After months of delay, the Fullerton City Council has submitted to the state what should be a compliant housing plan.

The state still has to review the plan, but Fullerton’s submission meets a key requirement for the city to zone for at least 13,209 new housing units.

The city had until the end of January to approve such a plan before facing the threat of litigation, fines and the withholding of up to $2 million of state funding, city leaders said in December.

For months, Fullerton’s elected leaders struggled with city staff and consultants to develop new zoning regulations that aim to preserve the city’s character and also allow for growth, Councilmember Nick Dunlap said.

“We’re trying to juggle the new and the old — zoning for and allowing new development alongside our historic downtown while creating enough of a buffer against historic properties,” he said.

The city’s submission to the state erred on the council’s instructions as far as building height restrictions near some buffer zones. However, when the error was discovered at a Jan. 21 council meeting, city leaders realized they did not have time to amend their submission to the state before the end-of-January deadline.

Instead, city leaders will vote this month to change the new zoning map to the way they intended it to be. A city lawyer said doing so should not threaten state compliance with the housing element. The height amendment would not change the total amount of housing Fullerton is planning, and it would only moderately affect where that housing can be built, officials said.

Fullerton’s trouble with the state housing agency began years ago.

When the state’s current housing cycle began in 2021, Fullerton, like many other cities across California, petitioned the state to reduce its mandated housing allocation.

Its mandate was too big an ask, the city argued.

If the allocation of 13,209 units were built, it would increase the city’s current housing stock by more than 30%. (Cities are not required to build housing, just to have the zoning and regulations in place that would allow the market to develop the mandated amount.)

However, like most cities, Fullerton lost its appeal.

But then, Fullerton also failed to produce a compliant housing plan.

And, from 2021 through 2023, the city permitted fewer than 600 new housing units, according to a city staff report.

Eventually, the state Department of Housing and Community Development referred Fullerton to the state Attorney General’s Office for being more than two years late in having a complaint housing document.

The city reached a settlement with the state in January in which city leaders assured future compliance. City officials blamed turnover in leadership at City Hall for the initial delay.

To meet their mandate moving forward, city leaders approved a zoning tool called a housing incentive overlay zone. The “HIOZ” will allow developers to build residential housing in many areas currently coded as industrial or commercial, and it will require developers to allot at least 20% affordable housing in new projects in such areas.

Dunlap said Fullerton ultimately struck the equilibrium it desired between adding housing and preserving historic charm.

“We were able to balance those ideas to get a policy passed that will allow us to meet the state mandate,” he said.

“Hopefully, HCD agrees and we can move forward.”