Cotati City Council
Agenda Staff Report
Item type: REGULAR AGENDA (ACTION)
To: City Council
Subject: HOUSING ELEMENT ANNUAL PRODUCTION REPORT
(APR)
Date: March 10, 2026
Written by: Pema Sherpa, Planning Technician
Recommendation
It is recommended by the Community Development Department that the City Council review the provided information, identify any concerns or direction for staff, and direct staff to file the report with the State prior to April 1, 2026.
Background
All cities and counties in California are required to have a General Plan and among the required elements of a General Plan is the “Housing Element.” A Housing Element provides an analysis of a community's housing needs for all income levels and identifies strategies to respond to and provide for those housing needs. In 1980, the State began requiring scheduled Housing Element updates on an eight year cycle and (pursuant to Government Code Section 65400) General Law Cities are required to submit an annual report on Housing Element progress (Annual Progress Report or APR) to the Office of Planning and Research (OPR) and the Department of Housing and Community Development (HCD), outlining the progress made towards implementing the City’s Housing Element.
Specifically, the Progress Report is required to detail local efforts to implement the City’s adopted Housing Element programs throughout the past year. The Progress Report must also detail the actions taken by the local government towards completion of the other adopted Housing Element programs and the status of the local government’s compliance with any associated deadlines in its Housing Element. The APR is to be considered at a public meeting before the legislative body where members of the public shall be allowed to provide oral testimony and written comments. This report was presented to the Planning Commission on March 2, 2026 and will be presented to the City Council at the March 10, 2026 meeting, and must be submitted to HCD and OPR ahead of the April 1, 2026, deadline.
Calculating the Housing Need in Each Region
HCD is responsible for determining the regional housing needs assessment (RHNA), segmented by income levels, for each Council of Governments (COG). HCD starts with demographic population information from the Census and California Department of Finance and uses a formula to calculate a figure for each region/COG. Each COG uses its own demographic figures and growth projections to calculate what it believes the regional housing need is, gathering input from the individual communities within the COG to further refine their projections. Each COG then coordinates with HCD — considering additional factors which may not have been captured in the calculations — to arrive at a final figure. This final figure is the RHNA for the region.
Regional Housing Needs Assessment Allocation
Once HCD and the COG have agreed to the region’s assessment figure (the amount of housing that must be planned for), the COG is responsible for allocating the housing need amongst all of the jurisdictions (cities/counties) within that region. For the San Francisco Bay Area region, the COG is the Association of Bay Area Governments/Metropolitan Transportation Commission (ABAG/MTC). The COG does this in a Regional Housing Need Allocation Plan (RHNA Plan) created with input from a Housing Methodology Committee (HMC), made of elected staff representatives from individual communities, and based on individual input and statutory requirements. This methodology is then used to allocate individual communities their “share” of the regional RHNA. In a COG as diverse as the San Francisco Bay Area, it can be challenging to meet all the various needs and individual characteristics of each jurisdiction within the COG (for example Cotati is very different from Oakland, but both communities are under the ABAG/MTC COG. Both the methodology and individual RHNA allocations are ultimately approved by HCD before they are formally approved for each community within the COG. Cotati’s 6th Cycle RHNA is 234 units.
Analysis/Discussion
Updates to the 2025 APR Form
In recent years, the state legislature has made annual changes to the format and information required to be presented in the APR. Below is a summary of the legislative changes affecting the 2025 APR.
Expanded Income Categories (AB 3093)
Income categories used to classify unit affordability have been expanded by the AB 3039 to now include acutely low income (ALI) and extremely low income (ELI) as new categories.
Previously all units that were affordable to households making under 50% of AMI, would have been reported in APR as very low income (VLI), but with these new categories, any units that are affordable to households making up to 15% of area median income will be reported as acutely low income, and any units affordable to households making above 15 % AMI and up to 30% AMI will be reported as extremely low income. For this year, all ALI/ELI will count towards VLI RHNA targets.
Historic Designation (AB 2580)
Any sites or if any sites in jurisdiction have been newly designated within the reporting year on either a national, state or local register of historic places, it is now required to report these sites and their info about their historical designation in new table (Table L). This indication can also be made on Tables A & A2.
Opportunity Area Tracking (AB 2667)
Statute now requires APRs to track the opportunity area designation for each project that a jurisdiction reports. The opportunity areas come from the opportunity area mapping too, published annually by the California Tax Credit Allocation Committee and HCD. No additional work is required from jurisdiction for this report. HCD internal system tracks this data and reports it on APR dashboard and will be available by June 2026.
Enhanced Housing Element Program Reporting
Table D is updated to collect clearer data on housing element program implementation. 2025 Production Reporting
As identified, the current eight-year 6th cycle “RHNA”, runs from 2023 to 2031. The number of housing units constructed during this timeframe provides one metric for how HCD assesses a jurisdiction’s progress toward meeting the assigned RHNA numbers for that cycle. The APR (attached) provides the basis for this assessment. As identified, the City is reporting for the current eight-year RHNA cycle which began Jan. 1, 2023. This is also the basis by which HCD may exercise its’ new authority to refer jurisdictions to the State Attorney General for enforcement due to lack of progress in housing production.
The attached APR (Attachment A) is a template report required by HCD to demonstrate progress on the current housing element. As such, it includes both accounting metrics on the number of homes approved and constructed within the city, and a progress summary for each of the programs in the current housing element. Staff directs the public, Planning Commission, and City Council to Table D for more information on each of these topics. Below is a summary of the housing units by income level required to be constructed by December 31, 2031, in compliance with the City’s RHNA allocation.
From January 1, 2025 to December 31, 2025, the City has issued entitlements, building permits, and/or certificates of occupancy for approximately 232 total units as seen on the table below.
Acutely
LowExtremely LowVery Low Income
Low
Income
Moderate
Income
Above
Moderate
Income
Level:
Very Low
Income
(<50% of Area
Median Income)
Low Income
(50-80% of Area
Median Income)
Moderate
Income
(80-120% of Area
Median Income)
Above
Moderate
Income
(>120% of Area
Median Income)
Total
RHNA
Allocation:
60 34 39 101 234
income
(<15%
of Area
Median
Income)
Income
(15%-30%
Area
Median
Income)
(30%-50%
of Area
Median
Income)
(50-80%
of Area
Median
Income)
(80-120%
of Area
Median
Income)
Income
(>120% of
Area
Median
Income)
120 E Cotati
Ave
10 33 1
Redwood
Row
8 8 28 134
8154 La
Plaza
5 ADU
Construction
Completed
1 1
Building
Permit Issued
1 1 1
RHNA
Allocation
20 43 28 141
Total 232
Adding to the information specific to 2025, below is a summary of the City’s entitled residential pipeline projects, separated by income levels to identify contributions to Cotati’s sixth-cycle Regional Housing Needs Allocation (RHNA). These projections are “pipeline” projects which have been approved (blue), or projects which have been deemed “complete” and are nearing a decision point (red) but for which building permits may not have been issued. These projections do not include development projects which are early in the review process or individual homes and Accessory Dwelling Units (ADUs) that have been constructed or are under construction, which will also contribute toward the City’s RHNA compliance.
Very Low Low Moderate Market Rate
RHNA Allocation 60 34 39 101
Cotati Village 1 18 159
Cotati Village 2 13 113
Flahaven Estates 1 2 2 30
120 E. Cotati Ave 10 33 1
Redwood Row 8 8 28 134
8154 La Plaza 5
Lund Hill Lots 12
Total Projected
Pipeline Units
50 43 30 454
Cotati Affordable Housing Requirements
In accordance with Chapter 17.31 of the Cotati Municipal Code, all housing developments of 10 or more units must deed-restrict 15% of their housing units as designated affordable housing.
Developments of 9 or fewer units may pay a “Housing in-lieu” fee. Generally, affordable housing must be built with the percentages of below market rate unit types based on the City’s remaining RHNA allocations by income level. Affordable housing must be similar to the market rate units within the development, and must be distributed throughout the project, unless a housing plan has been approved by the City Council allowing the affordable units to be built elsewhere in the City, or the developer applies a “concession on incentive” allowed under state density bonus law. All affordable units are typically restricted for a minimum of 55 years.
Legislative Update Summary
Below is a summary of the changes in state housing law passed in 2025 affecting the City for the 2026 year.
AB 253 California Residential
Private Permitting Review Act: Residential Building Permits. Chapter 487, Statutes of 2025 (Urgency)This measure allows an applicant developing a residential project under 10 units to hire a third-party plan checker to review their housing plans if the local agency cannot complete the plan checking within 30 business days of receiving a completed application. This measure requires local agencies to provide the applicant with an estimated timeframe for review of the application. This measure requires the local jurisdiction to review the third-party plan check within 10 business days after receiving it back from the third-party inspector, or the application is deemed approved. Finally, beginning on April 1, 2027, local agencies are required to provide in their APR the number of residential building permits reviewed by the city, county, private professional provider, and the number of full-time staff directly involved in the processing of residential building permits.
SB 358 Mitigation Fee Act
Mitigating Vehicular Traffic Impacts. Chapter 515, Statutes of 2025 This measure requires local agencies to reduce traffic impact fees for projects located within a half mile from three or more of the following: supermarket or grocery store, public park, community center, pharmacy or drugstore, medical clinic or hospital, public library, elementary school, licensed childcare facility, or restaurant. If an agency wants to charge a higher fee, it must provide written findings supported by substantial evidence that the housing development project will not generate fewer automobile trips.
AB 507 Adaptive Reuse
Streamlining: Incentives. Chapter 493, Statutes of 2025 This measure requires local agencies, after July 1, 2026, to approve adaptive reuse projects ministerially. Additionally, this measure exempts adaptive reuse projects from all impact fees that are not reasonably related to the impacts resulting from the change of use of the site from nonresidential to residential or mixed-use. Any fees charged must be roughly proportional to the difference in impacts caused by the change of use. Finally, the measure requires specific affordability requirements depending on the type of adaptive reuse project.
AB 671 Accelerated Restaurant Building
Plan Approval: California Retail Food Code: Tenant Improvements. Chapter 470, Statutes of 2025.
This measure requires local agencies to allow applicants for tenant improvements to a restaurant to use a licensed engineer or architect to certify that the plans comply with applicable building, health, and safety codes. It sets various timelines for local building departments to review permits provided by licensed engineers or architects. The measure requires local building departments to approve or deny applications within 20 days of receiving a completed application, or it is deemed approved. Additionally, it requires local building departments to approve or deny resubmissions within 10 business days of receiving them.
AB 1308 Residential Building Permits
Inspections: Housing Accountability Act. Chapter 509, Statutes of 2025 This measure requires a local building department to inspect a residential project with fewer than 10 units within 10 business days of receiving a notice of completion for permitted work authorized by a building permit issued for a housing project. Failure by a local agency to complete the inspection within the specified timeline will constitute a violation of the Housing Accountability Act.
SB 79 Transit Oriented Development
Effective July 1, 2026, Senate Bill 79 (SB 79) makes two substantial changes to the state’s existing legal framework for housing in an effort to facilitate transit-oriented development (TOD) projects. First, SB 79 generally overrides local ordinances and deems TOD projects meeting certain criteria an allowable use of sites near major transit stations. Second, SB 79 authorizes transit agencies to develop zoning standards for agency-owned property within TOD zones. The Department of Housing and Community Development (HCD) is responsible for overseeing compliance with these new requirements.
SB 79’s other major component is the authorization of transit agencies to implement zoning standards for agency-owned land near TOD stops. These standards can govern the height, density, floor area ratio and approved retail and commercial uses of certain SB 79 projects. SB 79 projects subject to a transit agency’s standards are otherwise entitled to the same benefits as any other SB 79 project and must comply with the same SB 79 requirements. Cities can still apply their objective development criteria to these projects, but if the criteria are inconsistent with a transit agency’s standards, the transit agency’s requirements will take precedence.
AB 343 Expanded Privacy Protections for Elected Officials The PRA exempts from disclosure specified information related to elected or appointed officials.
This bill expands the definition of an “elected or appointed official” under Government Code § 7920.500 to include: retired judges or court commissioners, an active or retired judge of the State Bar Court, a retired federal judge or federal defender, a retired judge of a federally recognized Indian tribe, and a court appointee serving as children’s counsel in family or dependency proceedings.
This section protects personal information such as residential addresses and personal telephone numbers of elected or appointed officials from disclosure. The rationale for the protection of this information is that the need to protect elected or appointed officials and their families from harassment or targeted violence outweighs the interest in public disclosure of this information.
AB 130 and AB 131
Assembly Bill 130 (AB 130) and Senate Bill 131 (SB 131) were two budget trailer bills that implemented several changes intended to continue the state’s efforts to speed up the time it takes to review housing projects in the state. Notably, AB 130 established a new statutory CEQA exemption for qualifying housing development projects that are 20 acres or less in size. Projects eligible for the exemption are subject to expedited approval timelines. This new CEQA exemption works in conjunction with SB 131, which addresses housing projects that narrowly fail to qualify for a CEQA exemption due to a single disqualifying condition. In such “near miss” instances, SB 131 limits CEQA review to those environmental effects caused solely by that condition. SB 131 also waives the need for analysis of project alternatives, cumulative impacts, and growth-inducing effects.
SB 9
Senate Bill 9 (SB 9) deems any ADU ordinance that is not timely submitted or resubmitted to the California HCD for review as null and void. Local agencies are required to comply with state ADU standards until their ordinances meet applicable submission requirements.
SB 543
Senate Bill 543 (SB 543) makes numerous tweaks to various portions of state ADU law. It amends state law to specify statutory references to the allowable square footage of an ADU or JADU, referring to square footage of “interior livable space. “ It also clarifies that the square footage of interior livable space must be used to determine whether an ADU or JADU is exempt from impact fees based on its size. SB 543 also exempts ADUs or JADUs with 500 or fewer square feet of interior livable space from school impact fees.
Additionally, SB 543 now requires local agencies to review ADU and JADU applications for completeness and provide a list of incomplete items to the applicant within 15 business days of submission. Local agencies must also review any resubmitted applications for completeness within 15 business days and provide a written appeal process for any incompleteness determination or denial that results in a final written determination on the appeal within 60 business days of receiving the appeal.
AB 462
Assembly Bill 462 (AB 462) was an urgency measure that took immediate effect when signed on October 10, 2025. It requires local agencies with a Certified Local Coastal Program (LCP) to approve or deny a completed Coastal Development Permit (CDP) application for an ADU within 60 days. AB 462 also eliminated the ability to appeal a CDP decision regarding an ADU to the California Coastal Commission (CCC). If a local agency does not have a certified LCP, then it must “immediately notify” the CCC when an ADU application is submitted, and the CCC’s ensuing review of the CDP application generally requires a determination within 60 days.
AB 462 authorizes local agencies to issue a certificate of occupancy for a detached ADU before one is issued for the primary dwelling during a state of emergency. This applies when the primary dwelling is damaged or destroyed by the emergency and the ADU has received construction permits and passed all requirements.
AB 1154
Assembly Bill 1154 (AB 1154) narrowed the owner-occupancy requirements for JADUs to only apply when the JADU shares sanitation facilities with the single-family dwelling. AB 1154 also prohibits JADUs from being used as short-term rentals.
AB 920
Assembly Bill 920 (AB 920) amends the Permit Streamlining Act (PSA). It requires cities or counties with populations of 150,000 or more to establish an online centralized application portal for housing development projects that displays application status.
AB 1061 – SB 9
Assembly Bill 1061 (AB 1061) amends the by-right second-primary-dwelling-unit and urban-lotsplit statutes enacted by SB 9 (2021) to move the focus of the historic-protection exemption from broad districts to specific structures, sites, and landmarks. It authorizes cities to adopt objective historic-protection standards
Financial Considerations
Other than staff time, there are no anticipated impacts to the current fiscal year regarding the preparation and submittal of the 2025 APR to HCD.
Environmental Issues
The action of receiving the annual housing report does not constitute a project as defined by California Environmental Quality Act Guidelines Section 15378; therefore, no further environmental review is required.