Big Problems – Big Numbers – Big Opportunities

California has been in a housing crisis for several decades.  State lawmakers have realized that local governments play a key role in the delivery of housing and in 1969, mandated that all local jurisdictions  plan for the housing needs of our residents, regardless of income.  They created what is now called Regional Housing Needs Allocation or RHNA (pronounced REE-na), with the California Department of Housing and Community Development (HCD) determining how many new homes each region of the state must build within an eight-year period.  Then the regional planning agencies (like SCAG for Southern California; SANDAG for San Diego; ABAG for the Bay Area) further allocate to their local jurisdictions the number of residential units each is required to build. 

The goals of RHNA are:

• To increase the supply and mix of housing types, improving affordability and equity.
• Promote infill development, protecting environmental and agricultural resources.
• Improve jobs-to-housing relationship balance, particularly for low-wage / affordable units.
• Balance disproportionate household income distributions
• Affirmatively further fair housing.

In the past, a city might receive their allotment, create a plan, encourage development, and … that was it.  Most cities in California never came close to meeting their obligation and there was little ramification.  This has now changed — recent allocations for 2022-2031 require huge numbers, reflecting just how dire the situation is.  For example, the City of Irvine’s allocation nearly doubled, from about 12,000 to almost 24,000; San Francisco went from 29,000 to 82,000; and the City of Costa Mesa went from two required units to over 11,000!  Marin County’s allocation increased by 21 times.  Roughly half of the new units are intended to be provided at affordable levels (very low, low, moderate) and half at market rate.

For cities to comply with the RHNA requirements, they must show there is enough land zoned for housing to accommodate the given allotment. If the city does not have enough land currently available, they must identify specific properties for rezoning and potentially up-zoning.  The rezoning must permit projects inclusive of 20 percent lower income housing to be developed ‘by-right’, a streamlined process where projects that comply with zoning standards receive approval without a discretionary review process.

Failure to meet obligations will result in penalties such as limitation on transportation funding and grants, or in worst case, the state taking over local planning.  In January, Huntington Beach settled a lawsuit with the state over “willfully refusing” to comply with affordable housing requirements.  The state has threatened lawsuits with 47 other cities and counties to enforce the law.

Cities are concerned that their allocations are unachievable, especially in older, established communities.  In the six-county Southern California region, 1.34 million new units are assigned to be constructed in an eight-year period, up from the previous 400,000 allotment.  Nearly four dozen municipal governments — mostly in Los Angeles and Orange Counties — filed appeals to reduce their allotments suggesting reallocation of units to inland counties where there is more available land.  Only two appeals were granted, on the basis that more jobs are in the urbanized coastal counties.

If there is one positive to this challenging situation, it is that there is an active focus on much needed housing.  Methods such as by-right development, reduced development costs or expedited processing may be strategies to enable this development; but truly, collaboration between public and private sectors is key to achieving the common goal of providing homes for more California residents.