The Regional Housing Needs Allocation (RHNA) Process Explained | Invest & Innovate | Steve Levy | Mountain View Online |

Local Blogs

Invest & Innovate

By Steve Levy

E-mail Steve Levy

About this blog: I grew up in Los Angeles and moved to the area in 1963 when I started graduate school at Stanford. Nancy and I were married in 1977 and we lived for nearly 30 years in the Duveneck school area. Our children went to Paly. We moved ...  (More)

View all posts from Steve Levy

The Regional Housing Needs Allocation (RHNA) Process Explained

Uploaded: Aug 14, 2019
Every 8 years the state gives each regional planning agency a housing planning target for the number of units needed and affordable at various income levels. Then the regional planning agencies develop a process to allocate the regional total to local jurisdictions.

There is a new methodology being used for the next round of regional housing allocations that will lead to much higher regional targets than in the last cycle. The new methodology is explained below after some background.

These allocations require planning for units to be developed and are not a requirement to build the units. At the local level the planning can be found in each jurisdiction’s adopted Housing Element and the city’s policies to attract housing at all income levels. The actual construction of units requires an application from a private or non-profit developer that is approved by the local jurisdiction.

I have been involved professionally in the regional allocation process for several regional planning agencies but have never been involved in the local allocation process. So this blog is about the regional allocation, not the allocation to local jurisdictions.

The regional allocation for the Bay Area will be determined in an iterative process involving the regional planning agency (now MTC), the state Department of Housing and Community Development (HCD) and the state Department of Finance (DOF). The ultimate authority rests with HCD but they and DOF want to be respectful of and try and reach agreement with the regional agency, which has the responsibility for doing growth forecasts and related regional policy development.

The new Bay Area regional allocation is probably a year away and will cover the period from 2023 through 2030. Preliminary discussions of methodology have begun between HCD, DOF, and MTC. A regional allocation has been completed for the San Diego region and is underway for the Southern California region and they give insight into what is a new HCD process.

The prior RHNA regional methodology focused on planning for housing to meet the needs resulting from regional job and population growth. The new methodology, driven in part by new laws and in part by new state policy, includes housing targets to “catch up” with housing shortfalls developed over the past decade and is oriented to helping existing residents.

The basic methodology has parts that continue and new parts. One building block is a set of projections of population by age and ethnic group. An initial set is developed by DOF and DOF and MTC will discuss these projections based on the MTC regional growth forecast.

A second building block is a set of household formation rates (household forming behavior) by age and ethnic group developed by DOF. These address behaviors such as will the current trend of young adults living with their parents continue, will we continue to see as many residents doubling up to9 save on rent, and will multi-generational living for Hispanic and Asian families continue at current levels. A third and fourth building block is an estimate of the need for units to replace units that are demolished and a requirement that the region have enough units to maintain a reasonable vacancy rate.

These are all current building blocks that will continue.

State law now requires HCD to include the number of units needed to address current overcrowding and the number of units needed so the region does not have an above average share of cost-burdened households. These new requirements are evaluated by comparing the region’s current performance relative to that in comparable regions. So how does the % of overcrowding and cost-burdened households compare to comparable regions.

The household formation rates are also being developed with a thought to “catch up” by returning to household forming behavior of a more normal time (not the highest in recent history but not the current historically low levels. For example, they will not lock in current behavior of young adults living with their parents to last to 2030 or a situation where four or five housemates need to share the rent.

The new regional allocation has been adopted in San Diego and it is significantly higher than the RHNA target for 2015-2022. The regional allocation proposed by HCD in Southern California (not adopted yet) is also significantly higher than the current RHNA target.

It is reasonable to expect the same result in the Bay Area as we not only have seen rapid growth since 2013 when the last RHNA was adopted but a high share of cost-burdened households and households that have doubled or tripled (or more) up to economize on costs.
What is democracy worth to you?
Support local journalism.

Comments

 +  Like this comment
Posted by stephen levy, a resident of University South,
on Aug 17, 2019 at 12:49 pm

stephen levy is a registered user.

I heard a presentation from HCD yesterday.

They confirmed that new regional RHNA goals will be much higher than current goals primarily as a result of the state law to reduce overcrowding and the number of households that are cost burdened--meaning spending more than 30% of income on housing costs.

They also announced that HCD has the power to prevent jurisdictions from arbitrary denial of legal projects (readers may have seen their letter to the Cupertino council re the Vallco development.

HCD is also going to be more aggressive in examining housing elements to make sure they do not include sites that are not economically viable for housing. I have
to check and see if that is for now or for when the next round of housing elements are adopted by cities.


 +  Like this comment
Posted by The Business Man, a resident of Another Mountain View Neighborhood,
on Aug 17, 2019 at 2:49 pm

The Business Man is a registered user.

post deleted.

the blog is about the new RHNA methodology fir developing housing planning targets for regions as required by state law. I may start a blog later on the causes and solutions for the current housing challenges but this is not that blog.


 +  Like this comment
Posted by The Business Man, a resident of Another Mountain View Neighborhood,
on Aug 18, 2019 at 1:47 am

The Business Man is a registered user.

SL: MOST OF THE ASSERTIONS BY TBM ARE INCORRECT. CORRECTIONS ARE IN BOLD BELOW

In response to stephen levy you said:

“They confirmed that new regional RHNA goals will be much higher than current goals primarily as a result of the state law to reduce overcrowding and the number of households that are cost burdened--meaning spending more than 30% of income on housing costs."

About time, there were serious errors in the previous methods including of all things counting jail cells as housing citizens from what I read.

SL: THE HIGHER RHNA NUMBERS REFKECT NEW STATE LAW AS STATED ABOVE, NOT A CORRECTION OF ERRORS. HOUSING UNITS DO NOT INCLUDE JAILS OR OTHER INSTITUTIONAL LIVING PLACES LIKE DORMS. THEY INCLUDE SINGLE AND MULTIPLE FAMILY DWELLING UNITS AND MOBILE HOMES

You said:

“They also announced that HCD has the power to prevent jurisdictions from arbitrary denial of legal projects (readers may have seen their letter to the Cupertino council re the Vallco development."

Let me guess, those projects included not providing enough affordable units, and the City of Cupertino has been running a shortage of affordable housing. Since the new state laws required the City to provide more housing units to be affordable, it appears that the City of Cupertino is risking a severe financial penalty for not complying with the law.

SL; CUPERTINO LIKE MOST CITIES HAVE NOT MET THEIR LOW-INCOME HOUSING GOALS. THAT IS NOT THE REASON FOR THE HCD WARNING. RATHER IT IS ABOUT THE EFFORTS IN CUPERTINO TO OVERTURN AN APPROVED HOUSING PROJECT OR DOWNZONE LAND TO REDUCE OR ELIMINATE ALLOWABLE HOUSING.

You said:

“HCD is also going to be more aggressive in examining housing elements to make sure they do not include sites that are not economically viable for housing."

Really, that doesn't necessarily ring true. That is your opinion as to what projects they “should" not establish as within the new state laws. It is not the responsibility of the State to provide any minimum profit margins and you know that. Granted, if the private sector refuses to provide housing required under the needs assessment, the state clearly now has the power to stop the private developments from being built. Then the State can begin providing funds to non-profit organizations to develop public owned housing. I would think that if this does happen, there will be greater competition in housing which up to now has been very much reduced by cooperation between the private housing suppliers.

SL: IT IS NOT MY OPINION, IT IS WHAT HCD STAFF TOLD A LARGE PUBLIC AUDIENCE ON FRIDAY. THE STATE RECOGNIZES THAT HOUSING WILL NOT BE BUILT IF IT DOES NOT PENCIL OUT FOR DEVELOPERS WHETHER MARKET RATE OR NON PROFIT. NOT VIABLE MEANS THAT THERE IS NO LIKELIHOOD THAT A DEVELOPER WOULD BUILD AT THE CURRENT ZONING.

You said:

“ I have to check and see if that is for now or for when the next round of housing elements are adopted by cities."

SL: PORTION DELETED. WE ARE NOT DEBATING HOW TO GENERATE MORE HOUSING HERE THOUGH THAT IS A GOOD TOPIC.

I AM CHECKING TO GET MORE DETAIL ON THE VIABILITY CONCEPT AS HCD INTERPRETS IT.


 +   3 people like this
Posted by george drysdale, a resident of another community,
on Aug 18, 2019 at 10:14 am

Government can plan all it wants. With wonderful ideas about how to produce "affordable housing" the private sector cannot function. There are no large sources of finances to provide for subsidized housing. Again, the baby boomer tsunami. California's needy are going to get used to harder times especially with the awful specter of global warming.

George Drysdale social studies teacher and land economist


 +  Like this comment
Posted by stephen levy, a resident of University South,
on Aug 18, 2019 at 12:03 pm

stephen levy is a registered user.

@George and TBM

Yes there is a shortage of funding for subsidized housing.

But the blog and the new RHNA methodology is about all housing. Housing elements are developed to meet all the housing goals of HCD and cities not just BMR housing.


 +  Like this comment
Posted by george drysdale, a resident of another community,
on Aug 19, 2019 at 10:25 am


post deleted

SL: George we all get that you do not like government policy re housing. You do not need to repeat it again. You have lost that battle.

The point of this blog is to let interested people know what current law and RHNA methodology is.



 +   1 person likes this
Posted by Anon, a resident of Another Palo Alto neighborhood,
on Aug 19, 2019 at 4:08 pm

@Stephen Levy:

Can you give an example calculation showing what it would have looked like for Palo Alto under the old methodology, vs, the new methodology? I'm having trouble figuring out what we can expect under the new process.


 +  Like this comment
Posted by stephen levy, a resident of University South,
on Aug 19, 2019 at 4:46 pm

stephen levy is a registered user.

@ Anon

fair question

MTC is just starting the process of determining a methodology for allocating the regional RHNA total. It will be at least a year until that is final.

So I cannot answer your question now and we do not yet have even the new regional allocation.

Based on what I know from the three other large regions, the regional target will be larger (perhaps much larger) than the current RHNA but how whether all jurisdictions get the same rate of increase is not known yet.


 +   3 people like this
Posted by Useless numbers. , a resident of Blossom Valley,
on Aug 20, 2019 at 5:52 am

My experience w RHNA numbers was that they were completely useless. A wasteful exercise by planners to justify their excessive spending of their bureaucracy. The numbers are not based on market realities, so of course most cities fail to meet their RHNA numbers. A new method based on “better “ planning will not improve the process.


 +   2 people like this
Posted by Annette, a resident of College Terrace,
on Aug 20, 2019 at 2:05 pm

Annette is a registered user.

You wrote: "These allocations require planning for units to be developed and are not a requirement to build the units. . . . The actual construction of units requires an application from a private or non-profit developer that is approved by the local jurisdiction."

Therein lies the rub. Affordable housing here doesn't pencil out for developers of either stripe (private or non-profit). I imagine that will not change absent some sort of major economic shift. Think 2008, for instance. So that leads me to ask: who funds these RHNA forecasts and what's the point of spending time and money doing them for 2023 - 2030 when we haven't come close to building enough housing to meet the 2015 - 2022 allocation? We're behind and you are essentially giving us the heads up that we should expect the outcome of the analysis by the involved agencies to tell us we are going to be even more behind. Surely that cannot come as a surprise to anyone.

Since it is the State that does these forecasts, we taxpayers must be paying for the bureaucrats to study and then state the obvious: we need more housing. Frankly, I can think of much better uses for tax revenue. Starting with funding affordable housing. Perhaps you can use your influence to get the State to nix the RHNA analysis and put the money saved to good use.


 +  Like this comment
Posted by Annette, a resident of College Terrace,
on Aug 20, 2019 at 2:09 pm

Annette is a registered user.

Please insert the word "affordable" in front of this sentence: "Housing here doesn't pencil out for developers of either stripe (private or non-profit)." Big houses with big price tags appear to pencil out just fine. And commercial space pencils out even better.


 +   1 person likes this
Posted by stephen levy, a resident of University South,
on Aug 20, 2019 at 3:16 pm

stephen levy is a registered user.

@useless numbers and Annette

The RHNA process is required by state law approved by the legislature. In addition regions must develop policies to support housing as part of their planning process again the result of state law and to be eligible for $billions in federal transportation funds (federal law().

The staffs did not create these obligations. The HCD staff (we are talking two or three people) are funded in the HCD budget approved by the state legislature. Beyond it being illegal not to do the RHNA, you are talking pocket change here in terms of funding low-income housing and surely less than the legal costs of defending lawsuits.

It is true that the RHNA allocations, particularly for housing for low-income residents will not be feasible without substantial policy and funding changes.

But that is exactly the point of the RHNA and state law regarding housing elements. Regions and local jurisdictions are asked to put in a strong effort to develop policies that will make more housing more affordable. The penalties are not for failing if there are circumstances beyond their control but for not putting in a good faith effort at developing pro-housing policies.


 +  Like this comment
Posted by The Business Man, a resident of Another Mountain View Neighborhood,
on Aug 20, 2019 at 5:31 pm

The Business Man is a registered user.

Interesting bit of news from Cupertino.

They WERE intending to not comply with SB35 regarding the Vallco Project, a mixed use land project.

But the state sent a letter describing that by doing so they were violating affordability requirements.

The new news is that Cupertino has changed its position and will comply with SB35, the key information is this:

“(B) The development is subject to a requirement mandating a minimum percentage of below market rate housing based on one of the following:

(i) The locality did not submit its latest production report to the department by the time period required by Section 65400, or that production report reflects that there were fewer units of above moderate-income housing approved than were required for the regional housing needs assessment cycle for that reporting period. In addition, if the project contains more than 10 units of housing, the project seeking approval dedicates a minimum of 10 percent of the total number of units to housing affordable to households making below 80 percent of the area median income. If the locality has adopted a local ordinance that requires that greater than 10 percent of the units be dedicated to housing affordable to households making below 80 percent of the area median income, that zoning ordinance applies.

(ii) The locality did not submit its latest production report to the department by the time period required by Section 65400, or that production report reflects that there were fewer units of housing affordable to households making below 80 percent of the area median income that were issued building permits than were required for the regional housing needs assessment cycle for that reporting period, AND THE PROJECT SEEKING APPROVAL DEDICATES 50 PERCENT OF THE TOTAL NUMBER OF UNITS TO HOUSING AFFORDABLE TO HOUSEHOLDS MAKING BELOW 80 PERCENT OF THE AREA MEDIAN INCOME, UNLESS THE LOCALITY HAS ADOPTED A LOCAL ORDINANCE THAT REQUIRES THAT GREATER THAN 50 PERCENT OF THE UNITS BE DEDICATED TO HOUSING AFFORDABLE TO HOUSEHOLDS MAKING BELOW 80 PERCENT OF THE AREA MEDIAN INCOME, IN WHICH CASE THAT ORDINANCE APPLIES."

Thus it appears that the STATE rent control is in effect. The news did say that a private group called the Friends for a Better Cupertino is going to sue to block this action. But the situation will be determined on the “legal" standing to sue. To have standing you must:

“The term standing to sue in California basically means the right to relief in court. In order for a party to have standing to sue in California they must be the “real party in interest" with respect to the claims sued upon."

What is “real party in interest"? it is:

“In California law, when a case goes up on writ of mandate (California's version of mandamus) the appellant goes first in the case caption on appeal as the petitioner, and the superior court becomes the respondent. The true opponent is then listed below those names as the "real party in interest". This is how a number of famous California cases like Burnham v. Superior Court of California (1990) ended up with such unusual names."

The Burnham case involved transient residents and the applicability of laws on them. Not at all related to this situation. It provides no applicability of “real party in interest". It goes on to say:

“When a trustee is a party to a lawsuit, the real party in interest is the beneficiary of the trust. In the United States, Rule 17 of the Federal Rules of Civil Procedure expressly provides that trustees are the real party in interest when it is necessary to sue on behalf of the estate. A beneficiary may sue under these circumstances only when the trustee refuses or neglects to bring suit."

There is no Trustees here, this is a private 501(c) group that has no ownership of the City of Cupertino or the land that the Vallco project is on. It provides no applicability of “real party in interest". It goes on to say:

“When funds belonging to a party are held on account, but not necessarily in trust, by a financial institution (e.g., a bank checking account is garnished by a third party who claims a valid unpaid debt) the bank is typically sued as nominal defendant. Of course, the real party in interest is the owner of the account, who has an absolute right to intervene and protect his assets."

Again there are no funds held in this case. It appears that this group has no “real party in interest" required to establish standing.

This lawsuit is not going to achieve anything but force the City of Cupertino to spend money on a case the plaintiff cannot win.

This SHOULD make a GREAT EXAMPLE regarding the current Google project. It would appear that this law will force affordability units as much as 50% of them to those earning up to 80% of the area median income. MOUNTAIN VIEW SHOULD BE LEARNING.


 +  Like this comment
Posted by Annette, a resident of College Terrace,
on Aug 20, 2019 at 5:34 pm

Annette is a registered user.

Steve: thanks for the further explanation; glad to hear that only pocket change is being spent on this. Unfortunately, I've come to believe that bureaucrats can justify just about anything and provide convoluted rationale that boils down to: because we said so.

Also: I was surprised to see that you fully deleted my short post correcting my initial post and inserted a change in my initial post. I had no idea that bloggers had such editing latitude but I shall certainly keep that in mind going forward.


 +  Like this comment
Posted by Stephen Levy, a resident of University South,
on Aug 20, 2019 at 6:48 pm

Hi Annette,

I thought you were asking me to make the change you wanted so I did what you asked.

Did I misunderstand what you wanted? I apologize if so.

Normally when edit, I indicate so but you wanted me to insert a word, which I did.

But I have reposted your comment nnow

Steve


 +   2 people like this
Posted by Gale Johnson, a resident of Adobe-Meadow,
on Aug 21, 2019 at 11:58 am

Gale Johnson is a registered user.

I agree with Annette...typically the cost to taxpayers to fund bureaucratic agencies never matches the results of their efforts. And most of the results turn out to be just another burden on our communities and residents in them.


 +   1 person likes this
Posted by Gale Johnson, a resident of Adobe-Meadow,
on Aug 21, 2019 at 12:31 pm

Gale Johnson is a registered user.

@SL, Thanks for attempting to explain it but it sounds like it is an evolving process, and one that leaves us still wondering/guessing for a while before we can assess the real impact of the changes to our town, Palo Alto.

"It is true that the RHNA allocations, particularly for housing for low-income residents will not be feasible without substantial policy and funding changes".

So true, and that will continue to be the case and stumbling block to ever have a chance at meeting the housing goals. What are the results, for Palo Alto, of creating housing for all the income levels based on the current requirements? I have a hunch the goals for the two lower income levels will never be met. That would have to fall into the subsidized Section 8 housing category and the funding for those projects is just not there. Developers as businesses are profit oriented, and not altruistic. Individuals within those companies, however, may give a lot.

We've polluted the term "affordable" to mean only those making $150K-$200K a year. That eliminates a lot of workers who we depend on to drive long distances every day. The 300 housing units per year goal was a pipe dream and that was bad stuff they were smoking in that pipe when they approved it. The number of new units actually built this year is paltry. The number of projects approved to build is better but still well short of the yearly goal.


 +  Like this comment
Posted by stephen levy, a resident of University South,
on Aug 21, 2019 at 12:42 pm

stephen levy is a registered user.

@Gale

Yes we do not know how the regional total will be allocated to local jurisdictions.

As to "affordable" the RHNA process uses 4 categories $0-$50,000, $50,000 to $80,000, $80,000 to $120,000. Tax credit funding is restricted to the below $80,000 groups.

The RHNA process and other state and regional initiatives (google the Partnership for the Bay Future or the Housing Trust of Silicon Valley) are working 1) to raise funding and 2) to make the approval process easier for low-income units but you are correct, it is an ongoing struggle.


 +  Like this comment
Posted by The Business Man, a resident of Another Mountain View Neighborhood,
on Aug 22, 2019 at 6:12 am

The Business Man is a registered user.


post deleted

TBM--please stay on topic which is the new RHNA methodology.



Follow this blogger.
Sign up to be notified of new posts by this blogger.

Email:

SUBMIT

Post a comment

Posting an item on Town Square is simple and requires no registration. Just complete this form and hit "submit" and your topic will appear online. Please be respectful and truthful in your postings so Town Square will continue to be a thoughtful gathering place for sharing community information and opinion. All postings are subject to our TERMS OF USE, and may be deleted if deemed inappropriate by our staff.

We prefer that you use your real name, but you may use any "member" name you wish.

Name: *

Select your neighborhood or school community: * Not sure?

Comment: *

Verification code: *
Enter the verification code exactly as shown, using capital and lowercase letters, in the multi-colored box.

*Required Fields


Stay informed

Get daily headlines sent straight to your inbox.

Su Hong Palo Alto's last day of business will be Sept. 29
By Elena Kadvany | 19 comments | 6,193 views

Premarital, Women Over 50 Do Get Married
By Chandrama Anderson | 0 comments | 1,948 views

Electric Buses: A case study
By Sherry Listgarten | 2 comments | 1,805 views

Natural Wines?
By Laura Stec | 2 comments | 1,728 views

 

THREE WEEKS TO GO!

On Friday, October 11, join us at the Palo Alto Baylands for a 5K walk, 5K run, 10K run or half marathon! All proceeds benefit local nonprofits serving children and families.

Register now