2022 Housing Element
Annual Progress Report
City Council
March 21, 2023
Item 8.2
Presenters: Kristen Clements, Division Manager, Housing Ruth Cueto, Supervising Planner, PBCE
Housing Element
• Annual Progress Report required to
submit to HCD and OPR by April 1st
• Contents of Housing Element
• Housing needs assessment
• Site inventory
• Constraints
• Programs
• New reporting requirements
• Higher RHNA numbers next cycle,
planning underway
2 San José’s Housing Needs (RHNA)
Income Category
2022 HCD Income Range 2014-2022
RHNA (Units)
Annual Goal
(Units)1-person 4-person
Extremely Low
Up to 30% AMI
≤ $35,400 ≤ $50,550 4,617 525
Very Low
31%-50% AMI
$59,000 $84,250 4,616 525
Low
51%-80% AMI
$92,250 $131,750 5,428 617
Moderate
81%-120% AMI
$141,550 $202,200 6,188 703
Above Moderate $141,551+ $202,201+ 14,231 1,617
Totals 35,080 3,987
59%
of
total
3 Fifth Cycle Housing Element Highlights
• Met 62% of total housing production goals
• Met 115% of market-rate goal
• Met only 26% of affordable housing goal
• Affordable housing production achieved despite limited funding resources
• Ex. LIHTC is 14% of total statewide need
• San José exceeded local, regional, and statewide fifth cycle RHNA averages
• Completed almost all (83 of 85 items, or 98%) of the planned fifth cycle programs, policies, or activities
4 CY 2022 Residential Building Permit Performance
5 Cumulative RHNA Performance
6 Housing Market and Activity
• Rental market as of Q4 2022 - strengthening
• Rents down 3% QoQ but up 5% YoY
• Vacancies 5.5% overall (7.6% Class A but only 4.2% Class C) • For-sale market as of Q4 2022 - cooling
• Median SF price down 10% QoQ & 12% YoY
• High interest rates (6.42% 30-yr) make homes less affordable • Slight increase in building permit activity in 2022
• 1,791 units permitted (7% increase from 2021)
• 53% of permitted units in Urban Villages (up from 42% in 2021) • 449 building permits increased for ADUs (up from 421 in 2021) 7 Housing Strategies: Production
• Housing Crisis Workplan
• Final status report submitted to Council in Nov. 2022 • Transition to Housing Catalyst Team Workplan starting Jan. 2023 • Eventually integrate with 6th Cycle Housing Element Work Plan • Explore Temporary Suspension of Construction Taxes for Affordable Housing
• 100% affordable developments exempt from commercial space requirements
• Advocated (w/other local cities) for changes to CDLAC tiebreaker • Most recent NOFAs (since 2018) awarded $242M for development of 2,130 affordable homes
8 Housing Strategies: Other Updates
• Project Homekey Update
• Continue to operate existing Homekey site from first round of State funding – shelter for those vulnerable to COVID-19 • In the process of acquiring two hotels using second round of State funding
• Create Preservation loan program for developers to acquire and rehab existing apartments to create newly-affordable homes
9 2021-2022 Housing Successor Annual Report
Highlights
1. Assets of $715.9 million
2. Four required tests met
• Excess Surplus test: Loan repayments being spent timely • Senior Housing test: ≤ 50% of LMIHAF funds spent on senior affordable housing over past 10 years
• 60%-80% AMI test: ≤ 20% of the LMIHAF funds on housing affordable to 60% to 80% AMI over the past 5 years
• Extremely Low-Income test: ≥ 30% of the LMIHAF on housing affordable to ≤ 30% AMI over the past 5 years
10 Staff Recommendation
1. Accept the Calendar Year 2022 Annual and Final Progress Report on the Implementation of the San José 2014-2023
Housing Element
2. Accept the Fiscal Year 2021-2022 Housing Successor to the Redevelopment Agency Annual Report
11 Item 8.2
2022 Housing Element Annual Progress Report
Presenter: Kristen Clements, Division Manager, Housing
Ruth Cueto, Supervising Planner, PBCE
12