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Amy Kalish, photo taken in San Mateo
Think those razor sharp RHNA numbers are based on something scientific?
The state of California has assigned a large number of housing units — 14,405 — to be sited, and seen built, in Marin County. This is in keeping with eight year housing cycles, known as RHNA (Regional Housing Needs Allocation). This is a statewide process, and this is the 6th RHNA cycle. But 6th cycle RHNA is completely different from past cycles in the number of reports that must go into creating a “housing element” document the state will certify, and in the outrageous amount of new housing areas are expected to absorb. The added requirements, plus pressure on cities to actually somehow produce the housing (cities don’t build), has proven a costly and time consuming exercise. Cities and counties were so alarmed by the RHNA that detailed appeals were filed, protesting their size and the 40% weighted towards market rate housing, which is wholly unnecessary, All appeals were denied, and the HCD (California Department of Housing and Community Development) has stood firm even after new population projections were released refuting the need for 2.5 million more units of housing in the state; our population is expected to remain relatively flat all the way out to 2060, not grow by over 7 million by 2031.
The HCD has stood firm even through a failed audit, and the paper I’m linking to here acknowledges that the outsized RHNA was ad-hoc rather than model-based.
Background Paper for Audit of Regional Housing Needs Determination Process
Elmendorf et. al. Cover Letter:
Elmendorf et. al. Report:
In 2021 California Senator Steve Glazer’s office requested an emergency audit of the HCD/RHNA numbers.
The RHNA failed this scaled down audit, but a full audit was never requested, and no changes were made at HCD to correct the flaws the audit uncovered.
These include:
“Overall, our audit determined that HCD does not ensure that its needs assessments are accurate and adequately supported.
In reviewing the needs assessments for three regions, we identified multiple areas in which HCD must improve its process. For example, HCD does not satisfactorily review its needs assessments to ensure that staff accurately enter data when they calculate how much housing local governments must plan to build…This insufficient oversight and lack of support for its considerations risks eroding public confidence that HCD is informing local governments of the appropriate amount of housing they will need.”
The document linked to, above, is the “Background paper prepared for the California State Auditor in relation to the audit ordered by the Joint Legislative Audit Committee on Oct. 11, 2021.”
One of the key authors is Professor Chris Elmendorf of UC Davis, the media’s go-to for virtually every story about housing policy.
The bias, laid out in detail here, extends toward overproduction of dense, multi-unit housing, and application of pressure through state law.
This document fully backs the assumption that all regions are able to, and should, accommodate massive growth, and seeks to validate the HCD process for the RHND — Regional Housing Needs Determination — from which the RHNA is derived.
The paper is long and dense but worth the read if you are trying to understand where the housing mandates are coming from, and why cities’ concerns — and common sense — have been ignored.
I’ve pulled out a few noteworthy passages, below. They go a long way towards explaining why all appeals filed by cities and counties for reductions were denied. This argument is completely academic, and literally trivializes any consequences to a city for not making its RHND.
The conclusions seem divorced from the real-life legal ramifications of not fulfilling RHNA, though Senator Wiener, the father of California’s punitive housing policy, has declared that these numbers are “no longer a paper exercise” and the Housing Accountability Act, Attorney General Bonta’s Housing Strike Force, and over 100 new housing laws are in place to ensure that localities eliminate any factors that could inhibit housing, and yield to developer’s
The description of SB 35 (a law that allows speedy approvals for super-sized development in cities that didn’t meet previous RHNA targets) doesn’t reflect the changes made by SB 423 (which reduces the level of affordability required in a project, and extends to the coastal areas, overruling the Coastal Commission) and builder’s remedy (a “zoning holiday” that allows developers to ignore zoning restrictions — massive out of context structures are punishment for cities without certified housing elements) is not mentioned at all, nor are the threatened loss of housing/transit funds, and — as far as I can tell, the “escape hatch” mentioned is non-existent.
Not considered are the exorbitant costs on cities for completing the housing element itself, any of the lawsuits, fines, drought, hazards, infrastructure strains or other issues a city might have. Constraints obviously don’t exist if someone can still figure out a profitable way to build in a city (no type or location of multi unit housing is considered imprudent). Affordablity is not the concern. The focus is merely on an overall increase in housing stock.
There is an admission that “current need” is undefined, and the RHND numbers rely on guesswork between a massive spread of 1.1 to 3.4 million units. The contention that “cities are only following their own general plans” forgets to mention that those plans underwent a forced revision, as did zoning.
All of the bolding is mine.
Here are excerpts from the document referred to, and linked above:
“Also worth bearing in mind is that arguments about negative traffic, noise, or aesthetic spillovers from new development are sometimes pretextual... the clearest conclusion is this: California should not defer to municipal judgments - and especially not to neighborhoods' judgments - about whether the benefits of new housing outweigh the costs.”
“Of course, this conclusion does not answer the question of whether the statewide housing deficit is closer to 1.1 million units or 3.4 million units. Nor does it shed any light on how much closing of the deficit can practically be achieved during an eight-year planning period. It does mean, however, that the state should put pressure on local governments to allow a lot more housing, especially multifamily buildings with small units.”
IV. Because the Costs of Error Are Asymmetric, There's No Need for the Legislature to Monitor and Adjust RHNAs that Cities Say Are "Too High"
It should be clear from this background paper that determinations of regional housing need are inherently uncertain (as evidenced by the wide range of scholarly estimates reviewed in Part Il), and also that the discretionary choices that HCD must make to implement the statutory framework can have big consequences for the size of the RHNDs.
Whether California's true housing deficit is closer to 1 million or 3 million homes, there's no way that California will make headway on its housing crisis by requiring a few dozen small jurisdictions outside of the major metro regions to rezone for a grand total of 35,000 more dwellings.
Now consider the opposite scenario: RHNAs that are too large, that require a city to plan for more housing than it can practically accommodate in economically sensible locations during the planning period. The "harm" in this scenario is actually trivial. If a city receives a "too large" allocation, this requires - at most - that the city provide zoned capacity on paper sufficient to accommodate it. The state has distributed hundreds of millions of dollars in planning grants, and cities don't have to spend a penny of their own revenues on affordable housing or land for housing. Gov't Code § 65589(a). In fact, the law expressly recognizes that "total housing needs ... may exceed available resources and the community's ability to satisfy this need within the content of the general plan." Gov't Code § 65583(b)(2). "Under these circumstances," a city may set "quantified objectives" for new housing that "need not be identical to the total housing needs." Gov't Code § 65583(b)(2). It would be unfortunate if a Council of Governments assigned its RHND to cities that didn't have much capacity and therefore set low quantified objectives, but for present purposes the important point is if this were to occur, the cities could avail themselves of the statute's escape hatch.
For the sake of argument, let's consider what would happen if a city that truly lacks capacity to accommodate its RHNA is pressured by CD into undertaking a big rezoning to accommodate the RHNA on paper. Will this unleash chaos in the city? Not at all. Consider four ways in which a city could be "without capacity" to accommodate its too-large RHNA:
- City A lacks capacity because its infrastructure is inadequate. It would need a new sewage treatment plant to accommodate the RHNA.
- City Blacks capacity because all of its developable land is in an extreme fire danger zone, where it can't be safely developed.
- City C lacks capacity because it's built out: all of its developable sites have such high-value existing uses that even if they were rezoned for dense multifamily housing, no one would redevelop them because the profit from redevelopment would be less than the value of the existing use.
- City D lacks capacity because demand for housing is so low that development of even vacant sites would be a money-losing proposition.
In none of these cities will rezoning to accommodate the RHNA trigger a rush of development.
In cities A and B, developers would like to build projects on the rezoned sites, but they won't do it because state law allows cities to deny zoning-compliant projects on the basis of objective health or safety standards. Gov't Code 65589.5). The inadequate sewer system in City A and the fire danger in City B would justify health-or-safety denials. Meanwhile, in cities C and D, developers won't propose projects because there's no money to be made from them.
On the other hand, if it turns out that some sites in cities A or B actually can be developed without a health or safety violation, or if some sites in cities C or D can be developed at a profit, then developers will propose projects on the rezoned sites. But in this event the city has no cause to complain, because what the developer's proposal demonstrates is that the city does have capacity for more housing, despite its earlier protestations to the contrary.
There are no penalties under state law for cities that fail to meet their RHNA targets. The only consequence of falling short is that, under SB 35, the city will be required to review ministerially certain multifamily housing projects that comply with the city's own objective zoning and development standards. This is a trivial imposition, given that SB 35 leaves cities free to deny any project that runs afoul of the city's zoning ordinances and general plan, or that violates a health or safety standard. SB 35 projects must also comply with strict labor standards and provide below-market-rate units. This makes them economically viable only in places where housing prices have risen substantially above than the normal labor-and-materials cost of construction. In short, the only real consequence of a "too large" RHNA is that places with serious housing shortages will actually have to approve housing on sites they have zoned for it.
This is a benefit, not a cost.
Because the costs of underestimating regional housing need are substantial, and the costs of overstating it are trivial, CD ought to err on the side of making the RHNDs too large.
End excerpts.
Anyone interested in the origin of the RHNA, and why it dues t make sense in our reality, is encouraged to read the document in its entirety.
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For another presentation extolling unfettered housing development, see this compellingly simplistic “explainer” of the housing mandate process put out by YIMBY Action.
https://drive.google.com/file/d/1Qp33MDEaZrLzcmEbF3hBCR03XxnVs6A7/view
Their take is also absent of reflection on whether growth is appropriate or achievable, and is based on the assumption that all residential density would be created for the greater good, if only the cities would allow it. All of their material follows very simplistic narratives, and has effectively obscured the complexities of housing policy.
SUPPORTING DOCUMENTS AND BACKGROUND::
Senator Glazer’s audit request letter: https://legaudit.assembly.ca.gov/sites/legaudit.assembly.ca.gov/files/Regional%20Housing%20Needs%20Determination%20Process%20%28Sen.%20Glazer%29.pdf
Acting Auditor Tilden’s Report:
https://www.auditor.ca.gov/reports/2021-125/index.html
California’s revised population projections: https://www.mercurynews.com/2023/07/26/california-exodus-state-population-projected-to-remain-the-same-through-2060/
https://www.globest.com/2023/07/28/california-projects-zero-population-growth-through-2060/
Sample of a rejected RHNA appeal based on changed conditions: Mill Valley
https://abag.ca.gov/sites/default/files/documents/2021-07/2023-2031_RHNA_Appeal_City_of_Mill_Valley.pdf
More:
https://marinpost.org/blog/2023/11/29/does-sacramento-housing-existing-need-even-exist?query=Gaetan+lion§ion=blog