In March, the Southern California Association of Governments (“SCAG”)^[1] will adopt final Regional Housing Needs Assessment (“RHNA”) allocations for cities and counties within the SCAG region.  This 6^th RHNA cycle represents the first update to these targets since the passage of key housing legislation, including Senate Bill (“SB”) 35^[2], which grants ministerial approval and streamlining of qualifying housing projects if the jurisdiction has failed to meet its RHNA targets.  Housing developers planning for potential investment can look to these production targets to assess regional and city-based needs.  Cities and counties also will update their Housing Element and other planning documents to address the need.

Key Statistics

• The California Department of Housing and Community Development (“HCD”) determined that the total housing need for the SCAG region is 1,341,827 units through 2029.

• The City and County of Los Angeles are to plan for 456,643 and 812,060 new housing units, respectively, to meet demand, with over 184,721 (City) and 340,295 (County) units to be allocated to lower-income residents.

• 52 appeals were filed with respect to 49 jurisdictions regarding the draft allocation.

• Through the month of January 2021, SCAG held 8 hearings on appeals. Two jurisdictions ultimately withdrew their appeals.^[3]

• Of the 47 remaining appeals, the RHNA Appeals Board recommended granting partial approval (i.e., partial reduction in RHNA allocation) to only two jurisdictions.

• SCAG’s RHNA Subcommittee ratified the determination of all appeal hearings and final RHNA allocation at its February 16, 2021 meeting and recommended the final allocation to the Community, Economic & Human Development (“CEHD”) Committee for additional review and recommendation.

• The Regional Council^[4] will formally adopt the final allocation at its scheduled March 4, 2021 meeting. The final RHNA plan will be transmitted to HCD after adoption.

• To track progress, local jurisdictions are required to submit annual reports to the state or risk penalties.

• The targets for each City and County within the Region can be found on the HCD website.

What is RHNA?

The RHNA is a state required process for cities and counties to update the local housing elements of their general plan.  This update is mandated by state law (California Government Code § 65584.01), requiring the local Metropolitan Planning Organization (“MPO”) to analyze and predict the housing needs for each jurisdiction within its area for an eight-year planning period.  SCAG is the MPO for the region.

The intent of quantifying the anticipated housing needs for communities within the MPO is so local governments may use these estimates to better plan for the change in both housing demand and population over the planning period, such as changes in zoning to accommodate anticipated housing and job growth.  It also provides important planning information as to allocating civil resources (police, fire, schools, parks, etc.) that would also be impacted.

What is the status of the 6th Cycle RHNA?

SCAG first adopted the RHNA methodology in March of 2020 and prepared the draft RHNA allocation for all jurisdictions within its region.  SCAG distributed the draft allocation in September of 2020 and received 52 appeals related to 49 jurisdictions contesting their allocations.  The Cities of West Hollywood and Calipatria eventually withdrew their appeals.  A total of 8 days of appeal hearings were scheduled for the month of January 2021, and SCAG completed their final appeal hearing on January 25, 2021.  Of the 47 appeals, SCAG’s RHNA Appeals Board recommended partially granting the appeal for the County of Riverside and the City of Pico Rivera, by only partially reducing their RHNA allocation.  However, the reduced allocation for these two jurisdictions were proportionally reallocated to the rest of the region, as state law does not permit SCAG to reduce the overall regional allocation as determined by HCD.^[5]   On February 16, 2021, the RHNA Subcommittee ratified the determination of all appeals and recommended the final allocation to the CEHD Committee.  At it’s February 23, 2021 meeting, the CEHD recommended adoption of the final RHNA allocation.  SCAG’s Regional Council will formally adopt the final allocation at its March 4, 2021 meeting.  The final RHNA plan will then be transmitted to HCD for final certification.

After adoption of the final RHNA allocation, all jurisdictions are required to update their Housing Element to plan for the required number of housing units outlined in the RHNA.  Housing Elements are required to be adopted by local governments and submitted to HCD no later than October 15, 2021.  Locally, the City of Los Angeles published their Notice of Preparation and Initial Study on January 13, 2021 related to the Housing Element update.  Written comments on Los Angeles’ housing update initial study were collected through February 15, 2021.  A draft of the new Housing Element is anticipated to be available in Spring 2021.  You can track status of Los Angeles’ housing element update here.

What does RHNA mean to local government and developers?

Like most planning-level documents, the RHNA does not, in and of itself, require the physical development of housing.  Instead, RHNA is intended to provide local jurisdictions with data to best plan for expected growth.  This has the practical effect of city and county planning departments updating the zoning requirements, such as density limitations and the housing element of general plans, to theoretically allow enough housing to meet its RHNA requirements.  However, cities have historically failed to meet their RHNA targets for all income groups with little to no enforcement from the state.  Critics have cited this perceived lack of proverbial “teeth” of RHNA targets in housing elements for partially contributing to California’s high cost of housing (Monkkonen, et al. 2019).^[6]  As of the reporting period in October 2020, only 31 jurisdictions were on track to meet their RHNA targets out of a statewide total of 539 jurisdictions.  With high housing costs a major local and statewide policy issue, local housing elements have received increased scrutiny and attention, including the passage of state laws intended to streamline the construction of housing.

Of these laws, SB 35 (Weiner) reigns supreme in its relation to RHNA target.  SB 35 was introduced in 2016 and passed into law in the Fall of 2017.  Beginning in 2018, jurisdictions that were not meeting their RHNA targets from the previous cycle, as demonstrated on the jurisdiction’s reporting update to the HCD, were required to approve qualifying housing projects through a ministerial process— objective and focused on assessing compliance with criteria required for streamlined projects, as well as any reasonable objective design standards that were in effect before the application was submitted.  This ministerial review process also exempts the project from environmental review under the California Environmental Quality Act (“CEQA”).

SB 35 provides developers with a powerful tool to bypass many land use controls designed to slow or limit housing production, especially with the consideration that jurisdictions across the state have historically failed to meet their RHNA targets, making the 6^th Cycle RHNA allocation of importance to local governments, residents, advocates, and developers.   When combined with other statutes that grant development incentives or otherwise streamline review of housing projects, such as the State Density Bonus law^[7], developers can receive much quicker approval of qualifying affordable housing projects, while also limiting sometimes onerous development standards to help reduce cost, speed up approval, and increase affordable housing stock in local communities.

*Reuben Duarte is a senior planner in the Real Estate, Land Use, and Environmental Practice Group in the firm’s Los Angeles office.

FOOTNOTES

[1] The Southern California Association of Governments or SCAG is the state-designated MPO for six counties (Imperial, Los Angeles, Orange, Riverside, San Bernardino and Ventura) and 191 cities.

[2] Government Code § 65913.4

[3] City of West Hollywood (Los Angeles County) and City of Calipatria (Imperial County).

[4] SCAG’s Regional Council is the governing body of SCAG and made up 86 representatives, comprised of representatives from 67 districts, each consisting of one or more cities in the region with approximately equal population and geographic continuity; one elected representative from each of the six counties within the region; and representatives of the County Transportation Commissions and tribal governments located within the region.

[5] Government Code § 65584.05(f).

[6] Monkkonen, Manville, Friedman. “A Flawed Law: Reforming California’s Housing Element”. UCLA Policy Briefs, 2019.