2021 01 25_retreat_staff_report_-_housing_element_update_dp

1. SARATOGA CITY COUNCIL
MEETING DATE: January 25, 2021
DEPARTMENT: Community Development Department
PREPARED BY: Debbie Pedro, Community Development Director
SUBJECT: Housing Element Update Kick Off
RECOMMENDED ACTION:
Accept staff report and provide direction to staff.
BACKGROUND:
Since 1969, cities and counties in California have been required to plan for future housing needs
for all income levels by including a Housing Element in their General Plan. The Housing Element
serves as a long-term blueprint for future housing development. It is one of the seven required
elements to a General Plan, which are different chapters in a General Plan that address specific
topics. State law requires Housing Elements to be updated every 8 years.
According to the California Department of Housing and Community Development (HCD), local
governments must adopt plans and regulations that provide opportunities for (and do not unduly
constrain) the private market to develop housing. Every 8 years, housing needs are assessed within
the different regions of California. After identifying regional housing needs, the total number of
housing units projected to be needed for each income level is distributed among the jurisdictions
in the region. This is called the Regional Housing Needs Allocation (RHNA) process.
Jurisdictions must then update their Housing Elements to identify policies and specific locations
for residential development to provide the opportunity to reach the jurisdiction’s RHNA allocation.
Based on growth projections from the State Department of Finance, HCD determines housing
needs within each of the 18 regions in the State. Each Council of Government for the different
regions is then responsible for divvying up the housing needs among all the jurisdictions within
that region. The Council of Government that represents the counties of Alameda, Contra Costa,
Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano, and Sonoma is the Association of
Bay Area Governments (ABAG).
In October 2019, ABAG formed an ad hoc Housing Methodology Committee comprised of local
elected officials, staff, and regional stakeholders to establish the methodology for allocating the
shares of the region’s total housing need to every local government in the Bay Area.

2. The draft housing allocation for Saratoga and other jurisdictions is expected by spring 2021 with
the final allocation being provided by winter 2021. Jurisdictions will then use their individual
RHNA allocation to update the Housing Element and plan for the projected housing needs. The
draft Housing Element will be submitted to HCD for review and certification in late 2022 and the
City has to adopt the updated Housing Element by January 2023.
Regional Housing Need Allocation (RHNA)
In June 2020, HCD provided the housing needs allocation for the Bay Area for the 2023-2031
period. The total number of new housing units needed is 441,176. This compares to 187,990 for
the prior planning period of 2015-2023 representing a 234% increase in future housing to be
planned for in the Bay Area.
The ABAG Executive Board, based on recommendations from the Housing Methodology
Committee, is scheduled to adopt the Draft RHNA Methodology on January 21, 2021. The Draft
Methodology is then submitted to HCD for review, with feedback expected by Spring 2021. The
allocation methodology is based on 5 statutory objectives identified in Government Code Section
65584(d):
1. Increase the housing supply and the mix of housing types in an equitable manner
2. Promote infill development, efficient development, and GHG reduction
3. Promote better relationship between jobs and housing, improving the balance between the
number of low-wage jobs and the number of housing units affordable to low wage workers
in each jurisdiction
4. Balance existing disproportionate concentrations of income categories
5. Affirmatively further fair housing to address disparities in housing needs, access to
opportunity, and segregated living patterns.
The table below shows the current estimated draft RHNA allocation for the City of Saratoga, as
well as the City’s RHNA allocation for the current 2015-2023 Housing Element. This allocation
for 2023-2032 is still a draft and will not be finalized until winter 2021. Jurisdictions may appeal
their draft RHNA number during the summer of 2021.
Cycle Total
Very Low
Income Low Income
Moderate
Income
Above
Moderate
2015-2023 439 147 (33%) 95 (22%) 104 (24%) 93 (21%)
2023-2031(draft) 1,712 454 (27%) 261 (15%) 278 (16%) 719 (42%)
Housing Elements must include plans to accommodate the housing units for each income level
identified in the final RHNA allocation. The income levels are based on the Area Median Income
(AMI) determined annually for each county by HCD. The 2020 AMI for Santa Clara County is
$141,600 for a four-person household. The thresholds for the different income levels for a four-
person household are listed below:
 Very Low Income (Less than 50% of AMI): <$70,800
 Low Income (50-80% of AMI): $70,800 to $113,280
 Moderate Income (80-120% of AMI): $113,280 to $169,920
 Above Moderate Income (More than 120% of AMI): >$169,920

3. Building Site Inventory
The Housing Element must include an inventory of land suitable and available for residential
development to meet each income level in the City’s RHNA. In Saratoga, the majority of the
housing stock is made up of single-family homes and town homes that fall in the above moderate
income category. In the last 6 years, the City has issued a total of 106 permits for new housing
units, 27 single-family home permits and 79 accessory dwelling unit permits. By the end of the 8
year planning cycle, it is projected that the City will have issued permits for approximately 175
housing units, far below the RHNA allocation for the current cycle which calls for a total of 439
housing units.
In preparing the Housing Element Site Inventory, the City must identify and analyze sites that are
available and suitable for development to demonstrate that there are sufficient and adequate sites
to accommodate 1,712 units of development at the respective RHNA income categories.
At the retreat, staff will hold an interactive session with the Council to discuss the anticipated
impacts and possible options to comply with RHNA.