STAFF REPORT
Meeting Date: August 2, 2022
To: Honorable Mayor & City Council
From: Timothea Tway, AICP, City Planner
Cynthia Owens, Policy and Management Analyst
Subject: Regional Housing Needs Assessment Reform Comment Letter Attachment: 1. Draft Comment Letter from City of Beverly Hills to Southern California Association of Governments on Regional Housing Needs Assessment Reform
INTRODUCTION
The Southern California Association of Governments (SCAG) is currently undertaking an effort to gather input on Regional Housing Needs Assessment (RHNA) reform.
Comments from jurisdictions on RHNA reform are due to SCAG by August 2022. This report provides an opportunity for the City Council to discuss the contents of a potential comment letter from the City of Beverly Hills on the RHNA reform effort.
BACKGROUND
Regional Housing Needs Assessment (RHNA)
RHNA is a State Housing Law requirement that is meant to determine existing and projected housing needs for a jurisdiction during a specified planning period. In short, it is the number of housing units that a jurisdiction is required to plan for during the next eight years. RHNA is an important aspect of the housing element update process, as the content of the housing element is partially informed by the RHNA allocation that is assigned to a jurisdiction. For context, the City of Beverly Hills RHNA allocation for the current cycle is 3,104 units. This means that the City must plan for 3,104 units to be constructed over the next eight years.
The RHNA allocation process begins at the state level when the state provides a regional housing need determination to each region (how many housing units are projected to be needed in the region as a whole during the planning period). Then, the regional allocation is distributed to each jurisdiction in a region based on a number of factors that are defined through a specified methodology. In the last RHNA allocation process the primary factors that dictated the RHNA allocation to each City in the SCAG region were based on share of regional household growth, job accessibility, transit accessibility, and social equity (how resource rich an area is).
More information on the RHNA process, past RHNA discussions, and the RHNA reform effort can be found at https://scag.ca.gov/rhna.
Meeting Date: August 2, 2022
DISCUSSION
During the prior Housing Element update process (6th Cycle), SCAG reported that a number of concerns were raised by jurisdictions related to various aspects of the RHNA allocation process. Because of this, SCAG is undertaking an effort to engage stakeholders in an effort to collect comments and ideas for the reform of the RHNA process.
Additionally, the State is currently undertaking a process to reform the RHNA process, and there is a requirement that the California Department of Housing and Community Development (HCD) must submit a report on the topic to the Legislature by December 31, 2023.
In order to provide input to the state’s RHNA reform process, SCAG is requesting that jurisdictions and the public provide comments to them by August 12, 2022. SCAG will review all the comments they receive and make recommendations to their board based on the input they receive.
On July 6, City Staff attended a virtual informational and input session hosted by SCAG on the topic of RHNA reform. During this informational session, SCAG staff provided an overview of the RHNA process, and hosted breakout sessions on:
1) The regional determination process (how the number of units are allocated to the region from the state),
2) Methodology (how the number of units are allocated to jurisdictions), 3) Appeals (the process by which a jurisdiction can appeal their draft allocation), and
4) “Other”.
Some of the questions raised by SCAG during the informational session to spur conversation included:
What aspects should be considered for distribution of RHNA to each City within a region?
Is the formulaic approach to RHNA distribution appropriate for SCAG? Is there interest in taking on subregional delegation for RHNA? Should trade and transfer of RHNA units be allowed?
o When should this be allowed during this process?
o Should there be parameters, such as only applying to market rate units? Is eight years too short for both projection and planning periods? What factors should be considered during the RHNA allocation appeal process? Staff has developed the attached draft comment letter to be submitted to SCAG based on the information provided at this session, as well as the following statements from the City Council adopted 2022 Legislative Platform:
Pursue incentive-based housing legislation to encourage expanding the housing supply in our area including more flexibility for local jurisdictions to work together to provide housing that counts toward Regional Housing Needs Assessment (RHNA) requirements.
Support legislation where RHNA is reverted back to a planning tool rather than being used as punitive punishment for jurisdictions who are unable to meet their assigned RHNA numbers even when the adopted General Plan for the jurisdiction has been modified to accommodate the assigned RHNA number.
Meeting Date: August 2, 2022
FISCAL IMPACT
No fiscal impact is anticipated as a result of this discussion.
RECOMMENDATION
Staff recommends the City Council review the attached draft comment letter, provide direction to staff as to whether there are any desired edits for the letter, and direct staff to submit a comment letter to SCAG.
Ryan Gohlich, AICP
Director of Community Development
Approved By
Attachment 1
Draft Comment Letter from City of Beverly Hills to
Southern California Association of Governments on
Regional Housing Needs Assessment Reform
Lili Bosse
Mayor
August 5, 2022
Jan C. Harnik, President
Southern California Association of Governments
900 Wilshire Boulevard, Suite 1700
Los Angeles, CA 90017
email: [email protected]
Re: Stakeholder Input on Regional Housing Needs Allocation Reform Dear President Harnik,
On behalf of the City of Beverly Hills, I am writing to you to provide our input on reforming the regional housing needs allocation (RHNA) requirements. California is experiencing an extreme housing affordability crisis, which has exacerbated the state’s homelessness crisis. We believe that state and local governments must find innovative ways to meet the state’s housing production needs due to the depth and breadth of this issue.
The City of Beverly Hills faces prohibitive obstacles in the development of affordable housing due to high property values and a lack of vacant land for residential development; therefore, we are always searching for innovative ways to construct affordable housing. For example, the City purchased land in the City of Los Angeles several years ago for constructing water wells. Due to the size of the property, it can accommodate both the water well and new affordable housing; however, current state law would provide 100 percent of the RHNA number to the City of Los Angeles should Beverly Hills decide to build housing to meet our RHNA requirements.
One potential RHNA reform that should be considered is allowing neighboring cities to collaborate on the development of affordable housing, enabling city governments to leverage their individual resources in a targeted manner to address housing needs. Over the last several years, there has been interest in the state legislature to allow this to occur; however, the legislation has yet to pass out of the Assembly and/or Senate to reach Governor Gavin Newsom’s desk for signature.
Out City believes this voluntary cross-city collaboration would assist communities facing barriers to the development of affordable housing while also recognizing the contributions being made by each city to meet the housing needs of the region. If under state law there was a way for the two (or more) cities to develop a memorandum of understanding whereby what would be built at the identified property location, what financial contributions each city would make, and an executed joint agreement between the cities on how the RHNA credit is distributed amongst the involved cities, then the entire region could benefit from a multi-jurisdictional project.
DRAFT
Our City has long supported the need for regional cooperation for developing solutions for transportation, water, and homelessness issues. Our City is also supportive of a regional solution for affordable housing.
We encourage SCAG to work with the State to examine allowing two or more jurisdictions to jointly develop affordable housing projects on a mutually agreed upon site within one of the jurisdictions and allow all participating jurisdictions to gain RHNA credit from such a development. The City of Beverly Hills actively seeks sites upon which to develop affordable housing within the City. Due to the high cost of land in the City, it is often prohibitively expensive to obtain land and construct a meaningful number of affordable units. Allowing partnerships could allow jurisdictions to combine funding and develop the most mutually beneficial housing projects that will ultimately provide much needed affordable housing in the region.
In the City of Beverly Hills, 63 percent of the housing units are located in multi-family buildings. The majority of this multi-family housing is subject to rent stabilization, which helps ensure that the City maintains a wide variety of housing types for our residents. In addition, the City is entirely built out, with almost no vacant land upon which to construct new housing and has experienced very little population and employment growth over the last few decades. Due to these factors, almost any new multi-family units that are constructed would displace existing residents, most of whom are in rent controlled units.
The City of Beverly Hills believes RHNA allocation numbers should link new housing production with job production in order to ensure that existing jobs/housing imbalances are not further exacerbated. Merely locating affordable housing along high quality transit corridors does not guarantee that a person will be living closer to where they are employed, however, linking housing and jobs creation may help address this imbalance. For example, if Amazon is constructing a new warehouse that will bring thousands of jobs to the immediate area, then Amazon should provide funding to a housing trust fund to help build affordable housing. For this reason, the City asks the SCAG to work with the State to reform the Regional Determination process and asks that SCAG reform the methodology used for the distribution of RHNA to each jurisdiction in the SCAG region. There should be a stronger relationship between jobs growth and housing growth in the Regional Determination process and the SCAG methodology for RHNA distribution.
Further, there should be consideration given to the existing density of a jurisdiction and the amount of vacant and/or underutilized land within a jurisdiction when allocating RHNA.
For these reasons, we encourage SCAG and the state to consider incentivizing the construction of affordable housing, including more flexibility for local jurisdictions to work together to provide housing that counts toward RHNA requirements.
Sincerely,
Lili Bosse, Mayor
cc: City Councilmembers of the City of Beverly Hills