The news: The State of California is suing Costa Mesa for not having a compliant housing plan. Attorney General Rob Bonta filed the case in Orange County Superior Court on July 16, 2026, against Costa Mesa and four other cities. Costa Mesa’s plan, called a housing element, was due in October 2021, and the state says the city still hasn’t finished the rezoning it promised. The council adopted a revised plan on September 1, but as of mid-October the state hadn’t certified it. Until it does, Costa Mesa is exposed to fines and the “builder’s remedy.” Your ADU rights don’t change. What can get built near your property might.
Published October 26, 2026. Dylan Serna, The ADU Realtor.
What the State Is Asking For
Every California city has to plan for its share of new housing. Costa Mesa’s share for 2021 to 2029 is 11,760 homes. The Attorney General’s announcement says the five cities were referred by the state housing department (HCD) after failing to comply. According to HousingWire, the petition asks the court to order a compliant plan within 120 days and seeks penalties.
The city disputes the suit. Mayor John Stephens called it unwarranted and said the city is working with HCD toward approval, Voice of OC reported. A council member pointed to Measure Y, which sends certain zoning changes to a citywide vote, as one reason the work has been slow.
How Costa Mesa Got Here
| Date | What happened |
|---|---|
| Oct. 15, 2021 | Housing element due |
| Aug. 22, 2025 | HCD finds the city in violation for not finishing required rezoning |
| March 2026 | Property owners pull sites from the plan, including Segerstrom-owned parcels, so the city has to find replacements |
| July 16, 2026 | State sues Costa Mesa and four other cities |
| Sept. 1, 2026 | Council adopts a revised plan 7–0, with 95 new opportunity sites holding about 6,996 units |
| Sept. 15, 2026 | Council approves 2,300 homes at the Fairview Developmental Center site |
| Now | Waiting on state certification and a final vote to overrule the county airport commission on parts of the rezoning |
In its August 2025 violation notice, HCD said the plan itself met state requirements. The problem was that the rezoning to back it up wasn’t done. The city proposed finishing by September 2026, and HCD said that timeline didn’t comply.
What’s at Stake for the City
- The builder’s remedy. Without a compliant plan, the city generally can’t deny a qualifying project with enough low- or moderate-income units just because it doesn’t match local zoning.
- Fines. HCD’s notice lists court fines of $10,000 to $100,000 a month for ignoring a court order, which can be multiplied for continued noncompliance, and a court-appointed receiver as a last step.
- Lost grants. The city can lose eligibility for state housing and transportation funding.
If this sounds familiar, it’s the same fight Huntington Beach has been losing for years. I covered what that meant for HB buyers in Huntington Beach keeps losing its housing law fight. Costa Mesa is in a much better spot. It adopted a revised plan and is negotiating with the state instead of fighting it.
What This Means If You’re Buying in Costa Mesa
Your ADU plans don’t change
ADUs run on state law, and the housing element fight doesn’t touch it. You can still build a detached ADU, a garage conversion and a junior ADU on most single-family lots, and two detached ADUs starting January 1 under AB 956. The city-specific rules are in my Costa Mesa ADU guide, and lot sizes are in what lot size you need for a Costa Mesa ADU.
Most new density is on commercial land, not your street
The city’s rezoning uses a mixed-use overlay on commercial and industrial “opportunity sites,” and the city says it was designed to avoid upzoning existing residential neighborhoods. If you’re buying near a commercial corridor, check the city’s housing element sites map to see whether a nearby parcel is on the list.
Paper units aren’t new rentals
Zoning for 11,760 homes doesn’t mean 11,760 homes get built. Most opportunity sites are working shopping centers and offices, and owners have to choose to redevelop. Costa Mesa rentals will stay tight for years. When I filmed my Costa Mesa investing video, there were only about 20 rentals listed in the whole city. That’s why a detached 2-bed ADU here rents for about $3,100 to $4,200 a month (see Costa Mesa ADU investing in 2026).
Small-lot development keeps going
Investors are already doing SB 9 splits and four-unit builds on the Eastside and Westside. See what developers are building in Costa Mesa and a real Eastside SB 9 split. A state that’s pushing the city to approve more housing is good for that strategy. For current prices, see my October Costa Mesa ADU market report.
What to Watch Next
- HCD certification of the September 1 plan. Certification would likely end the builder’s remedy exposure and could settle the suit.
- The airport overrule vote. The county airport commission found parts of the rezoning inconsistent with John Wayne Airport’s land use plan. Overruling it takes a two-thirds council vote.
- The court. Whether the city and the state settle on a timeline or the judge sets one.
I’ll update this post as those land. For how other Orange County cities stack up, see OC cities behind on state housing goals and the companion story on the Fairview 2,300-home plan.
Frequently Asked Questions
Why is California suing Costa Mesa?
For not having a compliant housing element. The plan was due October 15, 2021, and the state says the city hasn’t finished the rezoning needed to support it.
Does the lawsuit affect ADUs in Costa Mesa?
No. ADU rules come from state law and apply whether or not the city’s housing plan is certified.
How many homes does Costa Mesa have to plan for?
11,760 between 2021 and 2029.
Is the builder’s remedy in effect in Costa Mesa?
HCD’s position is that it applies to any city without a substantially compliant housing element. Costa Mesa’s revised plan was still awaiting certification as of mid-October 2026.
Buying in Costa Mesa?
I’ll check any lot you’re looking at against the city’s opportunity sites, run the ADU and SB 9 options, and show you the payment math. Browse ADU homes for sale or see more on my Costa Mesa page.
👉 Book a buyer ADU consult call to go through your options with Dylan
Prefer to talk now? Call Dylan Serna, ADU Realtor at 714-860-2868.
Dylan Serna | The ADU Realtor | eXp Realty | DRE #02217359
This post is general information, not legal advice. Dylan Serna is a licensed real estate agent, not an attorney. Details come from public reporting and state documents as of October 26, 2026.
