The next round of housing element updates will be delayed by two years for all of Southern California outside of San Diego County and for the Bay Area. The two-year postponement might be extended to all jurisdictions except San Diego, although state officials have not made that decision.

The state Department of Housing and Community Development has issued a formal letter delaying the regional housing needs allocation process (RHNA) for the Southern California Association of Governments (SCAG) region from 2006 to 2008. State officials have told representatives of the Association of Bay Area Governments (ABAG) orally that the RHNA process for the ABAG region also will be delayed two years — from 2007 to 2009 — although ABAG has not yet received formal, written notification of the postponement.
Whether the state will grant postponements to other regions is uncertain, although the possibility is under discussion. Jurisdictions covered by the San Diego Association of Governments are not eligible for postponement and were supposed to file updated housing elements by June 30, although only one of 18 cities did so.

The delays concern affordable housing advocates.

“It extends the current planning for two years, and those two years were not planned for in housing elements,” said Mike Rawson, an attorney for the California Affordable Housing Law Project. “Failure to plan for this two-year period will result in the delay of development of housing units.”

But SCAG Executive Director Mark Pisano said he doubted that the delay in his region would have significant implications “in terms of actual housing needs and production.” Said Pisano, “We know we have needs.”

The process is supposed to work this way: State demographers and planners estimate how many housing units, and for what income levels, the state will need over a period of time. They assign the needed units at various income levels to all regions of the state. Councils of government (COGs) then allocate the region’s fair share among all cities and counties in the region. The cities and counties use their fair share numbers to update their general plan housing elements. Housing elements are supposed to be updated ever five years.

The process works better on paper than in practice. The allocation of units to regions and within regions often involves difficult, and political, negotiation and even litigation. And no round of house element updates has ever lasted for only five years.

Janet Ruggiero, Citrus Heights community development director and longtime American Planning Association leader, questioned whether planning for a five-year period was the best approach. “What are we really trying to achieve? What’s the best way to do it? The five-year window may not be reasonable any more,” she said.

The SCAG delay was contemplated in legislation approved last year (AB 2158, Lowenthal), which permitted SCAG to coordinate the RHNA process with planning for the regional transportation plan update, which occurs every three years. Under the previous schedule, SCAG was supposed to make a final allocation of local shares of new housing by June 30 of this year, and updated housing elements for the 200 cities and six counties in the SCAG region were due June 30, 2006. Those deadlines have now been pushed back by two years. The transportation plan is still due in 2007.

With the postponement, jurisdictions in the nine-county ABAG region would have until June 30, 2009, to complete housing element updates.

Of course, it would have been impossible for SCAG to meet the previous schedule because state officials have not determined the region’s fair share of statewide housing need. The state has not produced the numbers because there is no money in the budget.

In fact, although SCAG leaders have talked for a while about synchronizing housing and transportation planning, money appears to be the major factor behind the RHNA delays. As part of a budget trailer bill passed in 2004 (SB 1102), state lawmakers narrowed the housing element requirement, and reinstated authority for cities, counties and councils of government to charge fees to pay for the RHNA process and housing element updates. Based on SB 1102, the Commission on State Mandates earlier this year ruled that the RHNA process and housing element updates are not reimbursable mandates — meaning that cities, counties and COGs are supposed to raise the money by levying fees on developers.

Downshifting of the state’s budget problem to lower levels of government is not politically popular at the lower levels. Plus, said ABAG spokeswoman Kathleen Cha, COGs have no ability to charge developers.

“The bottom line is there is no money for us to do the RHNA process,” Cha said.

Pisano insisted that the SCAG postponement was based primarily on the desire to coordinate housing and transportation planning. Last time, the agency received one set of population projections for housing needs and a different set of estimates for transportation planning purposes, “and that caused a conflict,” Pisano said.

Janet Huston, HCD Director of Communications and Government Affairs, said the agency recognizes SCAG’s intent. “The goal is to allow SCAG to sync up housing and transportation planning.”

“The issue of resources is also a major factor,” Pisano acknowledged, “but the state is indicating that we can look to transportation for funding.”

Some people argue that the system could shake loose funding from other sources, as well. For example, the state budget contains $5 million for HCD to grant to councils of government for regional “blueprint” planning. That money, either directly or indirectly, could pay for the RHNA process. Affordable housing attorney Rawson expressed skepticism that SCAG and ABAG could not find the money in their budgets to fund the process.

Cha, however, said that ABAG’s 2000-01 RHNA process cost about $700,000, and the next round will cost even more because of additional data and analysis requirements. “There is no funding source to do this,” she said.

Sam Mistrano, deputy director of the Southern California Association of Non-Profit Housing, was reluctant to assign blame for the delay, but he lamented it nonetheless.

“It does on the one hand make sense to have the RHNA be processed along with the transportation numbers. On the other hand, it’s hard to figure out what the cities are doing right now,” Mistrano said. “The market is such that it is producing a lot of housing that no one can afford.”

Accurate statistics regarding production of housing units for various income levels would be useful, Mistrano said. The RHNA process could help, but it is always difficult to measure actual production of affordable housing units, he said.

Interestingly, the delays for SCAG and AGAB housing element updates come at a time when housing element compliance is at an all-time high — 72% of cities have certified housing elements, according to HCD — and HCD Director Lucy Dunn is crisscrossing the state talking about the importance of planning for housing. During a recent speech to a League of California Cities conference, Dunn insisted that there is a connection running from planning for housing to plan implementation to actual housing construction. She pointed out that the 72% of jurisdictions with certified elements are producing 80% of the state’s housing units, including about 90% of the multi-family units.

Dunn, other HCD officials and some lawmakers have also talked about increasing incentives for housing production, as well as increasing penalties for failure to adopt certified housing elements and blocking housing development. Business Transportation and Housing Agency Secretary Sunne McPeak has insisted in speeches that every city must provide for its own natural population growth as well as employees of its home companies.

Although those messages have not always been popular with local government elected officials and planners, they find acceptance among affordable housing advocates and builders. Now, the RHNA delays have housing advocates asking questions.

Mike Rawson, California Affordable Housing Law Project, (510) 891-9794.
Sam Mistrano, Southern California Association of Non-Profit Housing, (213) 480-1249.
Janet Huston, California Department of Housing and Community Development, (916) 324-4477.
Mark Pisano, Southern California Association of Governments, (213) 236-1961.