City of Sunnyvale
Agenda Item
22-0559 Agenda Date: 5/23/2022
REPORT TO PLANNING COMMISSION
SUBJECT
Forward Recommendation to City Council Related to Approval of the Draft 2023-2031 Housing Element and Submittal of the Draft to California Department of Housing and Community Development for Review
BACKGROUND
The Housing Element is part of Sunnyvale’s General Plan and identifies the policies, programs, and sites to meet the housing needs of the City’s current and future residents. California Government Code Sections 65300-65303.4 require every city and county to adopt a General Plan to guide physical development. General Plans must include certain mandatory elements, such as land use, circulation, and housing. Housing elements are the only mandatory element that must be reviewed and certified by the State on a regular basis, which occurs on an eight-year cycle. Housing elements are written and adopted by local governments but must be certified by the State’s Department of Housing and Community Development (HCD). HCD reviews and certifies that each jurisdiction’s Housing Element meets all the requirements of State law (Government Code Sections 65580- 65589.8). The City’s current Fifth Cycle Housing Element was adopted in 2015 and covers through January 30, 2023. The updated Sixth Cycle Housing Element must be certified by HCD by January 30, 2023 and will cover the planning period ending in January 2031. The City’s current timeline for the Housing Element update is shown below in Table 1 below.
Table 1: Sixth Cycle Housing Element Update Timeline
Event Date
Select Housing Element Consultant Aug 2022
Community Engagement Aug 2021 - May 2022
PC/HHSC/CC Study Sessions Dec 2021 - Jan 2022
Preparation of Draft Housing Element Aug 2021 - Apr 2022 Release of Public Draft May 6, 2022
Public Hearings for Public Draft May - June 2022
Draft Housing Element Submission to HCD Jul 2022
HCD Review Jul - Sep 2022
CEQA Review Jul - Dec 2022
Revisions to Draft Housing Element Sep - Nov 2022
Public Hearings for Adoption Dec 2022
Submit Housing Element for final HCD Certification Jan 2023
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22-0559 Agenda Date: 5/23/2022
Since August 2021, staff and the City’s consultant team have worked to prepare the Draft 2023-2031 Housing Element (Attachment 2). The Draft was prepared following a concerted public engagement process which began in August 2021 and continued through May 2022. The community engagement process has focused on soliciting public input regarding current housing needs, housing opportunities, fair housing issues, and constraints to the development of housing. Residents and stakeholders, including housing advocacy groups and housing developers, were encouraged to participate. Commission and Council input has been received through study sessions and hearings with Housing and Human Services Commission (HHSC), Planning Commission, and City Council. In addition to the public outreach meetings, staff also conducted an online community survey that was available from January 30, 2022 to March 4, 2022. The online survey was publicized on the City's website, the Housing Element Update webpage, the City’s social media, interested party lists, and to housing nonprofits. The surveys were available in English, Spanish, and Mandarin. Over 400 survey responses were received. The feedback received during the community engagement process has been incorporated in the Draft to the extent possible.
In addition, the City participates in a county-wide Planning Collaborative comprised of all cities within Santa Clara County and the County of Santa Clara. The Collaborative brings the cities together monthly to focus on housing hot topics, housing element strategy, housing legislation and various other housing and planning items. The Collaborative has taken a regional approach to assisting cities with their Housing Element updates, including county wide outreach events and surveys. The Collaborative was established in 2020 and the City’s share of consultant costs is paid for using grant funding from the Association of Bay Area Governments (ABAG).
A complete list of community engagement events through May 2022 is shown in Table 2 below.
Table 2: Community Engagement Events
Event Date
Countywide Planning Collaborative Community Meeting Aug 30, 2021 Joint Study Session to Planning Commission and HHSC Dec 13, 2021 City Council Study Session Jan 25, 2022
Online Community Survey Jan 30 - Mar 4, 2022
Focus Group: Housing for Special Needs Feb 1, 2022
Focus Group: Developer Insights into Meeting the RHNA Feb 2, 2022 Community Workshop #1 (English/Spanish) Feb 3, 2022
Presentation to Age-Friendly Advisory Committee Feb 8, 2022 Community Workshop #2 (English/Mandarin) Feb 9, 2022
City Council Study Session on Draft Housing Element May 3, 2022 Community Workshop #3 (English/Spanish/Mandarin) May 11, 2022 Planning Commission Public Hearing: Draft Housing Element May 23, 2022 HHSC Public Hearing: Draft Housing Element May 25, 2022 City Council Hearing: Draft Housing Element Jun 21, 2022 Following review and recommendations by the Housing and Human Services Commission (HHSC),
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Planning Commission and approval by the Council, this Draft will be submitted to HCD for initial review. Public comment will continue to be accepted throughout the HCD review period. Any additional public comments can be incorporated in the Draft after HCD completes their first review, which is expected in September 2022. A revised final Housing Element will be presented to the two Commissions and Council for adoption, tentatively planned for December 2022.
Cities and counties that fail to adopt a State-certified housing element may be faced with legal challenges pursuant to housing element law and/or fair housing laws. In addition, various state and regional housing, transportation, and infrastructure funding programs available to local governments require a certified housing element as one of the eligibility criteria. Historically, the City has always adopted its Housing Element and received State certification on time.
The City Council is scheduled to consider this item on June 21, 2022.
EXISTING POLICY
Council Policy 7.3.1 Legislative Management - Goals and Policies Goal 7.3A: Assess community conditions and make appropriate changes to long-range, mid-range and short-range plans.
ENVIRONMENTAL REVIEW
An Initial Study/Negative Declaration is being prepared in compliance with the California Environmental Quality Act (CEQA) and will be presented to the City Council for adoption when the final Housing Element is considered by HHSC, Planning Commission, and Council in December 2022.
DISCUSSION
Housing Element Overview
The City’s Housing Element includes several key components, which are organized into the following chapters:
1. Introduction : Overview of the City’s Housing Element and update process
2. Housing Plan : Policies and programs to address identified housing needs
3. Housing Needs Assessment : Analysis of demographic and housing trends and conditions
4. Assessment of Fair Housing : Study of the City’s plans and policies for housing with specific attention to Lower Income housing and access to jobs, good education, health services, and transportation [new chapter]
5. Sites Inventory : Identification of sites available for the development or redevelopment of housing to ensure that there is sufficient capacity to address the Regional Housing Needs Allocation (RHNA)
6. Constraints to the Development of Housing : Analysis of existing and potential governmental and nongovernmental constraints on housing development
7. Opportunities for Energy Conservation : Analysis of opportunities for energy conservation in residential development
8. Evaluation of Previous Housing Element : Assessment of progress in implementing the policies and programs of the prior housing element
One important part of the City’s Housing Element is the Regional Housing Needs assessment (RHNA). The RHNA is the target number of housing units that the City must plan for during the 2023-
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2031 planning period. The RHNA is determined based on HCD population projections for the Bay Area and is allocated to each jurisdiction in the region by the Association of Bay Area Governments (ABAG). As shown in Table 3 below, the City’s total RHNA for the 2023-2031 Housing Element cycle is 11,966 units. The total RHNA is further divided into income categories based on the area median income (AMI) and classified as Very Low, Low, Moderate, and Above Moderate Income.
The City’s 2023-2031 RHNA represents a 119% increase over the previous cycle’s RHNA of 5,452 units. Sunnyvale is not unique in experiencing a large increase for the Sixth Housing Element cycle.
Almost all jurisdictions across the state received higher RHNAs this cycle and many jurisdictions, including neighboring cities, experiencing even higher percentage increases in their RHNAs. It is important to note that the City does not need to actually build these housing units or ensure that they are built. Instead, the City’s Housing Element must provide the framework for the units to be built by putting in place the proper zoning, policies, and programs as well as addressing any constraints to the production of housing.
Table 3: 2023-2031 RHNA
Income Level 2015-2023
RHNA
2023-2031
RHNA
Percentage
Increase
Very Low Income (<50% AMI) 1,640 2,968 81%
Low Income (51-80% AMI) 906 1,709 89%
Moderate Income (81-120% AMI) 932 2,032 118%
Above Moderate Income (>120%
AMI)
1,974 5,257 166%
Total 5,452 11,966 119%
Housing Plan
The Housing Plan (Chapter 2) is based on the analysis of the existing and projected needs identified in the Housing Needs Assessment (Chapter 3) and includes the policies and programs that will address these needs. The Housing Plan incorporates community input to the extent possible. The plan includes six overarching goals and the policies and programs that will help implement them. The six housing goals are as follows:
· Goal H-1: Provision of Adequate Housing Sites (Previously Goal D): Provide adequate sites for the development of new housing through appropriate land use and zoning to address the diverse needs of Sunnyvale’s residents and workforce. · Goal H-2: Affordable Housing and Homebuyer Assistance (Previously Goal A): Assist in the provision of affordable housing to meet the diverse needs of Sunnyvale’s Lower and Moderate Income households.
· Goal H-3: Housing Conservation and Maintenance (Previously Goal B): Maintain and enhance the condition and affordability of existing housing in Sunnyvale. · Goal H-4: Removal of Governmental Constraints (Previously Goal C): Minimize the impact of governmental constraints on the maintenance, improvement and development of housing.
· Goal H-5: Equal Housing Opportunities and Special Needs (Previously Goal E): Promote
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equal housing opportunities for all residents, including Sunnyvale’s special needs populations, so that residents can reside in the housing of their choice. · Goal H-6: Neighborhood Quality (Previously Goal F): Maintain sustainable neighborhoods with quality housing, infrastructure, and open space that fosters neighborhood character and the health of residents.
To achieve these goals, many policies and programs have been preserved from the current 2015- 2023 Housing Element as the City continues to face the same type of housing challenges, with minor wordsmithing, as needed. Several new policies and programs have also been added to address the evolving housing needs of the community and to promote fair housing goals, a new and critical component of the Housing Element. Attachment 3 to this report provides a table of current and proposed Housing goals and policies contained in the Draft Housing Element. Many of these proposed policies and related action items will require further study and consideration at public hearings, funding commitments, code amendments, and/or review by Commissions and/or City Council prior to implementation.
Housing Needs Assessment
The Housing Needs Assessment (Chapter 3) is a description of the City’s population and housing stock based largely on data from the United States Census Bureau and projections from ABAG, also incorporating feedback from outreach meetings. This chapter identifies the nature and extent of housing needs in the City and includes population projections, detailed demographics, employment trends, and housing stock characteristics. A discussion of special needs populations including extremely low income households, seniors, persons with disabilities, and unhoused residents is also included.
This chapter highlights the City’s population growth, which increased from 131,844 residents in 2000 to 156,503 residents in 2020, a percentage change of 15.8%. ABAG projects that the population will continue to increase by 33% by 2040. This projected population increase is accompanied by growth in jobs from 92,305 in 2020 to 108,640 in 2040, an increase of 15% according to ABAG projections.
The chapter also highlights an increase in renter-occupied households, which are majority (55%) of households in the City according to 2019 U.S. Census data. Additional key trends include rising housing costs for renters and homeowners, an increase in homelessness, and a projected increase in the senior-aged population across Santa Clara County. The Housing Plan (Chapter 2) includes policies and programs to address these trends, including providing assistance for affordable housing development, promoting age-friendly housing and age-in-place repairs, supporting services to address homelessness, and facilitating new supportive services such as safe RV parking in the City.
Assessment of Fair Housing
The Assessment of Fair Housing (Chapter 4) is a new component for the Sixth Housing Element cycle. In 2018, the State adopted new requirements for jurisdictions to Affirmatively Further Fair Housing (AFFH) in their housing elements as part of AB 1482. While it has long been illegal for housing owners or operators to discriminate based on race or certain other categories, the AFFH rules go further and require that cities actively work to create equal housing opportunities for all residents. Since this is the first housing element cycle to incorporate the new AFFH requirements, many jurisdictions in other regions have struggled to achieve State certification due to HCD’s concerns over the lack of specific, place-based strategies to further fair housing. The City has learned from these initial experiences in other jurisdictions and is taking a proactive approach to meet
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State AFFH requirements.
This chapter includes a comprehensive geographic analysis of demographic patterns related to race, income, and special needs across the City. Statistical analyses are used to determine the levels of “segregation” and “integration” (terms used in housing law) both within the City and across the region. Other measures help determine whether access to opportunity is distributed equitably within the City. To address disparities of access to opportunity within the City, the Housing Element contains several new policies and programs, including increasing affordable housing opportunities in high resource areas, creating an Accessory Dwelling Unit (ADU) Toolkit, prioritizing capital improvements in low resource areas, and preserving Mobile Home Parks.
Sites Inventory
In order for HCD to certify the Housing Element, the City must demonstrate that it has capacity for the 11,966 units in the RHNA. The Sites Inventory (Chapter 5) identifies the specific sites that will help the City meet the RHNA. As with past housing elements, Sunnyvale remains in a better position than many California cities since the City does not have to re-zone any sites as part of this Housing Element update process. Instead, recently adopted plans such as the Downtown Specific Plan and Lawrence Station Area Plan, as well as current planning efforts such as El Camino Real Specific Plan (ECRSP) and Moffett Park Specific Plan (MPSP), will provide a majority of the sites sufficient to meet the RHNA. The remainder of the RHNA will be met through approved and proposed residential development projects in the pipeline, existing zoning capacity in the Land Use and Transportation Element (LUTE) of the General Plan, Village Centers, and the anticipated production of ADUs. Table 4 below shows how the City plans to meet the RHNA through each of the aforementioned plan areas and future projects.
Table 4: 2023-2031 Housing Capacity Summary
Lower Income Moderate
Income
Above
Moderate
Income
Total
Very Low
Income
Low
Income
2023-2031 RHNA 2,968 1,709 2,032 5,257 11,966
4,677
Planned and Approved
Projects
296 215 1,101 1,719 3,331
Lawrence Station Area Plan 532 134 221 887
Downtown Specific Plan 172 60 70 302
ECRSP 684 361 285 1,330
MPSP 4,545 0 3,034 7,580
Village Centers 0 706 0 706
Additional LUTE Sites 318 254 6 578
ADUs 8 51 85 25 170
Total Capacity 6,822 2,702 5,360 14,884
Surplus +2,145 +670 +103 +2,918
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In addition to demonstrating that the City has the capacity to meet the RHNA, it is also critical to build in a surplus in order to meet the State’s No Net Loss requirements (Government Code Section 65863). No Net Loss law requires that jurisdictions maintain adequate sites to accommodate the remaining unmet RHNA for each income category at all times throughout the housing element cycle.
The City’s surplus of 2,918 units (or 24% of the total RHNA) is considered sufficient to meet this need. City staff will track this on an annual basis through our Annual Progress Report to ensure there are always sufficient sites remaining.
Since the City has essentially no vacant land, the Sites Inventory relies heavily on non-vacant properties, which HCD reviews rigorously to determine if there is realistic development capacity during the 2023-2031 Housing Element planning period. In order to determine a site’s potential for redevelopment, the City must consider the extent to which existing uses may be an impediment to residential development and how current development trends affect the site. Because the City has historically experienced a high level of redevelopment of non-vacant sites, development trends generally support the inclusion of many non-vacant sites in the inventory. Realistic density of each site is determined by its development standards and recent development trends for comparable sites.
However, in the case of plans that are currently being updated, such as ECRSP and MPSP, these densities are based on the proposed allowable densities and have been carefully considered based on early input from HCD.
Site density also plays a critical role in determining where Lower Income housing units can be allocated. State law establishes a “default density standard” of 30 units per acre for metropolitan jurisdictions such as Sunnyvale. This is the density that is “deemed appropriate” to accommodate the City’s RHNA for Low and Very Low Income levels. Most properties in the Sites Inventory meet or exceed this default density requirement. If the City were to count the capacity on all sites that meet the default density standard as Low or Very Low Income sites, the City would not meet its Moderate and Above Moderate Income RHNA. However, it is anticipated that many of the high density sites would also provide units affordable to Moderate and Above Moderate Income households. In order to reflect this in the inventory and to meet the Moderate and Above Moderate Income RHNA, the inventory generally assumes that 60% of the capacity on higher density sites will meet the Lower Income need, 15% of the capacity will meet the Moderate Income need, and 25% of the capacity will meet the Above Moderate Income need.
Constraints to the Development of Housing
The Constraints to the Development of Housing (Chapter 6) is an identification of potential governmental and nongovernmental constraints to the development of housing. This chapter includes a discussion of potential governmental constraints such as land use controls, zoning, development requirements, permitting procedures, fees, and restrictions. Most of the City’s existing policies are not considered a substantial constraint to the development of housing, are comparable to neighboring jurisdictions, or provide additional benefits to the City, such as the inclusionary Below Market Rate program. The Housing Element does include several new proposed programs to reduce governmental constraints to housing development and to comply with new state laws, such as:
adopting objective design standards (already in process); amending the zoning code to ensure compliance with State laws regarding special needs housing; and, reviewing open space requirements and development fees in more detail to determine if they are a constraint and should be modified.
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The discussion of nongovernmental constraints to the development of housing in the City is largely concerned with high construction and land costs. The City has little ability to reduce these costs for most developments but has been effective in using Housing Mitigation Funds to help finance affordable projects and purchase land for affordable housing projects, such as the 1178 Sonora Court and Block 15 projects.
Opportunities for Energy Conservation
The Opportunities for Energy Conservation (Chapter 7) is an analysis of policies and programs that assist energy conservation in residential development. This analysis applies to energy-efficient building requirements, sustainable land use policy, and incentives for energy retrofits. This chapter largely discusses the City’s existing Climate Action Playbook, General Plan policies, Reach Codes and Green Building program. These policies and programs often exceed the State’s requirements and show concerted effort from the City to reduce greenhouse gases and promote energy efficiency in homes.
Evaluation of the Previous Housing Element
The Evaluation of the Previous Housing Element (Chapter 8) is an assessment of the City’s 2015- 2023 Housing Element. This chapter highlights the City’s accomplishments and evaluates each program contained in the previous Housing Element. Most of these programs have been retained or will be modified for inclusion in the 2023-2031 Housing Element. Only two of the programs (promotion of density bonuses and the establishment of housing policies for priority development areas) were deemed to be obsolete and removed. The chapter also includes a discussion of the City’s progress on meeting the 2015-2023 RHNA. As of December 2021, the City had permitted 4,743 out of 5,452 housing units, or 87% of the total RHNA. Although this is a promising trend for housing development in the City, the Lower Income RHNAs are not likely to be met. Given that the City’s 2023-2031 RHNA is more than double the previous cycle’s, the Housing Plan includes new policies and programs to increase housing production and create more Lower Income units.
FISCAL IMPACT
No fiscal impact is anticipated due to the recommended action; however, failure to approve a compliant housing element by the January 30, 2023 deadline could negatively impact the City by causing it to be ineligible for certain State funding programs. Failure to adopt a compliant housing element has other severe consequences including:
· Four-year update penalty (Gov. Code Section 65588(e)(4)(A)) · RHNA carries over to the next Housing Element cycle (essentially doubling next RHNA obligation) (Gov. Code Section 65584.09)
· General Plan could be found inadequate
· Vulnerable to lawsuits and fines
· Cities can lose local control of land use decisions (AB 72) · Court can suspend local control of building permits
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City's official-notice bulletin board outside City Hall, Sunnyvale Public Library and Department of Public Safety. Email notifications were
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sent to interested parties, including housing advocacy organizations and neighborhood groups. This event was also included in social media posts, on the City’s Housing Element Update webpage, and on flyers distributed throughout the City. In addition, the agenda and report are available at the Office of the City Clerk and on the City's website.
ALTERNATIVES
Recommend that the City Council:
1. Approve the Draft Housing Element as shown in Attachment 2, Authorize staff to make final modifications based on Commissioner feedback and current and future public comment, and Authorize staff to submit the Draft Housing Element to HCD for review.
2. Approve the Draft Housing Element with modifications, Authorize staff to make final modifications based on Commissioner feedback and current and future public comment, and Authorize staff to submit the Draft Housing Element to HCD for review.
RECOMMENDATION
Alternative 1: Recommend that the City Council Approve the Draft Housing Element as shown in Attachment 2, Authorize staff to make final modifications based on Commissioner feedback and current and future public comment, and Authorize staff to submit the Draft Housing Element to HCD for review.
The Draft Housing Element has been prepared to comply with current State law and follows a robust and informative community engagement process. The Sites Inventory exceeds the RHNA while carefully including only sites with realistic development capacity in order to meet the requirements of HCD. The Housing Plan responds to the identified housing needs of the City and includes policies and programs that will help make housing more affordable and improve quality of life and access to opportunity in Sunnyvale.
Prepared by: Ryan Dyson, Housing Specialist
Reviewed by: Jenny Carloni, Housing Officer
Reviewed by: Trudi Ryan, Director of Community Development Reviewed by: Teri Silva, Assistant City Manager
Approved by: Kent Steffens, City Manager
ATTACHMENTS
1. Reserved for Report to Council
2. Draft 2023-2031 Housing Element
3. Current and Proposed Housing Goals and PoliciesPage 9 of 9 Attachment 1