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Home My WebLink About01/22/2002, - RESPONSE TO DRAFT REGIONAL HOUSING NEED FOR SAN LUIS OBISPO COUNTY Luis • ? ,�,• °^n ;*'\+ rte• �1 San Luis G Obispo Cowie overnments Regional Transportation Planning Agency Arrnye acro Metropolitan Planning Organization GrMorro rro Bah Census Data Affiliate Pato Robles Service AuthorityorExpressways and Freewa s Pismo Beach fy San Luis Obispo Ronald De Carli,Executive Director San Luis Obispo County Date: January 2, 2001 CALIFORNIA DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMEN Division of Housing Policy Development 1800 Third Street, Suite 430 P. O. Box 952053 AVIV Sacramento, CA 94252-2053 Subject: Response to Draft Regional Housing Needfor San Luis Obispo County Dear Linda Wheaton, The purpose of this letter is to request a reduction in the regional housing need identified by your agency for the San Luis Obispo region from the 22,460 identified in your draft.allocation to 10,360 . housing units based upon growth trends that are probable for our county in the near future. This SLOCOG proposed number was calculated by using our projected growth increase from a population of 253,399 in 2001 to 279,299 by 2008, and dividing by the HCD determined 2.5 persons per household for the county. We believe this revised number is a more realistic target and does not. attempt to recover the deficit in housing stock that has accrued over decades during a single 7-year cycle. To do so without consideration and planning for impacts upon existing infrastructure such as roadways, water supplies, school systems and utilities, would be poor planning and contrary to other state-mandated requirements our member jurisdictions are required to meet. Furthermore, SLOCOG has reason to believe that our county is receiving an unfair and inflated number. Our position is based upon evidence from coastal counties stretching from the Bay Area to the Los Angeles Basin: County Proposed Housing July 1,2000 Ratio of Housing to Units Po ulation Population - — -- 4,764 _7668;000, _670'/0AMBAG ori r2 ` - AMBAG (Currerd HCD proposal Aug 2001) 23,130 666 000 3.50% Santa Cruz 13,318 _ 259,300 5.1% Monterey 9,812 408,700 2.4% San Luis Obispo (HCDproposap _ 22,460 249,900 9.0% Santa Barbara CAG (HCD proposal) 10,783 406,100 4.9% Ventura (Adopted) 19734 765,300 2.5% Combined (AMBAGISLOCO058CAGNentura) 85,107 2,089,300 4.1% San Luis Obispo n proposal) 22,460 249,900 9.0% WO San Luis Obispo(SLOCOG proposal) 10,360 249.900 4.1°l6 Although San Luis Obispo County has the smallest population of any coastal county, HCD is attempting to require the area to accommodate anywhere from two to nearly four times as many units per capita as any other coastal county. There is no rationale for such a burden to be placed upon San Luis Obispo County when areas with far more jobs, roads, schools, and other infrastructure are being asked to contribute significantly smaller proportions of the new units needed in the State to address the housing crisis. 1150 Osos St. Suite 202,San Luis Obispo,CA 93401 ♦ Tel.(805)781-4219 . ♦ Fax(805)781-5703 E-mail: slocog@slonet.org ♦ Internet http://www.slonet.orgl-ipslocog SLOCOG recognizes the severity of the lack of housing options in the region and the ramifications of not providing sufficient housing choices. It is one of the foremost problems faced by residents, planners, businesses attempting to attract workers, and those wishing to move into the area_ In many areas: rents are exorbitantly high; home prices are out of the range of all but the wealthiest buyers; families are dedicating up to half of their incomes to housing; and workers are forced to live farther and farther away from job opportunities. The remedy to the problem does not lie in one 7-year housing cycle and must be approached from a comprehensive set of policies and practices which take into account not only providing for an increase in the housing stock; but also improving land-use planning policies and practices; developing new job location patterns, and supporting economic growth and more effective transportation policies and systems. The Draft allocation provided by HCD seeking to accommodate 22,460 new housing units by July 2008, is overly ambitious and extremely unrealistic. The increase of 25% housing stock over the 7- year cycle would:. 1. Be inequitable in comparison with other coastal counties. 2. Create substantial harm in the arenas of congested roadways and crowded schools. 3. Worsen air and water qualities, 4. Increase demand on already limited water supplies. Compliance with the preliminary Regional Housing Needs Assessment (RHNA) numbers would force jurisdictions to violate state laws regarding the content and administration of General Plans, and compel them to adopt housing elements which cannot possibly meet statewide planning and environmental policies, CEQA guidelines, and ironically, state housing laws intended to regulate where and how governments encourage housing. Proposed Basis for a Reduction of HCD's Draft Allocation SLOCOG understands that our response is required to address the nature of the HCD projection and not focus on resource limitations. Therefore, we request HCD consider the following factors: 1. Equity: The SLOCOG region has the fewest number of jobs and population of any Central Coast county yet is being asked to absorb the single highest level of increase in housing units. This is not only unfair, but is contrary to every planning principle designed to prepare for growth in an incremental and well-designed manner. 2. Limited Economic Changes: No foreseeable and significant rapid economic or demographic changes are likely to occur in the county to precipitate an annual growth rate approaching the HCD and DOF projections. Growth rates would need to double from the past decade's 1.3% rate of growth to 2.6% and steadily remain at that level in order to realize the HCD adopted projection. Historical data does not reflect growth rates achieving let alone maintaining such high levels of activity. 3. Conflicting Economic Forecasts: The detailed population forecasts conducted annually by UCSB Economic Forecast indicates, for each of the recent years, growth rates of about 1% per year- well below the HCD and DOF projection of 2.6% annual rates for each of the next 7 years. 20- year records indicate the region has never.grown at the rate anticipated in the preliminary HCD need estimates. The UCSB Economic Forecast reports a 1.6% countywide growth rate from 2000-2001. There would have to be significant changes in job growth for the county to increase to an annual rate even approaching the 2.6% projection — a rate not supported by state or national economic forecasts. 4. Source of Data for Household Forecasts: According to the RHND for the Association of Bay Area Governments, ABAG was allowed to use its own forecast of households for the end period, not DOF projections. ABAG's forecast includes assumptions associated with demographic change, the availability of housing supply, personal income, rising housing prices and other factors. Our estimates are based upon the most current and appropriate information. 2 i 5. Inconsistent Baseline Projections: HCD used a 30-year population growth baseline to project San Luis Obispo County's ase ine for estimating population growth. ABAG, SCAG, SANDAG and SACOG did not all have 30-year baseline projections from 1970-2000. SACOG uses current housing stock and projects forward based upon input from member jurisdictions regarding persons per household data.. When jurisdictions did not provide that data, SACOG used a 10- year baseline projection based on observed growth rates. This is precisely the methodology that SLOCOG has employed and HCD has already approved the SACOG RHNP. ABAG used data for their projections with input from as far back as 25 years, but this was to project out another 25 years. After consulting with demographers from ABAG, two points are worth noting: • When projecting long-term forecasts, it makes sense to use a longer baseline data set. However, when looking at likely trends for the next 7 years, looking back 30 is not very helpful due to the dynamics of growth and change in the area - especially when the explosive growth of the mid-seventies and mid-eighties is included (a time when the differential between market rates for housing here was well below that in the LA or Bay Area markets). ABAG demographers (Brian Kirking) agree that. using a ten-year trend line is much more applicable to a 7 year projection than a 30-year trend. • In areas where the dynamics of economy and populations have been marked and noteworthy, just looking at the recent trend is not a very useful tool due to the potential for fluctuations in growth patterns. However, when an area is stable and has observed minimal fluctuations in growth rates, as San Luis Obispo County has been, it is more useful to use recent trends. 6. Observed_Growth Rates: The following table page demonstrates the difference between the most recent two decades in terms of population growth in the region. The 80's witnessed anywhere from a two to a four-fold increase in growth rates when compared to the nineties. Based upon job creation, economic stability, and opportunities for procuring housing even if many more units are constructed in an "unconstrained model", there is no evidence that growth rates will approach levels projected by DOF and HCD. �'�19801.990.u= x",1990=200Q };annual g�ovut :t annualryiiowth; DOF Estimate DOF Estimate Ave persons/yr DOF Estimate Ave persons/yr 1980 1990 2000 Arroyo Grande 11,100 14,215 2.40% 311/yr 16,426 1.56% 221/yr Atascadero 15,850 22,876 3.14% 702/yr 25,788 1.27% 292/yr Grover Beach 8,775 11,615 2.27% 284/yr 12,767 0.99%, 116/yr Morro Bay 9,050 9,379 0.51% 34/yr 9,981 0.64% 60/yr Paso Robles 9,100 18,529 7.59% 943/yr 22,922 2.37% 439/yr Pismo Beach 5,300 7,625 3.14% 233/yr 8,629 1.32% 100/yr San Luis 34,150 40,478 1.30% 633/yr 43,027 0.63% 255/yr Obispo City County Uninc. 60,775 90,116 1.30% 2,934/yr 105,651 1.72% 1,554/yr County Total 154,100 214,833 1.51% 6,306/yr -245,191 1.51% 2,802/y 3 7. Housing Element Compliance„has had no bearing on Growth Rates: HCD staff has expressed concerns that using 1990's data, as SLOCOG has, to project trends into the coming housing cycle, is flawed due to the fact that only 3 of the 8 housing elements were deemed by the State agency to be in compliance. HCD assumes that without complying with State regulations to update general plan housing and land-use elements, jurisdictions have not planned for adequate housing and therefore levels of growth have been artificially constrained due to non-compliance. This assumes that Housing Element compliance is a primary contributor to the rate of growth. Using the table above and the information below regarding which jurisdictions are in compliance, it is plain to see that no such correlation exists. For example, the cities of Paso Robles and Atascadero have been the centers of residential and population growth in the region, yet neither has a Housing Element that HCD deems "in compliance." Furthermore, Grover Beach and Morro Bay, two cities deemed "in compliance" by HCD, have experienced the lowest rates of growth of any jurisdiction in the County. HCD's current list of Housing Elements for San Luis Obispo County— (November 2001, source: http://housing.hcd.ca.gov/) City Housing Element Date Compliance ARROYO GRANDE.................DRAFT.................09/15/1994.......... OUT ATASCADERO........................ADOPTED...........11/08/1994.......... OUT GROVER BEACH....................ADOPTED...........11/02/1993.......... IN MORRO BAY...........................ADOPTED ...........07/31/1995.......... IN PASO ROBLES.......................ADOPTED ...........04/07/1995.......... OUT PISMO BEACH........................ADOPTED ...........04/13/1993.......... OUT SAN LUIS OBISPO..................ADOPTED...........02/06/1995.......... OUT SAN LUIS OBISPO CO.............ADOPTED...........09/15/1993.......... IN 8. Other Factors: In addition to the above listed rationale the following points are noted regarding projections for housing demand in the SLOCOG Region: • Some of the job growth consists of home-based occupations and self-employed workers. These jobs don't generate additional housing demand and should not be counted toward the housing need figure.. For example, San Luis Obispo City business tax records show that 6,181 business tax certificates were issued in 2000, and 7,443 issued in 2001, an increase of 1, 262 permits or 20 percent. Eight percent of this growth consists of home-based businesses. • The RHNA demand estimated for the period from January 1, 1991 to July 1, 1997 for the City of San Luis Obispo was 5,128 units, or 684 units per year. The city estimated actual need for 1994-1999, based on economic, land suitability and public services factors was 1,216 units, or 243 units per year. The actual number of units built during the period was 590 dwellings, or 118 units per year. Between 1986 and 1990 — a fairly typical period in terms of economic and development activity — the City of San Luis Obispo approved 668 new dwellings, an annual average of 134 units. Residential growth limits, in effect during this period, would have allowed many times that amount. • Between 1980 and 2001, the City of San Luis Obispo population increased from 34,252 to 44,613, an annual average increase of 493 persons. Population growth from 2001-08 will be constrained by economic and resource limitations. At an average household size of 2.27 persons per household, that would translate into a need of about 217 units per year. • The counties of Santa Cruz (13;318), Monterey (9,812), Santa Barbara (19,783) and Ventura (21,545), all coastal counties with large retirement populations have RHNA numbers well below San Luis Obispo County 22,460. All counties are significantly larger and more urbanized than SLO County with.higher overall population growth rates. Why should their housing need.figures be lower than for the SLOCOG region? 4 Thank you for your attention to this matter. We strongly believe the estimates for population and job growth — and the resultant proposed number of"needed" housing units estimated by your agency far exceeds the anticipated demand and the capability of local jurisdictions to serve such growth. It is our intention to continue working closely with our member jurisdictions in this process; however, it becomes increasingly difficult if the anticipated housing demand for the region is based upon inflated estimates of population and job growth. Without"reasonable" baseline estimates our Board and those of member agencies will be reluctant to adopt a plan that is destined to fail and would not adequately serve the public, local businesses, or the development community. Should you have any questions or concerns, please feel free to contact Peter Brown at (805) 788-2104. Sincerely, Katcho Achadjian President, San Luis Obispo Council of Governments C. SLOCOG Board State Senator Jack O'Connell Assemblyman Abel Maldonado 5