STAFF REPORT TO THE CITY COUNCIL
DATE: Regular Meeting of March 25, 2025
TO: Mayor and Members of the City Council
VIA: Dante Hall, City Manager
SUBMITTED BY: Tim Rood, Community Development Director SUBJECT: 2024 Annual Housing Element Progress Report
RECOMMENDED ACTION:
Accept the report and direct staff to submit the 2024 Annual Housing Element Progress Report (Attachment 1) to the California Department of Housing and Community Development (HCD) by minute order.
BACKGROUND:
Government Code Section 65400 requires each local government to complete a Housing Element Annual Progress Report (APR) on the status and progress in implementing the jurisdiction’s Housing Element. The annual report is submitted to the Department of Housing and Community Development (HCD) and the Governor’s Office of Land Use and Climate Innovation by April 1st of each year for the prior calendar year. In the Bay Area, copies of the approved Housing Element APR report are also forwarded to the Association of Bay Area Governments (ABAG) and Contra Costa Transportation Authority (CCTA).
The report must also be reviewed by the local governing body, which can be done before or after submitting to the State. After review by the City Council, staff will submit the APR to HCD and other agencies to ensure compliance with the State deadline of April 1, 2025, for the 2024 reporting period.
HCD provides a standard template that cities complete to fulfill statutory requirements for reporting on housing information – including housing production and affordability, implementation of Housing Element programs, and local efforts to remove governmental constraints to the development of housing.
The City Council may accept the report via minute action instead of by resolution.
ANALYSIS:
The draft Hercules 2024 Annual Housing Element Progress Report (Attachment 1) provides a comprehensive overview of the City's progress within the 2023-2031 Housing Element cycle. It effectively outlines the number of new residential units constructed during the reporting period, categorizing them by income levels. This breakdown allows for a detailed examination of how well the City is meeting the diverse housing needs of its residents.
One key aspect of the report is its comparison of the new residential units to the regional housing needs allocation (RHNA) assigned to the City for the entire Housing Element period (2023-2031). This comparison offers valuable insight into whether the City is on track to meet its mandated housing targets. By assessing progress against the RHNA, city planners and stakeholders can identify areas of success and areas that may require additional focus or resources.
Furthermore, the report delves into the many new housing policies and programs mandated by the state through the Housing Element review process, providing an analysis of the progress made in achieving the goals, metrics and timelines outlined within these policies. The Council’s attention is directed in particular to Table D of the report, which discusses each of the 24 housing programs identified in the Housing Element, including the objectives, status of program administration, and targeted timeframes and metrics. Most of these programs are new to Hercules and will require considerable additional staff effort, as well as consultant assistance, to successfully administer. Staff anticipates that an appropriation for consulting services to support housing programs will be included in the draft Fiscal Year 2025-26 budget.
Overall, the draft Hercules 2024 Annual Housing Element Progress Report serves as a vital tool for monitoring and evaluating the City's efforts to address housing challenges. The report’s detailed analysis provides valuable insights that can inform future policy decisions and resource allocations to ensure continued progress towards meeting the housing needs of Hercules residents.
Summary
Table A2 in the Annual Housing Report for 2024 requires the reporting of the following for every housing unit:
When entitlements are approved;
When building permits are issued;
When certificates of occupancy are approved;
Affordability of all units in any phase of development; and, Additional information regarding other ancillary information.
Key housing information for 2024 reflected in the report includes:
Table A: A total of 172 units, including One (1) Accessory Dwelling Unit (ADU) and 171 units within the Waterfront District Master Planning area were submitted for entitlement approval during 2024. Of the 171 units, 10 are low-income deed restricted.
Table A2: These units received entitlement, building permit or certificate of occupancy, including:
Two (2) ADUs and 15 single family dwellings (Owl Ranch Subdivision), one (1) of which is Low-Income Deed Restricted, received building permits.
Table B: Progress on Regional Housing Needs Allocation (RHNA) for the 2023-2031 housing cycle:
18 above-moderate income affordable (i.e., market rate units), 309 units short of RHNA of 327 units; Zero (0) moderate-income affordable units (i.e., affordable at up to 120% of area median income), 126 units short RHNA of 126 units; One (1) low-income affordable unit (i.e., affordable at up to 80% of area median income), 197 units short of RHNA of 198 units; Zero (0) very low-income affordable units (i.e., affordable at up to 50% of area median income), 172 units short of RHNA of 172 units.
Table C: No sites identified or rezoned to accommodate additional housing.
Table D: The City made progress in implementing many objectives required by the 2023-2031 Housing Element. Key progress includes updates to the City’s website to provide project-specific checklists and webpages concerning ADUs, SB 9, SB 35, and SB 330. In addition, the City updated the Zoning Code regulations pertaining to density bonus standards, development standards, use permit findings, design review findings, residential care facilities and reasonable accommodation procedures, and adopted a Sewer Priority Policy resolution. Staff anticipates that the City's draft FY 25-26 budget will include a General Fund appropriation to bring a consultant on board to assist with implementing many of the new housing programs, including first-time homebuyer assistance, affordable housing partnerships and funding source, expansion of housing choice voucher use, developing guidelines and criteria for replacing affordable housing replacement units within development projects, fair housing assistance and outreach, and developer convenings.
Table E: No commercial development bonuses approved.
Table F: No affordable units rehabilitated, preserved, or acquired.
Table F2: No above-moderate income units converted to moderate income units.
Table G: No City-owned land sold, leased, or otherwise disposed.
Table H: No City-owned surplus lands.
Table J: No lower-income student housing.
Table K: The City adopted a local tenant prioritization provision in 2021 as part of its Affordable Housing Policy and then updated the policy in 2024, retaining the local tenant prioritization provision.
LEAP Reporting: Local Early Action Planning grant and other funding (Regional Early Action Planning (REAP)) received.
The City received a LEAP grant award in 2021 of $150,000 to apply towards the update of the Housing Element for the 6th Cycle Housing Element update (2023–2031). On June 24, 2024, the City received a 90% disbursement of the grant, totaling $135,000. The final $15,000 was received in December 2024, which successfully closed out the grant. The City was also granted and received reimbursement of $20,000 in REAP grant funding.
FISCAL IMPACT:
No direct financial impact of filing the annual housing report; however, failing to file the annual housing report can negatively impact the potential receipt of various grant and regional funds.
ATTACHMENTS:
LEAP Report
Summary
Tables A-K