BACKGROUND:
In accordance with Government Code 65400, all cities are required to prepare an annual progress report (APR) on the status and implementation of the Housing Element of the General Plan using forms adopted by the California Department of Housing and Community Development (HCD).
On June 28, 2023, the City Council unanimously approved Resolution 2023-21 adopting the Housing Element Update for the 2021-2029 Planning Period. As shown below, the Southern California Association of Governments (SCAG) allocated 2,549 housing units to the City through the RHNA process for the 2021-2029 Planning Period:
Regional Housing Needs Allocation 2021-2029
Income Category Units Allocated
Extremely Low Income 270
Very Low Income (<50% AMI) 270
Low Income (50-80% of AMI) 353
Moderate Income (81-120% of AMI) 457
Above Moderate Income (>120% of AMI) 1,199
Total Units 2,549
AMI = area median income. Riverside County median income = $75,300.
The APR evaluates implementation of the 2021-2029 Housing Element programs as well as progress on housing production made during the previous calendar year (January 1, 2023, to December 31, 2023) towards meeting the RHNA. The APR is due annually by April 1. The 2023 Housing Element Annual Progress Report is included as Attachments 1-6.
Separately, under the dissolution of redevelopment, housing successor agencies have an annual reporting obligation under California Health and Safety Code Section 34176.1(f) for the expenditure of its remaining Low and Moderate Income Housing Asset Fund (LMIHAF) for the development of affordable housing. The Housing Successor Annual Report for Fiscal Year 2022-2023 is attached as Attachment 7.
DISCUSSION:
The APR tracks the production of housing units by the number of entitlements approved, as well as the number of building permits issued and completed. These entitlements and building permits include applications submitted in 2023 as well as applications submitted in previous years but not approved until 2023. In 2023 the City approved entitlements and permits for single family dwellings, multi-family dwellings, and accessory dwelling units (ADUs).
As shown in the table below, in 2023 a total of 276 units were entitled, building permits were issued for 133 units, and building permits were completed for 14 units.
Summary of Housing Entitlements and Building Permits in 2023 Units by Structure Type Entitled Permitted Completed
Single Family Attached 0 0 0
Single Family Detached 197 52 12
2 to 4 Unit Structures 0 5 0
5+ Unit Structures 0 48 0
Accessory Dwelling Units 79 28 2
Mobile/Manufactured
Homes
0 0 0
TOTAL 276 133 14
Entitlements Approved for Housing
Out of the 276 units that were entitled in 2023, 15 of the approved units are deed- restricted moderate-income units. These units were entitled collectively as part of a single development application (Desert Bloom). It should be noted for the purpose of the APR, entitlements are not counted towards the RHNA.
Building Permits Issues for Housing
While applications, building permits issued, entitlements approved, and completed units are all tracked in the APR, only issued building permits are used to track fulfillment of the RHNA. Of the 133 building permits issued in 2023:
•4.5% are assumed to be affordable for extremely low- and very low-income households (4 and 2 units, respectively).
•7.5% (10 units) are assumed to be affordable for low-income households. •7.5% (10 units) are assumed to be affordable for moderate income households. •80.5% (107 units including 2 ADUs) are assumed to be affordable for above moderate-income households.
None of the building permits issued in 2023 were subject to deed restrictions for affordability. In absence of available data regarding rent or sale price for these permitted units, all single and multi-family units were conservatively assumed to be market rate and affordable to above moderate-income households. The 26 building permits categorized as extremely low-, very low-, low- or moderate income were issued for accessory dwelling units (ADUs)
Accessory Dwelling Units
In 2023, 28 building permits were issued for ADUs. None of these units were subject to deed restrictions, and specific rent data was not available. The affordability of ADUs was instead determined proportionally, based on a study prepared by SCAG. This study made the following findings for the affordability of ADUs in San Bernardino and Riverside Counties: 15% of ADUs are affordable for extremely low-income households,
7.7% of ADUs are affordable for very low-income households, 34.8% of ADUs are affordable for low-income households, 34.8% of ADUs are affordable for moderate income households, and 7.7% of ADUs are affordable for above moderate-income households.1 These percentages were used as the basis for classifying the affordability level for the 28 building permits approved for ADUs in 2023. Based on these assumptions, the table below provides a summary of the number of building permits issued in 2023 relative to the RHNA.
Building Permits Issued 2023 by Affordability
Income Category 2023 RHNA
Extremely Low Income 4 270
Very Low Income 2 270
Low Income 10 353
Moderate Income 10 457
Above Moderate Income 107 1,199
Total Units 133 2,549
6th Cycle RHNA Progress
The 2023 APR measures progress towards the RHNA on the third year (January 1 to December 31, 2023) of the 2021-2029 planning period. The table below summarizes the total number of building permits approved over the first three years of the current planning period, for each level of affordability, relative to the number of units allocated for the 6th Cycle RHNA.
Building Permits Issued 2021-2023
6th Cycle RHNA (2021–2029)
Building Permits Issued
Income Category RHNA 2021 2022 2023 Total to
Date
RHNA
Remaining
Need
Extremely Low Income 270 - - 4 4 266
Very Low Income 270 - - 2 2 268
Low Income 353 12 13 10 35 318
Moderate Income 457 - 6 10 16 441
Above Moderate Income 1,199 46 48 107 201 998
Total Units 2,549 58 67 133 258 2,291
1 Source: SCAG Regional Accessory Dwelling Unit Affordability Analysis, https://scag.ca.gov/sites/main/files/file-
attachments/adu_affordability_analysis_120120v2.pdf?1606868527 (accessed March 2024).
Housing Element Programs
In addition to the production of housing units, the APR also reports on the progress of the 2021-2029 Housing Element programs. These programs account for specific actions intended to promote housing production. Some of these have been completed, including updates to the City’s ADU ordinance and other zoning code updates to remove barriers to the development of affordable housing. Many others, however, are still ongoing, including the development of incentives such as fee waivers, expedited processing, and the use of flexible development standards to encourage new housing. Other programs that still require development include a Housing Rehabilitation Program that provides access to low interest loans to low-income families to mitigate displacement risks. The programs also address the need for continued partnerships with outside organizations in support of housing.
LMIHAF
At the close of the Fiscal Year 2022-2023, the ending balance of the LMIHAF was $11,714,540, with only $2,678,740 liquidity. During FY 2022-2023 there were no expenditures other than maintenance monitoring and administration expenditures.
FISCAL IMPACT:
No impact.
FIVE-YEAR STRATEGIC PLAN:
GOAL F – EMBRACING, INCLUSIVE COMMUNITY
Objective: Cathedral City is valued and respected as a community that welcomes and embraces diversity, has an abundance of high quality and affordable housing options and vibrant businesses. Our neighborhoods are attractive, well-maintained, and issues surrounding homelessness have been compassionately addressed with thoughtful, coordinated, and collaborative programs.
ATTACHMENTS:
Attachment 1: HE APR 2023 – Summary Table
Attachment 2: HE APR 2023 – Table A: Housing Development Applications Submitted Attachment 3: HE APR 2023 – Table A2: Annual Building Activity Report Summary Attachment 4: HE APR 2023 – Table B: RHNA Progress
Attachment 5: HE APR 2023 – Table D: HE Program Implementation Attachment 6: HE APR 2023 – LEAP Reporting
Attachment 7: Cathedral City Housing Successor Annual Report FY 22-23