Dana Point's Second Strike: HCD Voids Its ADU Ordinance Again

You want to add an ADU in Dana Point, so you pull the city's ADU rules and start hitting walls: an owner-occupancy requirement, a hard 1,200-square-foot cap, a sixteen-foot height limit that boxes you into a single story. You shrink the project. Or you give up.

Here's the thing: the state's housing agency says some of those rules may not be enforceable at all.

On August 13, 2025, the California Department of Housing and Community Development (HCD) sent Dana Point a Second Notice of Violation and Corrective Action Letter. HCD found the city's newly amended ADU ordinance still violates State ADU Law — and its position is that the ordinance is null and void until the city fixes it.

Verified against: City of Dana Point — HCD Second Notice of Violation and Corrective Action Letter, dated August 13, 2025 (Ordinance No. 25-04).

What actually happened

This isn't Dana Point's first letter. Since January 2023, HCD has reviewed three successive versions of the city's ADU ordinance and found none compliant. After a December 10, 2024 Notice of Violation, the city adopted Ordinance No. 25-04 — and, per HCD, stayed out of compliance. In HCD's words, "out of the 12 findings previously made by HCD, eight remain," on top of a fresh batch of new findings.

The letter runs long. It documents defects across the ADU and JADU sections — more than three dozen enumerated findings, from a broken severability clause to setbacks, parking, height, and size. A few that hit homeowners directly:

• Owner-occupancy. The ordinance made ADUs subject to an owner-occupancy requirement. HCD found that "while this requirement is appropriate to apply to a JADU, it is not permitted for an ADU," and ordered the city to "remove owner-occupancy requirements for ADUs."
• Size caps. The ordinance says "in no case shall an ADU" include living area larger than 1,200 square feet. HCD found that ADUs approved under Government Code section 66323 "are not subject to maximum floor areas," and told the city to add the exceptions.
• Height. The ordinance limited detached ADUs to sixteen feet and "one story." HCD found that State ADU Law "does not allow the City to prohibit a second story ADU if a second story would be feasible under the CBSC for the applicable height limit."

The line HCD drew

Here's the part with teeth. Government Code section 66316 says that when a local ADU ordinance "fails to meet the requirements of this article, that ordinance shall be null and void and that agency shall thereafter apply the standards established in this article …" HCD applied that to Dana Point by name:

"Ordinance No. 25-04 is null and void, due to the violations described in this Notice, and the City must apply the standards in State ADU Law instead of Ordinance No. 25-04, until it adopts a valid ADU ordinance."

And HCD didn't stop at the ordinance. The city had also been declining to process ADU applications under State ADU Law while its ordinance stayed broken. HCD found that "adopting a noncompliant amended ordinance while refusing to process ADU applications under State ADU law constitutes 'tak[ing] an action in violation of' State ADU Law under Government Code section 65585, subdivision (j)(15)." The letter gave the city until September 12, 2025 to respond, and flagged possible housing-element decertification and referral to the Attorney General.

What it means if you're building

If HCD's position holds, the practical takeaway is this: a barrier you're hitting in Dana Point's ADU ordinance may be one HCD considers unenforceable, and the city may owe you review under State ADU Law in the interim.

But read that carefully. This is HCD's enforcement position, not a court ruling. HCD letters carry real weight, but they aren't the final word — courts decide the law, and how any of this lands on your specific project turns on details the ordinance alone doesn't settle — for one, part of Dana Point sits in the coastal zone, and HCD's letter itself notes that State ADU Law doesn't override the California Coastal Act.

So don't freelance it. If a Dana Point requirement is blocking your ADU, put the ordinance section and the matching state statute side by side, then verify with the city's planning department and your own counsel before you rely on any of it. This isn't legal advice; it's a map of where to look.

What CrossBeam does with it

When the letter lands on your desk, CrossBeam turns it around the same day: what each item is actually asking, the code or law behind it, and a written response you can hand to your team or your attorney — the back-and-forth that used to eat weeks, done in a couple of hours.