Appeals Court Leaves The Door Open For The Builder’s Remedy In The Coastal Zone

California remains in a continuing housing crisis of historic proportions. In the past ten years, the State Legislature has adopted numerous housing reform laws including SB 35, SB 330 (the Housing Crisis Act), AB 1893 (codifying the “Builder’s Remedy” under the Housing Accountability Act) and SB 79, among many others, in an effort to increase housing supply and affordability.¹ Yet, the crisis remains severe enough that the State has placed the $11.25 billion “Veterans and Affordable Housing Bond Act” on the November ballot in an effort to stoke more housing production and improve housing affordability.²

Nowhere in the State is this crisis more evident than in its exclusive coastal zone. According to a recent report by the Legislative Analyst’s Office³, “[w]hile many factors have a role in driving California’s high housing costs, the most important is the significant shortage of housing, particularly within urban coastal communities.” The Coastal Commission itself has been under increased pressure from both the Legislature (SB 963, compelling the Commission to comply with “shot clocks” for coastal development permit applications) and the California Supreme Court (Shear Development Co., LLC v. California Coastal Com. (2026) 19 Cal. 5^th 334, refusing judicial deference to the Commission’s interpretation of coastal rules). Perhaps recognizing its reputation, the Commission’s recently-adopted “2026-2030 Strategic Plan”⁴ calls for coordination with local agencies to facilitate denser housing in the coastal zone and to establish a goal to “Ensure Coastal Access for All” by increasing the supply of affordable housing opportunities for the coastal workforce.

Meanwhile, in the courts, the clash between the State’s recent housing reform efforts and coastal protection set its first match in New Commune DTLA v. City of Redondo Beach, with an opinionfiled July 30, 2026 by the Second District Court of Appeals, Division Four. The case involved the City’s denial of a 30-unit mixed use condominium project including six affordable units, filed under the Builder’s Remedy and proposed on land designated in the certified local coastal program “only for public access, coastal recreational facilities and services supporting boating and fishing.

Rather than adopt the developer’s proposal to “harmonize” the Builder’s Remedy and the Coastal Act (language likely borrowed from AB 2797’s mandate to “harmonize” the State Density Bonus Law with the Coastal Act), the Second Appellate Court looked to the express language of the Housing Accountability Act, Government Code section 65589.5, holding that the City made the required findings that (1) denial was required under the Coastal Act as a matter of State law and (2) no feasible method existed for the proposed housing to be compliant.

While the ultimate outcome was to uphold the City’s denial, the opinion confirms that local agencies must meet their statutory burden to make these findings, supported by a preponderance of the evidence, to deny a Builder’s Remedy project in the coastal zone. With respect to the first finding, the Court in New Commune specifically relied on the fact that the property was not designated to allow residential use. The opinion distinguishes this circumstance from previous cases in which courts upheld “local [coastal development permit] approvals that authorized projects in technical nonconformity with specific development standards because those nonconformities were overall compliant with [local coastal program] policies and the land uses at issue were permitted.” (Pp. *16-17 [“As these approvals applied to land already zoned for residential use, no Commission-certified land use designation change was required”].) Moreover, since the developer did not propose to amend the designation to allow residential use, the Court found that the City had no basis to determine the feasibility of compliance with the Coastal Act, which it therefore found legally infeasible.

While the opinion only goes so far in light of these facts and the developer’s approach of seeking “harmonization” rather than a legal pathway to compliance with the local coastal program, it confirms that coastal jurisdictions cannot simply ignore State housing laws by hiding behind the cloak of the Coastal Act. Where residential use is already permitted—even if a housing project is in “technical nonconformity” with development standards—or there is a feasible method to achieve compliance with the Coastal Act, coastal jurisdictions will be hard-pressed to meet their legal burden to deny housing under the Housing Accountability Act.

This should be welcome news for California’s housing crisis, because coastal jurisdictions should be required to contribute to solving our State’s housing shortage, just like non-coastal jurisdictions. As Governor Newsom recently put it, “California can’t solve the housing crisis while some cities sit on their hands and dare us to do something about it. . . . Housing law applies statewide, and no city gets a pass.”⁵

Footnotes

1 See the Terner Center for Housing Innovation’s summary of the most recent State legislation at “California Housing Supply and Land Use Legislative Round-up 2025”, Nov. 13, 2025. Available at: https://ternercenter.berkeley.edu/research-and-policy/california-housing-supply-and-land-use-legislative-round-up-2025/

2 California Lawmakers Propose $11.25 Billion Bond to Confront Housing Crisis - Davis Vanguard

3 “California’s Housing and Homelessness Challenges in Context”, Feb. 27, 2023. Available at: https://lao.ca.gov/handouts/socservices/2023/Housing-and-Homelessness-Challenges-020623.pdf

4 https://documents.coastal.ca.gov/assets/strategicplan/2026-2030-Strategic-Plan.pdf

5 “No more excuses: Newsom administration takes legal action against five California local governments for defying state housing law.” July 16, 2026. Available at: https://www.gov.ca.gov/2026/07/16/no-more-excuses-newsom-administration-takes-legal-action-against-five-california-local-governments-for-defying-state-housing-law/