By Niran Somasundaram
On July 30, 2026, the Second District Court of Appeal published its decision in New Commune DTLA LLC v. City of Redondo Beach, the first published appellate decision to squarely address how the builder’s remedy provisions of the Housing Accountability Act (HAA), Gov. Code § 65589.5, interact with the requirements of the Coastal Act and a Coastal Commission–certified Local Coastal Program (LCP). While many housing law cases over the last few years have underscored the supremacy of state housing laws over contradictory local laws, the New Commune case asked a court to address a more complex situation. As the opening of the opinion notes, the case involves a clash of “two statutory schemes that promote state policies over the interests of local governments.” The Court of Appeal’s holding signaled that while the Builder’s Remedy may triumph over local land use regulations, it cannot be used to evade land use regulations enacted under a state law scheme. [New Commune DTLA LLC v. City of Redondo Beach, ___Cal.App.5th___, Case No. B337897 (2nd Dist. July 30, 2026).]
Background
New Commune DTLA, LLC applied to the City of Redondo Beach for permits to build a 30-unit condominium project, including six affordable units, on a parcel within the City’s coastal zone. The City lacked an HCD-certified housing element at the time the application was submitted, which the parties agreed triggered the HAA’s builder’s remedy provisions. However, the City’s LCP, certified by the Coastal Commission, designated the parcel only for public access uses, coastal-recreational facilities, and boating- and fishing-related services; residential uses were not permitted. After HCD later certified the City’s housing element, the City notified the developer it would not process the application without an application for an LCP amendment because it proposed uses not permitted under the LCP. The developer petitioned for a writ of mandate to compel approval, citing the Builder’s Remedy limitations on the power of cities to deny housing projects that fail to comply with local land use regulations. The Los Angeles Superior Court denied the petition, and the Court of Appeal affirmed.
The Court of Appeal’s Decision
The Court of Appeal noted that HAA specifies circumstances under which a city may deny a Builder’s Remedy project. One of these circumstances, under Gov. Code § 65589.5, subd. (d)(3), is when (1) denial is required to comply with a specific state law, and (2) no feasible method exists to comply with that law short of denial. The court held the City satisfied both prongs.
On the first prong, the court explained that a certified LCP under the Coastal Act “embodies policies that are ‘not solely a matter of local law but embody state policy.'” (Opn. at p. 6). In particular, the court notes that the Coastal Act requires formal amendment of an LCP, including Coastal Commission review, for any action that authorizes a use of land that is not permitted or conditionally permitted in the LCP. Accordingly, the court determined that the City was required to deny the project under the Coastal Act absent an LCP amendment. The court distinguished the project’s non-conformity with LCP use provisions from a hypothetical project’s non-conformity with development standards under an LCP—leaving open the possibility that the Builder’s Remedy could operate to authorize projects that comply with use restrictions under an LCP, but fail to conform with more traditional development standards, such as heights or setbacks.
On the second prong, because the developer never sought an LCP amendment, the court reasoned that denial was the only legally feasible option. (Opn. at p. 8.) The court also invoked the HAA’s own savings clause, quoting it for the proposition that nothing in the statute “shall be construed to relieve” a local government of its obligations under the Coastal Act. (Gov. Code, § 65589.5, subd. (e); Opn. at p. 8.)
Conclusion and Implications
The result in New Commune is notable when set against the last decade’s housing-streamlining case law, in which California courts have generally read the HAA’s pro-housing provisions expansively against local discretion. New Commune signals that courts may be hesitant to extend that same expansive reading where doing so would reach into a competing statewide regulatory scheme administered by a separate agency. The opinion acknowledges the “friction in this conclusion,” especially given the HAA’s goal of providing affordable housing, but ultimately the court was not comfortable with an interpretation that would effectively strip the Coastal Commission of the power to review and approve LCP land use changes provided under state statute. (Opn. at p. 8.)
That said, New Commune is likely not the last word on this issue. The Court of Appeal was not asked to decide whether the HAA could override the Coastal Act on more sympathetic facts, for instance, a project proposed on a residentially designated parcel that deviates from technical development standards, which the court itself flagged as potentially distinguishable. For now, New Commune stands as the most significant rebuke that a court has provided to the Builder’s Remedy, demonstrating that while it may be a powerful tool in an applicant’s arsenal, it has its limits. The court’s opinion is available online at: https://www4.courts.ca.gov/opinions/documents/B337897.PDF
