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Despite the California Department of Housing and Community Development’s acceptance of Hollister’s Housing Element in February, the city is still facing sanctions for being more than two years late in completing the legally required document.
The city expects the state to certify the document by June 19, after Hollister officials complete the required zoning updates through various public hearings. The housing element identifies how Hollister plans to accommodate 4,163 housing units through 2031, known as the Regional Housing Needs Assessment.
On March 26, state Attorney General Rob Bonta’s office announced a proposed settlement that sets deadlines related to the housing element and a requirement to create a $300,000 Housing Trust Fund Program intended for the development of affordable housing, migrant housing, emergency shelters, supportive housing and transitional housing.
If those funds are not used within five years, the remaining balance must be transferred to the State Building Homes and Jobs Trust Fund.
The city is required to submit a draft of the fund program and deposit the funds within 30 days after the department finds the housing element in substantial compliance.
“This reflects a commitment to making California a more affordable place for all,” Bonta said in a news release. “When cities fail to plan for housing, they are really just planning for rising costs, longer commutes, and increased pressure on families struggling to find a place to call home. Governor Newsom, HCD Director Velasquez, and I will continue to hold local governments accountable when they do not take steps to build their fair share of housing.”
The release says the agreement will require approval by the court. Though the agreement documents say it was filed with the San Benito County Superior Court, as of March 30, there was no record of it.
“The bottom line is that this goes along with the goals we have as a city council because it does help us target the type of housing we are really interested in for our local residents,” said Hollister Mayor Roxanne Stephens. “It comes down to affordability.”
She referred BenitoLink to City Manager Ana Cortez for additional information regarding the settlement. Cortez did not immediately respond to BenitoLink’s request for comment.
The settlement also requires the city to send the state a copy of an application of any project it receives that includes any of the above elements.
According to the settlement, the state is suspending and intends to waive civil penalties of at least $10,000 per month tied to the delayed housing element if the city “successfully satisfies” the terms of the agreement.
The settlement notes that those penalties would have been assessed starting January 2025 through the date the state certified the housing element.
If the city fails to adopt a housing element that complies with the law within 12 months of the settlement, the penalty increases by a factor of five, according to the settlement.
“Continued failure by the City to bring its Sixth Cycle Housing Element into substantial compliance with the Housing Element Law will entitle the State to pursue further penalties in accordance with subdivision (l) of Section 65585,” the settlement says.
Even if the city gets its housing element certified, it could still face penalties if a court determines Hollister “wrongfully denied or imposed improper conditions” on any housing development project, according to the settlement.
The settlement references a section of state law that states those fines are $10,000 per housing unit in the project.
The city has been working on the Housing Element for several years but it was delayed as previous versions were attached to the efforts of updating Hollister’s General Plan. That plan was rescinded in March 2025 after a successful referendum petition prompted the City Council to approve the requested rescission.
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