The city of Norwalk has agreed to repeal its ban on homeless shelters and will pay $250,000 toward new affordable housing developments to settle a state lawsuit, officials said Friday.
The city had prohibited shelters along with laundromats, payday lenders and other businesses that predominantly serve low-income residents.
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The settlement, if approved by the court, also requires Norwalk to create an affordable housing trust fund and undergo ongoing state monitoring.
"The Norwalk city council's failure to reverse this ban without a lawsuit, despite knowing it is unlawful, is inexcusable," California Gov. Gavin Newsom said in a statement. "No community should turn its back on its residents in need -- especially while there are people in your community sleeping on the streets. No city is exempt from doing their part to solve the homelessness crisis."
Newsom and state Attorney General Rob Bonta filed suit in November 2024, alleging that the city's ban on emergency shelters, supportive housing, single-room occupancy housing, and transitional housing violated numerous state laws and sought an order compelling the city to repeal the ban.
In October 2024, in response to the city's failure to repeal the ban, the state announced that it was decertifying Norwalk's housing element, making the city ineligible for significant housing and homelessness funding and ensuring the city can no longer deny permits to "builder's remedy" construction of low income housing projects.
The settlement ensures the southeastern Los Angeles County community reaches compliance with the law and helps residents in need, Bonta said.
A message seeking comment left with Norwalk officials was not immediately returned.
The attorney general said that before filing the lawsuit, Norwalk was warned 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," Bonta said Friday.
"We are more than willing to work with any city or county that wants to do its part to solve our housing crisis. By that same token, if any city or county wants to test our resolve, today's settlement is your answer. All of us have a legal and moral responsibility to help -- not hurt -- those struggling to keep a roof over their heads or lacking housing altogether."
As part of the agreement, Norwalk will submit reports to the California Department of Housing & Community Development on the status of supportive and affordable housing projects so that the state can more readily monitor the city's actions, officials said.
"This case should send a clear message: When a city's leaders disregard the law to block housing -- especially housing for those most in need -- this administration will take swift legal action," said HCD Director Gustavo Velasquez.
"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 will continue to provide critical oversight to ensure accountability to that pledge."
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