REPORT TO COUNCIL
SUBJECT
Title
City Council Study Session: Update on City’s Anti-Displacement Work Plan
Report
BACKGROUND
The Housing Element, one of the required elements of the City’s General Plan, includes policies and programs intended to help the City meet the housing needs of all current and future Santa Clara residents. State law requires that local jurisdictions update their Housing Elements every eight years and that the Housing Element be reviewed by the State Department of Housing and Community Development (HCD). HCD “certifies” housing elements that it determines to be in substantial compliance with State housing law. Since the Housing Element statutes were first enacted, six such cycles of adoption and certification have been completed. The Regional Housing Needs Allocation (RHNA) for the City of Santa Clara is 11,632 units. Throughout the sixth cycle Housing Element Update process, staff conducted a robust community outreach and engagement process with all segments of the community, which helped to shape many of the actions and goals. Planning Commission input and feedback were incorporated, with a final recommendation of adoption to Council. The City Council was engaged throughout the process, provided policy direction, guidance on site selection, and ultimately their support of the Housing Element.
The City’s sixth cycle Housing Element was adopted by the City Council on May 7, 2024, and certified by HCD on May 31, 2024.
California Assembly Bill 686 (2018) added a new provision to the housing element laws mandating that sixth-cycle housing elements include programs and activities to “affirmatively further fair housing” (AFFH). Sixth cycle housing elements must include deliberate actions to combat housing discrimination, address segregation, and foster inclusive communities so people of all income levels can live in high opportunity areas near jobs, transit, parks, shopping, and other amenities. Access to opportunity isn’t just about creating new affordable homes near amenities; it is also about taking steps to prevent the displacement of existing residents and small business owners as rents and home prices escalate and as older buildings are demolished and redeveloped.
The certified Housing Element includes commitments to explore and/or adopt new anti-displacement policies within specified timeframes. HCD holds cities accountable for commitments made in the Housing Element. Each year, the City must report to HCD on its progress toward meeting its RHNA and on the status of all of the actions and objectives in the Housing Plan. If HCD determines that the City is not making sufficient progress toward achieving its Housing Element goals, the City risks losing local land use control and eligibility for housing and infrastructure grants, including the upcoming One Bay Area Grant (OBAG) funding, described in more detail below.
In general, displacement occurs when a person or business is forced to relocate for reasons beyond their control. Direct displacement can result from steep rent increases, harassment, unsafe living conditions, and eviction. Indirect displacement can occur when a person can no longer afford to stay in their home because of rising rents, and it can happen more slowly over time. Cultural displacement can occur when older businesses and religious and cultural institutions lose their members over time, and the neighborhood slowly reorients towards newer residents and activities.
Chapter 3 of the City’s Housing Element includes an Assessment of Fair Housing (AFH) that identified and analyzed how patterns, trends, conditions, and practices could result in displacement and fewer housing choices for lower-income residents. A key takeaway from the City’s assessment is that, while the majority of recent and planned housing development in the City has occurred on marginal commercial and industrial properties, thus avoiding the kind of direct displacement of lower-income households that can happen through residential redevelopment, much of the City is vulnerable to indirect displacement due to high rents and rising home prices. As the City’s growth areas continue to build out, the pressure to redevelop older, lower-density “Naturally Occurring Affordable Housing” will increase. This presents Santa Clara with a critical and timely opportunity to proactively study and implement adopted and additional policies to address potential future direct displacement before it becomes widespread.
In response to these needs, the City’s Housing Plan, Chapter 2 of the Housing Element, includes goals, policies, actions, and objectives that promote and affirmatively further fair housing opportunities throughout the community for all persons. The Goals and Policies in the Housing Element that call for action on preventing displacement are:
Goal E: Affirmatively further fair housing by increasing access to opportunity, reducing displacement impacts, reducing cost burden, targeting outreach to lower income residents, and rehabilitating substandard living conditions.
Policy E-2: Work to reduce displacement of lower income residents from Santa Clara and to reduce the impact of relocation on low-income households.
Action 13: Residential Displacement…the City will evaluate potential displacement of residents, and develop and adopt measures, as appropriate, to address the risk of direct or indirect displacement of those existing residents.
There are 21 Housing Plan actions, including Action 13, that support the City’s anti-displacement objectives through measures designed to protect, preserve, and produce affordable housing.
Along with continuing or building upon existing programs, the City’s Housing Plan commits the City to evaluate several new policies that could prevent displacement in Santa Clara. These programs will be described below in the Discussion section.
Above and beyond the Housing Element, Bay Area jurisdictions must also meet specific requirements under the Metropolitan Transportation Commission’s (MTC) Transit-Oriented Communities (TOC) policies to align with regional goals for equitable and sustainable development near transit hubs, including adoption of programs that address the “3 P’s” of affordable housing - Production, Preservation, and Protection.
Compliance with TOC policies ensures eligibility for future funding under programs like the One Bay Area Grant (OBAG), which provides critical funding for transportation infrastructure and other planning activities in transit-rich areas. The City intends to apply for the next cycle of OBAG funds in 2026, so it is important to be in TOC compliance to maximize the City’s competitiveness for these funds.
In conclusion, the City has committed to exploring a variety of new policies to prevent displacement in Santa Clara and must follow through to ensure Housing Element and MTC TOC Policy compliance.
DISCUSSION
The objective of this study session is to:
1. Provide an overview of residential displacement, its forms, drivers, and potential impacts, and highlight existing State anti-displacement law.
2. Describe the City’s Anti-Displacement Work Plan, which includes actions that are currently underway, actions the City is already committed to doing at a future date, and new programs that will be evaluated for potential implementation.
3. Outline next steps toward the goal of returning to City Council by the end of May 2026 with findings and recommendations on specific programs and policies to further address displacement.
Residential Displacement in Santa Clara
According to survey analysis in the City’s 2025-2030 HUD Consolidated Plan, Santa Clara respondents reported that high and increasing rents were the primary reason for displacement, followed by eviction for being behind on rent.
Data gathered during the Housing Element Update process indicated that nearly 42 percent of renters in the City experienced housing cost burdens (paying 30 percent or more of gross income on housing expenses), with over half of those renters considered severely cost burdened (paying 50 percent or more of their gross income on housing). The higher the cost burden a person is experiencing, the more at risk they are of being priced out and or becoming homeless.
The Area Median Income (AMI) for Santa Clara County increased 15.8 percent from $168,500 in 2022 to $195,200 in 2025. In 2025, the moderate Income (up to 120% of AMI) for a family of four is $234,250. For reference, the average median income in the USA was $75,149 in 2024. Rising median income facilitates higher rents which contributes to displacement. In addition, affordable housing is based on median income, so as that rises, so do the rents that can be charged in affordable housing.
In 2025, to qualify as affordable to a Moderate-Income household, the maximum monthly rent for a 2-bedroom apartment in Santa Clara County is $5,271.
A new 2025 Bay Area Housing Finance Authority (BAHFA) report shows that eviction rates have been climbing in Santa Clara County post-pandemic as eviction moratoria and emergency rental assistance programs have been phased out and have recently exceeded pre-pandemic levels.
• FY 18/19, 1 in 100 renter households (1%) faced an eviction
• FY 23/24, 1 in 71 renter households (1.4%) faced an eviction
Meanwhile, the gap between the number of available attorneys that provide tenant legal services (TLS) and the estimated need is also growing, with an estimated ratio of one attorney for every 480 eviction cases in Santa Clara County. Legal aid providers estimate that a manageable eviction caseload per year is 40-50 cases per attorney. Tenants without legal representation are at a disadvantage when it comes to no-cause evictions, harassment, and unsafe living conditions.
Work Plan to Reduce Residential Displacement
Input received throughout the Housing Element Update process from residents and advocacy organizations representing seniors, people with disabilities, low-wage workers, and large families, resulted in many anti-displacement related actions being identified for the City to do or evaluate. Staff created the Work Plan to Reduce Displacement (Attachment 1), and organized these actions into the following categories:
1. Actions that are already underway;
2. Actions the City has committed to doing; and
3. Actions the City has committed to evaluate
Actions in the third category are briefly described below. To the extent that these measures are already addressed by existing State law, staff will evaluate opportunities to expand upon these existing requirements.
A. Setting a rent deposit limit.
a. Note:
i. This objective was drafted and adopted prior to the approval of AB 12 (Haney), which went into effect on July 1, 2024. This legislation changed the amount that could be charged for security deposits from 2-3 months’ rent to one month’s rent.
B. Requiring no net loss of income-restricted residential units during the construction of new housing or rehabilitation of existing housing.
C. Requiring the replacement of existing affordable units at the same or lower income level as a condition of development.
D. Requiring landlords to notify tenants and the City at least one year in advance of redevelopment and/or potential conversion to market-rate housing. Provide information regarding tenant rights and conversion procedures.
a. Notes for B, C, and D:
i. SB 330, the Housing Crisis Act (HCA), passed in 2019, includes no net loss and right to return provisions that apply to housing projects that will demolish existing residential units.
1. The no net loss provision ensures that redevelopment projects do not reduce the total number of housing units, and replacement units must be of equivalent size, and, if applicable, deed-restricted for affordability.
2. The right to return provision protects tenants displaced by redevelopment through relocation assistance, the first right of refusal to move into a comparable unit in the new development, and the unit must be offered at an affordable rent matching what they previously paid.
ii. TOC Policy compliance requires jurisdictions to comply with the HCA provisions without a sunset date. The HCA was set to expire on January 1, 2030; however, this sunset date was recently repealed with the approval of AB 130 (2025).
E. Require developers and property owners of existing rental buildings to provide relocation benefits beyond those required by the State when a residential building is redeveloped and when existing tenants are evicted for no cause or no fault.
a. Notes:
i. The HCA also includes relocation assistance provisions that apply primarily to low-income tenants who are displaced when a project demolishes existing residential units. However, the HCA does not specify the amount of assistance that must be provided.
ii. AB 1482, the Tenant Protection Act, passed in 2019, requires relocation assistance in the amount of one month’s rent for no-fault evictions.
1. A no-cause or no-fault eviction happens when a landlord ends a tenancy without the tenant having done anything wrong (e.g., no missed rent, no lease violations, no damage).
F. Policies, programs, and procedures that help minimize the risk of displacement caused by substandard conditions, including through local code enforcement activities.
G. Establishing a Community Opportunity to Purchase Act (COPA) program.
a. Note:
i. A Community Opportunity to Purchase Act (COPA) ensures that community not-for-profit organizations, such as community land trusts, have the first right to purchase a residential property if it is being sold or foreclosed upon. COPA programs can help create more opportunities to preserve naturally occurring affordable housing.
The Association of Bay Area Governments (ABAG) prepared a collection of Housing Implementation Guides to support local jurisdictions, community partners, and other stakeholders in developing and refining policies that both meet TOC Policy requirements and reflect local housing needs. A link to the complete collection is included as Attachment 2. Implementation guides related to the additional anti-displacement objectives that the City committed to evaluating are included as attachments 3 through 6.
Attachment 7 lists a range of anti-displacement policies/programs that jurisdictions in Santa Clara County are either proposing to continue, update, or evaluate as potential new programs.
Next Steps
• Collaboration: Continue learning from other jurisdictions' existing and proposed anti-displacement programs.
• Outreach: Develop and implement an outreach plan to gather input from the community (residents and stakeholders) on the above-mentioned anti-displacement policies.
• Recommendation: Return to City Council in 2026 with an evaluation and recommendations on specific new and/or modified programs and policies to address displacement. Staff may bring forward a few recommendations in early 2026 to meet TOC compliance timelines, with additional items to follow in May 2026.
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 the preparation of this report or with the study session.
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, emailing 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 City’s Anti-Displacement Work Plan.
Staff
Reviewed by: Afshan Hamid, Director, Community Development
Approved by: Jovan Grogan, City Manager
ATTACHMENTS
1. Work Plan to Reduce Displacement
2. ABAG Housing Implementation Guides
3. No Net Loss Guide
4. Tenant Relocation Assistance Guide
5. Code Enforcement Guide
6. Opportunity to Purchase Act Guide
7. Anti-Displacement Programs