A new opinion issued by the state attorney general's office regarding housing elements appears to allow cities and counties to skirt their mandated fair-share housing numbers if the local government lacks the resources sufficient to provide the units.

However, a number of people involved in the housing element process have downplayed the importance of the opinion. The Department of Housing and Community Development (HCD) called it merely a restating of existing law that does not affect the requirement that local governments plan for their fare share of housing at all income levels.

The opinion by Deputy Attorney General Gregory Gonot came in response to a request from San Luis Obispo County, where controversy over the last round of the regional housing needs assessment was particularly sharp. The county, cities and the San Luis Obispo Council of Governments (SLOCOG) were at odds with HCD over the number of housing units for which the state officials said the county and cities must plan, in part because the state-mandated figures clashed with local growth management policies (see CP&DR, July 2002). In the end, the county was willing to incorporate thousands more units of moderate and upper-end housing units into the county housing element, thus relieving the burden on the seven cities.

Growth management policies, however, were not part of the question that the attorney general chose to answer. After convincing SLOCOG to reduce four housing law inquiries down to a single question, the attorney general addressed only financial resources.

Gonot concluded: “A community [a city or county] may establish its maximum number of housing units by income category that can be constructed, rehabilitated, and conserved over the next five-year period below the number of housing units that would meet the community's goal of achieving its share of the regional housing needs established pursuant to the planning and zoning law if the community finds that its available resources in the aggregate, including but not limited to federal and state funds for its housing programs, its own local funds, tax or density credits, and other affordable housing programs, are insufficient to meet those needs.”

In a process that chafes local officials across the state, HCD determines how many housing units - and at what income level - a regional should plan for over a five-year period. Councils of government then divide those numbers of among member cities and counties, which are supposed to incorporate their assigned numbers into updated housing elements. This is all known as the regional housing needs assessment (RHNA) process.

Government Code § 66583 authorizes a city or county to determine a “quantified objective” that sets the maximum number of housing units by income category that can be provided over five years, according to Gonot. This maximum number “need to be identical to the total housing needs” that come out of the RHNA process if the local government lacks the resources to satisfy the need, Gonot writes.

“[T]he legal issue to be resolved is whether federal and state housing funds constitute part of a community's 'resources' for purposes of setting the community's quantified objectives,” the opinion states. “We believe that such funds constitute some of the resources of a community.”

The opinion continues, “We note, however, that if a lack of federal and state funds is found by a community to be one of the circumstances causing the community to set its quantified objectives below the number representing its total housing needs, the validity of such determination may be challenged in court by any interested party pursuant to the terms of Government Code § 65587. Moreover, it would not be appropriate to look solely at the unavailability of federal and state housing funds without determining whether other resources were available to meet the community's share of the regional housing needs.”

In San Luis Obispo County, the opinion states “basically what we had assumed,” said Peter Brown, a planner for SLOCOG.

Brown said SLOCOG raised the question for the AG because of concerns that the RHNA process created unfunded mandates on local governments that are unable to accommodate all of the new housing assigned by the state. The AG's opinion appears to say that there is no unfunded mandate because local governments must take into account federal, state and local resources.

Still, the opinion does recognize that there are limits to what local governments can do to provide housing, said Bill Higgins, of the League of California Cities' Institute for Local Government. Funding for affordable housing is “a huge limitation,” he said. But if a city that is updating its housing element cites funding limitations, it had better be prepared to defend itself to both HCD and a court, he added.

Janet Huston, an HCD spokeswoman, called the opinion a “reiteration of current law.”

“The law is clear that communities have to plan for these targets, but you can't force communities to construct those units,” Huston said. “There's really nothing new in this regard in the opinion.”

The opinion does spell out what resources a city or county must consider, which is helpful, she said.

Mike Rawson, an attorney for the California Affordable Housing Law Project, said that the opinion did not break new ground.

“Before the question was asked, I think everybody agreed on the answer: Your quantified objective in the housing element does not have to be equivalent to your housing need,” Rawson said. The requirement to plan for a fair share of housing units is a separate question, he said.

Rawson agreed with HCD officials that the opinion is helpful in specifying that a city or county must count all resources available - federal, state and local.

The attorney general's opinion is No. 03-104. It was published May 18, 2005 at 2005 DJDAR 5766.

Peter Brown, San Luis Obispo Council of Governments, (805) 781-4219.
Janet Huston, Department of Housing and Community Development, (916) 324-4477.
Mike Rawson, California Affordable Housing Law Project, (510) 891-9794, ext. 145.
Bill Higgins, League of California Cities, Institute for Local Government, (916) 658-8250.