CALIFORNIA HOUSING MANDATES AND RHNA

Summary by Amy Kalish

HOUSING MANDATES EXPLAINED + WHAT IS RHNA? RHNA is the Regional Housing Needs Assessment — the number of housing units (a place for at least one person to live) assigned to an area by the state. This happens in eight-year housing cycles, and the allocation numbers are determined by the California Department of Housing and Community Development (HCD).

WHERE DOES IT COME FROM? The total number is supposed to represent California’s predicted housing needs over the next eight years. This is the 6th RHNA cycle, covering 2023-2031. The HCD says California is short 2.5 million housing units. (Walked back from Newsom’s unsubstantiated campaign assertion of 3.5 million). The numbers have been questioned.

DID RHNA FAIL AN AUDIT? Yes. The 2.5-million-unit requirement was not in line with projected population growth even before the pandemic. An emergency state audit was requested. The result of the audit: The California State Auditor found that the numbers were not reliable, the numbers were not reproducible, and the methodology was opaque. All documentation is available at citizenmarin.org on the AUDIT page. The audit result was ignored by HCD, and the 2.5 million wasn’t adjusted. It was chunked out into regions. Ours — the Bay Area — was assigned 441,000 new units to be distributed over each city.

IS THIS HOUSING CYCLE DIFFERENT? Yes. The 6th cycle is NOT like other cycles. The numbers are huge. Marin county’s RHNA went from 2,298 (5th Cycle) to 14,405 (6th Cycle). Mill Valley went from 129 units to 865. Belvedere went from 16 units to 160 units. Tiburon went from 78 to 639. Unincorporated Marin went from 185 to 3,569. Chart included below.

DID CITIES APPEAL? Yes. Cities were shocked by the huge rise in their RHNA, and many across the state appealed based on “changed conditions” including drought, fire, lack of evacuation access, flood zones and other hazards, infrastructure issues, lack of buildable land, environmental concerns, etc. All these appeals were denied without comment. You can read all the Marin County appeals on the CITIES page.

WHAT IS A HOUSING ELEMENT? Each locality, by law, must create a Housing Element plan and document showing where the RHNA units can be accommodated, and submit it to the state for approval. In the past, these reports were not too difficult to create and were done by in-house staff. This cycle, the numbers were so overwhelming, and the Housing Element added so many new required reports that cities had to hire consultants to write them. This has been taking time and energy away from our city governments for a couple of years now. Sausalito, the only Marin city so far with a certified housing element, spent over $700,000 of taxpayer money to create it. Unincorporated Marin has spent over $2 million for a 700+ page Housing Element that was just rejected for the second time. About half the cities in the state are still in this position.

WHO BUILDS THE HOUSING? Except for a few affordable projects that are built on donated city land with a small amount of grand money made available, the state expects for-profit developers to build the housing. However, since market-rate and luxury housing have far-greater profit margins, it’s much more likely that expensive homes will be built rather than more affordable units.

 WHY SO MANY NEW HOUSING LAWS? The state declared a housing crisis in 2018. Cities were blamed for lack of affordable housing and for not producing enough housing, even though cities do not build. So, the legislature passed new laws to speed up approvals for multi-family developments by forcing local authorities to rezone for greater density, and approve projects swiftly, often without public input or environmental review. The three things that are literally demonized by the state as holding up construction are Zoning, CEQA, and public input. (Those are also called city planning, the environment, and local voice/democracy.) Some of these have sometimes slowed the process, but more often produce community/developer/city compromise.

New laws speed up approvals for multi-family developments by forcing local authorities to rezone for density, and approve projects swiftly, without CEQA or public input. Attorney General Bonta’s office has a special housing Strike Force to strictly enforce new laws and policies. Besides fines, most punishments give developers more power, and cities less. Fines can bankrupt cities, put them into receivership, and require cities to cede all zoning control to the state. The state can then decide which public lands will be donated or sold for housing projects.

DOES THIS CREATE LOW INCOME HOUSING? The laws are sold that way, but what they mostly do is create luxury and market-rate housing along with a very few less expensive units for low-income households. Since developers typically lose money on the low-income units, many of these new laws offer density bonuses and other incentives to developers to add 10-20% of “affordable” units in their projects. This is supposed to “trickle down” and result in lower rents and housing costs.

DOESN’T THAT JUST RESULT IN MORE EXPENSIVE HOMES? Yes.RHNA is broken into categories, each of which needs to be fulfilled exactly, or the city is declared out of compliance. For example, Belvedere will be required to build 160 homes, 100 of which need to be for low- income households. But even if a new development project includes 20% affordable units, the City would need to approve five times the number of units to get the required low-income ones built. That means building 500, maybe even 1000 new homes here in order to get 100 new low-income units. The numbers will never add up!

WHAT IS LOW INCOME IN MARIN? Marin has a high median income, and a percentage of the median income is the basis for the categories. The low-income category in Marin starts at $104,000 for a single person, and goes to about $150,000 for a family of four, etc. See the chart below.

DOES THE CITY GET CREDIT FOR THE UNITS APPROVED? No. The state doesn’t measure success by entitlement (approval) of projects, but by the numbers of permits pulled and housing units completed. Cities do not build, developers build, but the state says it will penalize cities with the required number of homes in each category that aren’t constructed. In times of high interest, high construction costs, supply and labor shortages, high wildfire risk, drought and insurance underwriting changes, development may slow. But the State doesn’t care.

California’s largest property insurer halts new home policies due to wildfire risk, rising costs https://www.sfchronicle.com/california-wildfires/article/state-farm-stops-california-home- insurance-18122670.php

IN CONCLUSION: There are shortages of affordable housing throughout the state, but there is no crisis regarding expensive homes, and until the state decouples housing mandates from private development, we’re going to see a surge in production in the wrong direction. All cities in Marin are set up to fail. I support cities joining the SB9, HCD/RHNA, and Huntington Beach lawsuits to create a future that is less antagonistic and more productive between cities and the state.