Sacramento Report: Californians Get a Break from HOAs

The story of Adam Hardesty is not unprecedented. He decided to retrofit the garage of his three-story Carlsbad condo into a ground-floor apartment to rent out while he was unemployed for more than a year, as CalMatters reported earlier this year.

Despite receiving the legal blessing of Carlsbad city officials, local architects and engineers to build what’s called an “accessory dwelling unit,” he came up against another kind of wall: his homeowners association.

The Mystic Point Homeowners Association feared it would make parking more scarce and lead to a domino effect of neighbors turning their garages into long-term rentals. Amid threats of fines and costly litigation, Hardesty persisted.

This week, I reported on a new state law that gives homeowners a break from their HOAs, which are no longer allowed to issue fines greater than $100 per violation unless public health or safety is at risk. They also can’t keep tacking on late fees and extra penalties.

San Diego homeowners pay some of the most expensive HOA fees in the state, in the hundreds of dollars, on top of the eye-boggling housing costs. Lawmakers have said the HOA cap will help low- and middle-income homeowners who are bogged down by all the bills.

Lawmakers have pushed for decades for greater transparency on HOA boards and to stop their ability to reject housing. The new HOA law was tucked inside an unrelated housing construction bill, Assembly Bill 130, days before the governor signed it after Democratic Senator Aisha Wahab of Fremont introduced a nearly identical proposal in Senate Bill 681.

Why this legislation was inserted into an unrelated housing bill is not entirely clear. Lobbyists working with Wahab’s office on the issue said they were told SB 681 was designated as a priority bill after it was quietly inserted into AB 130.

“I think the law, the California Legislature, is noticing and they’re creating these boundaries,” said Hardesty, who is now in the middle of a lawsuit with his HOA and said he could not share anything further.

HOAs have been growing across the country for decades, especially in the western United States where 71 percent of all new single-family homes built in 2024 were within HOA communities, according to data from the U.S. Census Bureau. They are organizations that act as hyper-local government bodies, enforcing rules imposed by the community; everyone who is in an HOA must pay monthly dues to cover the costs of amenities. Homeowners elect and can recall board members.

They’ve been at the center of some residents’ ire for decades because of their ability to levy fines from the hundreds to thousands of dollars for various violations, such as painting a home a certain color. And, in Hardesty’s case, for in-house projects.

Now homeowners associations worry how it will affect their ability to enforce the rules.

“If we want to have a better quality of life in an HOA we put certain rules in the community,” said David Zepponi, chief executive of the Executive Council of Homeowners and a lobbyist for HOA boards. “The bill itself does limit the ability to make sure those rules are implemented fairly.”

Attorneys who represent homeowners said the cap was a necessary move to stop HOAs from misusing their authority.

“Anything that limits abuse and overstepping and overreach is, in my opinion, a win,” said Luke Carlson, an attorney with LS Carlson Law who represents homeowners in HOAs and is the author of the book “Bad HOA.” 

“There are less aggressive ways than leveraging fines against homeowners,” Carlson said.

Cases of HOAs retaliating against homeowners are rare but possible because of the broad powers board members have in California, said Ed Susolik, CEO and president of Callahan & Blaine, who represents both homeowners and HOAs. The law will help filter out those extreme instances and create more productive ways to resolve disputes that don’t involve litigation, Susolik said.

“This law will allow homeowners to have more equal footing when presenting their position to the board because there’s not a threat of catastrophic fines,” he said.

Toni Atkins Is Out

Former San Diego Senate president and gubernatorial candidate Toni Atkins announced Monday that she was dropping out of the 2026 governor’s race to replace Gavin Newsom.

Atkins struggled to poll above the low single digits after campaigning for more than a year, as CalMatters reported. She raised more than $4.2 million and grew a strong base in her hometown of San Diego but struggled to build name recognition outside the region in a crowded field with Democratic contenders such as former Rep. Katie Porter and former Los Angeles Mayor Antonio Villaraigosa.

Housing Permits in the Air

The city of San Diego permitted nearly 8,800 new homes in 2024, down from about 9,700 from 2023, according to the city’s annual housing report released earlier this week. It’s more than double the annual average from the last two decades, according to Mayor Todd Garcia’s office. The Downtown, Uptown and North Park areas have received the most home permits since 2021, a positive sign for housing advocates who see it as a step toward closing the gap on the city’s starved housing supply.

Garcia touted his leadership and pro-housing stance as the reason for the explosive growth.

“I’m proud that San Diego is leading the state, permitting more homes per capita than any of California’s other big cities,” he said in a statement.

Thanks for reading the Sacramento Report. If you have any tips or story ideas for my newsletter, please feel free to reach me at: nadia@voiceofsandiego.org.

What I’m reading 

• Gov. Gavin Newsom ends Kamala Harris’ California anti-truancy law, Politico reports.
• AP News reports a key court test begins for Texas’ redrawn US House map that boosts the GOP. 
• Charlie Kirk fallout hits California schools, where 20 teachers face discipline over posts. (CalMatters)

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