San Benito County is facing a warning from California housing officials that could have consequences extending well beyond a single affordable housing development.
In a November 4 letter (linked at the bottom of the article for review), the California Department of Housing and Community Development (HCD) raised serious concerns about the County’s handling of Baler Place, a proposed 53-unit affordable housing development at 340 Bridgevale Road.
The state argues that the County reversed its previous approvals, imposed additional development requirements, and declined to approve a financing resolution that would have supported the project. Now, HCD is warning that the County’s actions could jeopardize its Housing Element compliance status, potentially opening the door to additional state oversight and restrictions on local housing decisions.
How did we get here?
Baler Place is a proposed 100% affordable housing development consisting of one, two, and three-bedroom apartments. Below is the timeline in question:
- The developer, CRP Affordable Housing and Community Development, submitted its application in late 2023.
- According to HCD, County Planning Director Abraham Prado signed multiple documents in 2024 confirming that the project was permitted under existing zoning and did not require discretionary review.
- In March 2024, the County determined that the proposal was consistent with its ordinances and development standards.
- A year later, in March 2025, the County confirmed that the project’s planning design review was complete, with additional requirements remaining before building permits could be issued.
However, the situation changed in 2026.
- On April 28, the Board of Supervisors declined to approve a financing resolution associated with tax-exempt revenue bonds for the project, despite a recommendation from County staff. The vote was 2-3 with Angela Curro and Mindy Sotelo in favor of passage, with Dom Zanger, Kollin Kosmicki, and Ignacio Velasquez opposed.
- HCD specifically noted that repayment of those bonds would be the responsibility of the applicant and the California Municipal Finance Authority, not San Benito County.
- Then, on June 22, the County informed the developer that the project would require a Major Development Plan Review, including a public hearing before the Planning Commission.
That decision directly contradicted the County’s previous written determinations, according to HCD. In its letter, the state said it was “extremely concerned” by the County’s actions, even labeling the aforementioned letter “antithical.”
Why is the state getting involved?
At the center of the dispute is whether San Benito County can require additional discretionary review after previously determining that a development was allowed by right.
A by-right, or ministerial, approval process generally means that a project can proceed if it meets applicable objective development standards, without requiring discretionary approval from elected or appointed officials.
HCD points to the County’s previous Housing Element, which explicitly stated that multifamily developments in the Residential Multifamily zoning district were permitted through a ministerial process. The state argues that the County’s subsequent requirement for Major Development Plan Review conflicts with that Housing Element and the approvals already issued.
HCD also cites state approval timelines, arguing that the County’s opportunity to approve or disapprove the project had already passed. Even if the County’s original determination that the project qualified for ministerial approval was incorrect, HCD maintains that applicable approval deadlines would still have passed because the County previously determined the project was exempt from environmental review.
The state is now calling on the County to withdraw the additional review requirement, affirm the project’s existing approvals, and promptly approve the financing resolution.
Why could the County lose its Housing Element approval?
California requires cities and counties to adopt Housing Elements demonstrating how they will accommodate their assigned share of regional housing needs.
San Benito County’s current Housing Element covers the 2023–2031 planning period and received a finding of substantial compliance from HCD on February 3, 2026.
However, receiving that determination does not mean the County can disregard its adopted housing policies. HCD has the authority to review local government actions that may be inconsistent with an adopted Housing Element. If the department determines that a jurisdiction is no longer substantially complying with state housing law, it can revoke its previous finding of compliance.
That is precisely the possibility raised in the November 4 letter. The County is responsible for planning for 754 housing units during the current housing cycle, including 444 units for low- and very low-income households. According to HCD, the County had met just 2.4% of its lower-income housing allocation as of its 2025 Annual Progress Report.
Baler Place is already identified in the County’s adopted Housing Element as a planned development. Its 53 affordable units would contribute toward meeting those housing obligations. The state also warns that the County’s additional review requirements could jeopardize funding already awarded to the project, including Low-Income Housing Tax Credits, HOME funds, and infrastructure grant funding.
What happens if the County loses compliance?
The potential consequences could extend beyond Baler Place and affect future housing development throughout unincorporated San Benito County. One significant concern involves California’s Housing Accountability Act and provisions commonly known as the Builder’s Remedy. When a jurisdiction does not have a substantially compliant Housing Element, certain qualifying housing developments may receive additional protections from denial, even when they conflict with local zoning or General Plan land-use designations.
This does not mean developers can build anything they want. Projects must still satisfy applicable state requirements and other relevant development standards. However, it can substantially limit the County’s discretion over qualifying housing proposals. Losing compliance could also affect eligibility for certain state housing and infrastructure funding programs, depending on each program’s requirements.
The County could face additional legal exposure as well. HCD has authority to refer potential violations of state housing law to the California Attorney General’s Office, which can pursue enforcement action. In some circumstances, continued violations of housing law and failure to comply with subsequent court orders can result in financial penalties. Importantly, none of these consequences has been imposed through the November 4 letter. HCD has not revoked the County’s Housing Element compliance determination or announced legal action. The letter is a warning about what could happen if the state’s concerns are not addressed.
What could this mean for future development?
The potential loss of Housing Element compliance raises broader questions about the County’s ability to manage housing growth in its unincorporated communities. San Benito County’s General Plan and zoning ordinances establish where different types of development are permitted, including residential densities and land-use designations.
Ordinarily, those policies provide the framework for reviewing development proposals. However, if the County loses its Housing Element compliance status, qualifying housing developments could potentially receive protections that limit the County’s ability to deny them based solely on conflicts with local land-use policies. This could become particularly relevant for future residential proposals on properties where existing zoning does not otherwise permit the requested density. It would not automatically authorize development across the County, eliminate infrastructure requirements, or guarantee approval of individual projects. Nevertheless, it could change how some housing applications are evaluated and reduce the County’s ability to rely on certain local land-use restrictions.
There are also potential financial implications. Some state funding programs supporting housing, infrastructure, and community development require jurisdictions to maintain compliant Housing Elements. Losing compliance could complicate the County’s ability to qualify for certain funding opportunities. For a county facing ongoing housing and infrastructure needs, those potential consequences could be significant.
What happens next?
HCD has outlined several actions it believes the County should take. The department is calling for the County to rescind its requirement that Baler Place undergo Major Development Plan Review, reaffirm its previous approvals, and approve the project’s financing resolution as soon as possible.
The state has also made clear that it will continue monitoring the County’s handling of the project. If HCD determines that the County is violating state housing laws, the matter could be referred to the California Attorney General’s Office. For now, the County retains its Housing Element compliance determination, and the November 4 letter does not establish that any enforcement penalties have been imposed.
However, the warning comes just nine months after the County received its finding of substantial compliance for the current housing cycle. With hundreds of housing units still needed to meet its regional housing obligations, the County now faces questions about whether its decisions align with the housing policies it adopted. What began as a dispute over a 53-unit affordable housing development could ultimately have much broader implications for how San Benito County plans for and approves future housing.
Stay tuned for more.
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