norwalk is to overturn new homeless shelter ban in settlement with the state of California

The city of Norwalk is set to overturn its citywide ban on new homeless shelters as part of a settlement to end a state lawsuit, and it will create a housing trust fund for new affordable housing, the state's attorney general announced on Friday.

Norwalk city leaders are to repeal the moratorium on shelter and supportive housing at the next regularly scheduled city council meeting.

On August 6, 2024, the Norwalk City Council unanimously passed an urgency zoning ordinance imposing a 45-day ban, or moratorium, on new supportive housing. One month later, the state warned that the moratorium violated several laws, including the Housing Crisis Act.

Despite the warnings, the city council voted to extend the moratorium for 10 months and 15 days, leaving the ban on shelters in place. This led to Norwalk's disqualification from receiving state housing and homelessness funds.

Then, in November 2024, the state of California sued Norwalk, alleging that the city had violated fair housing laws by adopting an ordinance that imposed a moratorium on developing emergency shelters, supportive housing, and transitional housing.

"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," Attorney General Rob Bonta said in a statement.

Now, Norwalk faces settlement terms that address affordable housing, compliance, and oversight. 

The city of Norwalk is to create a housing trust fund for the development of affordable housing, deposit $250,000 into that trust fund, implement all overdue housing element programs, and take several steps to ensure that stakeholders know that the housing ban has been repealed and that applications for housing development projects will be processed in accordance with state law, Bonta said in a news release.

"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 (California Department of Housing and Community Development) will continue to provide critical oversight to ensure accountability to that pledge," said HCD Director Gustavo Velasquez.

The settlement still needs judicial approval before taking effect.