REPORT TO COUNCIL
SUBJECT
Title
Joint City Council and Planning Commission Study Session on Housing Element Update
Report
COUNCIL PILLAR
Promote and Enhance Economic, Housing and Transportation Development
BACKGROUND
Santa Clara, like all other Bay Area towns, cities, and counties, will be required to submit an adopted Housing Element to the State Department of Housing and Community Development (HCD) by January 2023. The Housing Element must identify sites planned for new housing and support pro-housing policies and strategies to demonstrate that Santa Clara can address the City’s housing needs for all income levels and achieve the development of the City’s Regional Housing Needs Allocation (RHNA) by the end of the 6th Housing Element Cycle in January 2031. The City’s RHNA is 11,632 units, with those units distributed into four levels of affordability. Santa Clara, with help from the City’s planning consultant, MIG, Inc., is currently preparing a comprehensive update of the City’s General Plan Housing Element to fulfill this State requirement.
DISCUSSION
The purpose of this study session is to:
1. Review and provide an update on the following background information that was provided at earlier study sessions with the City Council (April 6, 2021) and Planning Commission (September 22, 2021).
a. City’s Regional Housing Needs Allocation
b. Strategies for Meeting the City’s RHNA
c. New State Housing laws
2. Provide a more detailed overview of the State’s new affirmatively furthering fair housing (AFFH) requirements and Assessment of Fair Housing (AFH) component of the Housing Element Update.
A copy of the April 6, 2021 City Council study session staff report and presentation are attached for reference.
Santa Clara Regional Housing Needs Allocation
The RHNA process for the 9-County Bay Area region began with HCD determining the total number of new homes that would need to be built, and how affordable those homes would need to be, in order to meet the housing needs of people at all income levels. The Bay Area’s RHNA for the 8-year period covering 2023-2031 is 441,176 housing units, an almost 135% increase from the current 2015-2023 RHNA, which was 187,990 units.
The Association of Bay Area Governments (ABAG) then conducted a public process to develop a RHNA Plan for distributing a share of the region’s housing need to each of the Bay Area’s towns, cities, and counties.
Following that process and subsequent to the City’s previous study sessions, on January 12, 2022, the HCD approved the ABAG adopted 6th Cycle (2023-2031) RHNA Plan.
The final allocations for the City of Santa Clara, and how that relates to allocations for Santa Clara County and the Bay Area, are as follows:
• Bay Area: 441,176 units
• Santa Clara County: 129,579 units
• City of Santa Clara: 11,632 units
The RHNA numbers are also assigned to different rent/cost levels that correspond to what is affordable for different households based on their income levels as a percentage of the Area Median Income (AMI). This is a breakdown of the City of Santa Clara final allocations by income category:
• Very Low (0-50% AMI): 2,872 units
• Low (50-80% AMI): 1,653 units
• Moderate (80-120% AMI): 1,981 units
• Above Moderate (120%+ AMI): 5,126 units
Based on this distribution, a majority of the City’s RHNA is intended to fall within the affordable categories with approximately one-third affordable to Very Low and Low- Income categories. Conventional residential development, including development subject to the City’s 15% Inclusionary requirement and supplemented by 100% affordable housing projects, would not normally be expected to generate the same percentage of affordable units. As planned residential lands within the City are developed, the City must demonstrate on an annual basis that it maintains the capability to produce the full amount of affordable units in the City’s RHNA on the remaining residential land.
Therefore, to comply with the State’s No Net Loss Law, jurisdictions are required to ensure that sufficient capacity exists in housing elements to accommodate their RHNA throughout the entire eight-year planning period, especially in the affordable income categories. HCD recommends jurisdictions create an adequate buffer in their sites inventory of between 15 and 30 percent more capacity than required. HCD carefully reviews the Housing Element submitted by each jurisdiction and may not approve a Housing Element that they consider unlikely to achieve the RHNA.
For Santa Clara, a buffer between 15 and 30 percent would mean establishing capacity for between approximately 13,377 and 15,122 units at the start of the 6th Housing Element Cycle. Santa Clara will also track development of the sites in the inventory annually to ensure that the remaining sites are sufficient to meet the City’s unmet RHNA.
Strategies for Meeting Santa Clara’s Housing Needs
As described in the previous study sessions, demonstrating that the City has the ability to meet the City’s 6th Cycle RHNA (11,632 units) will be a challenge. In the seven years of the current 5th Cycle, where the City has a much smaller RHNA of 4,093 units, a total of 5,266 units have been created (building permits issued), which is an average of approximately 750 units per year. In order to achieve the City’s 6th Cycle RHNA (11,632 units), the City would have to almost double previous housing production, building an average of approximately 1,450 units each year for the next eight years. With the number of units anticipated from the City’s current and ongoing long-range planning efforts (El Camino Real, Patrick Henry Drive, and Tasman East Specific Plans, Downtown Precise Plan, and Freedom Circle Focus Area) and other pending and anticipated housing projects, Santa Clara should be able to demonstrate sufficient capacity, including an adequate buffer, to meet the 6th Cycle RHNA Housing Element requirement.
The City’s recently adopted affordable housing ordinance, pending Zoning Code Update, and programs and policies being brought forward in the Housing Element update will facilitate the production of housing at all levels of affordability and help to fulfill the supporting policy requirements for the Housing Element.
Attached for reference is the Housing Plan from the current Housing Element, which includes the City’s goals, policies, and implementing actions for housing production, as well as for the conservation (i.e., maintenance) and preservation (i.e., protection against conversion to market rate) of existing affordable housing stock, and housing support and services.
New State Housing Laws
AB 215 (2021). This legislation was approved on September 28, 2021, after the previous study sessions. Among other changes, this law requires local jurisdictions to make the first draft of revisions to housing elements available for public comment for at least 30 days and for jurisdictions to take at least 10 business days to consider and incorporate any public comments before submitting the draft to HCD. The law also increases HCD’s review of draft housing elements from 60 days to 90 days. HCD has 60 days to review subsequent drafts and/or the adopted Housing Element. This results in a significant change to the City’s schedule for preparation of the Housing Element, effectively shortening the time available by 70 or more days from what was previously discussed with the Council. Staff has worked with the consultant to incorporate these new requirements into the schedule below.
The following are key milestones for the City’s Housing Element Update:
• 2022
o April - Housing Stakeholders Meeting(s)
o April 19 - Joint City Council / Planning Commission Study Session
o Early June to early July - Public Review Draft Housing Element
o Mid-June - Housing Stakeholders Meeting(s)
o Mid-July - Joint City Council / Planning Commission Study Session
o Late July - Submit Final Draft Housing Element to HCD
o Late October - Receive comments on Final Draft Housing Element
o Early November - City Council Study Session
o Mid-November - Planning Commission Hearing
o December - City Council Adoption Hearing
• 2023
o By January 31 - Submit Adopted Housing Element to HCD
o By May 31 - within 120 days of January 31, 2023, the City must have an adopted and HCD certified Housing Element
AB 686 (2018). Another new State requirement, AB 686, was highlighted in the previous study sessions. This law added a new provision to ensure all laws, programs, and activities, including housing elements, affirmatively further fair housing. All housing elements must now include a program that promotes and affirmatively furthers fair housing opportunities throughout the community for all persons and all housing elements must contain a detailed AFH.
Attached for reference is an AFFH guidance memo that HCD released last spring. The introduction provides the background and history of AFFH. Part 1 describes the obligation for all public agencies in California to affirmatively further fair housing. Part 2 includes an overview of how AB 686 amended Housing Element law.
AB 686 added to or expanded on the following housing element requirements:
o Public outreach - jurisdictions must make a diligent effort to include public participation from all economic segments of the community and key stakeholders in meaningful, frequent, and ongoing participation.
o Assessment of Fair Housing - jurisdictions must identify and analyze local and regional trends related to:
o Fair housing enforcement and outreach
o Integration and segregation
o Racially or ethnically concentrated areas of poverty
o Disparities in access to opportunity
o Disproportionate housing needs, including displacement risk
o Site Inventory - analysis should:
o Address segregation and integration, how sites are identified in a manner that better integrates them with the community and how sites impact existing patterns of segregation
o Evaluate whether RHNA income groups are concentrated in a certain area(s) of the city
o Identification and prioritization of contributing factors - evaluation must:
o Identify fair housing issues and significant contributing factors
o Prioritize contributing factors (giving highest priority to factors that most limit or deny fair housing choice or access to opportunity)
o Discuss strategic approaches to inform and strongly connect goals, policies, and actions
o Goals, Policies, and Actions - must have specific commitment to deliverables, measurable metrics or objectives, definitive deadlines, date, or benchmarks for implementation. Programs to “explore” or “consider” on an “ongoing” basis are inadequate to demonstrate a beneficial impact in the planning period.
The City of Santa Clara is a participant in the Santa Clara County Assessment of Fair Housing, a collaborative examination of structural barriers to fair housing choice and access to opportunity for members of historically marginalized groups protected from discrimination by the federal Fair Housing Act . This assessment, which will outline potential fair housing priorities and goals to overcome fair housing issues from a cross-jurisdictional and regional perspective, should provide a good basis for identifying fair housing policies and programs that could be incorporated into the City’s Housing Element.
The study session will provide an opportunity to review and discuss AB 686 and what other jurisdictions with recently adopted and certified housing elements are doing to take meaningful actions that combat housing discrimination and address significant disparities in housing needs and access to opportunity.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15378(b)(5) in that it is a governmental organization or administrative activity that will not result in direct or indirect changes in the environment.
FISCAL IMPACT
There is no fiscal impact associated with this status report. On January 25, 2022 the City Council approved a consultant agreement with MIG, Inc. to update the City’s Housing Element and accepted $499,150 in reimbursable grant funding from the State’s Local Early Action Planning (LEAP) grant program. Of this grant funding, $199,968 will be used to fund MIG’s work and the remaining $299,182 will be used to fund City staff expenses. All grant funds must be expended on or before December 31, 2023.
COORDINATION
This report was coordinated with the City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov> or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
Note and file the report on the Housing Element Update.
Staff
Reviewed by: Andrew Crabtree, Director, Community Development Department
Approved by: Office of the City Manager
ATTACHMENTS
1. April 6, 2021 City Council Study Session Staff Report
2. April 6, 2021 City Council Study Session Presentation Slides
3. Current Housing Element Housing Plan
4. April 2021 HCD Affirmatively Further Fair Housing Guidance Memo