California Settles Lawsuit with Norwalk, Requiring City to Overturn Homeless Shelter Ban

Strategic Insights -

The California state government has settled a lawsuit with the city of Norwalk, requiring the city to overturn its ban on new homeless shelters and supportive housing. As part of the settlement, the city will pay $250,000 into a newly created trust fund for affordable housing development and undergo state monitoring. This move comes as part of Governor Gavin Newsom's efforts to address the state's homelessness crisis.

Key Takeaways:

  • The city of Norwalk agreed to a settlement with the California state government, requiring it to overturn its ban on new homeless shelters and supportive housing.
  • The settlement includes a $250,000 payment into a trust fund for affordable housing development and ongoing state monitoring.
  • Governor Gavin Newsom's administration has been working to address the state's homelessness crisis, including launching the Housing Accountability Unit to assist cities and counties in fulfilling their legal responsibilities to plan for and permit their fair share of housing.
  • Since 2019, HCD has awarded Norwalk nearly $29 million in housing and homelessness funds.
  • The state's Housing Accountability Unit has supported the development of 10,089 housing units, including more than 3,328 affordable units, through enforcement actions and working with local jurisdictions to ensure compliance with housing law.
  • The settlement is part of Governor Newsom's comprehensive framework to address homelessness, including streamlining and prioritizing the building of new housing, funding new shelters, and holding local governments accountable.

Statistics:

  • Since 2019, HCD has awarded Norwalk nearly $29 million in housing and homelessness funds.
  • The state's Housing Accountability Unit has supported the development of 10,089 housing units, including more than 3,328 affordable units, through enforcement actions and working with local jurisdictions to ensure compliance with housing law.
  • California limited its overall homelessness increase to just 3%, compared to a national increase of over 18% in 2024.
  • The state held the growth of unsheltered homelessness to just 0.45%, compared to a national increase of nearly 7% in 2024.

Sources:

  • California Governor Gavin Newsom
  • California Attorney General Rob Bonta
  • California Department of Housing and Community Development (HCD)
  • A statewide task force to address encampments on state right-of-ways in California's ten largest cities

Relevant sources:

  • A statewide executive order (2024)
  • A housing Accountability Unit report (2024)
  • A press release from the California Governor's Office (September 5, 2025)
  • Proposition 1 (2022)