HomeMy WebLinkAbout10/01/2002, BUS 3 - THE SAN LUIS OBISPO COUNCIL OF GOVERNMENTS' (SLOCOG) DRAFT REGIONAL HOUSING NEEDS PLAN i
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FROM: John Mandeville, CommunityDevelopmentDirector-P,fh
Prepared By: Jeff Hook, Associate Plann&� �
SUBJECT: THE SAN LUIS OBISPO COUNCIL OF GOVERNMENTS' (SLOCOG)
DRAFT REGIONAL HOUSING NEEDS PLAN
CAO RECOMMENDATION:
Adopt a resolution accepting, with reservations noted, the RHNA housing allocation number for
the City of SLO and recommend that SLOCOG approve the Draft Regional Housing Needs Plan.
DISCUSSION
Background
The State of California is anticipating a significant amount of population growth over the next
ten years. While most of this statewide growth is due to growth of the existing population(births
over deaths), in-migration still accounts for most of the growth in San Luis Obispo County.
More dwellings will be needed to house this population. In addition, demographic projections
anticipate that the needs of lower income households will grow even more significant than they
are today.
Consequently, the State has established rules and a methodology for assigning responsibility for
this added housing among cities and counties. All such jurisdictions in the State are expected to
accommodate their "fair share" of this housing through updates of their General Plan housing
elements, with this region scheduled for completion by December 31, 2003. Sanctions already
exist to penalize agencies which do not have State approved housing elements. Legislation is
constantly being introduced to stiffen these sanctions and impose severe financial penalties for
"non-compliance."
At the present time, our county — like others throughout the State — is proceeding through a
process to establish housing allocations among its cities and the unincorporated areas. The
balance of this report relates to that process and the allocation presently assigned to the City of
San Luis Obispo.
Situation
On July 10, 2002 SLOCOG issued a Draft Regional Housing Needs Plan for the required 90-day
public review. The review period is nearly over and SLOCOG will hold a public hearing on
October 9, 2002 to consider comments and proposed revisions on the draft. Councilmember
Schwartz will represent the City as a member of the SLOCOG Board. Council is being asked to
provide comments, recommend changes to the proposed housing need allocations, or to endorse
the Plan as submitted. After receiving comments or proposed changes, SLOCOG has up to 60
days to "accept the proposed revision, modify its earlier determination, or indicate, based upon
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Draft Regional Housing Needs Plan
Page 2
available data and accepted planning methodology why the proposed revision is inconsistent
with the regional housing need." (Govt. Code Section 65584 (a)(C)(2)) If SLOCOG does not
accept a proposed revision, state law provides for a 30-day appeal and public hearing to
reconsider the jurisdiction's allocation.
The Regional Housing Needs Allocation Process
Under state law, the State Department of Housing and Community Development (HCD)
identifies housing needs for all regions of the state, allocates needs to regions or individual
jurisdictions, and certifies city and county housing elements as being in compliance with state
law. Councils of Governments (COG) then apportion the regional housing need among their
member jurisdictions. If they are unable or unwilling to do so, HCD has the authority to assign
housing needs to individual cities and counties.
In San Luis Obispo County, the San Luis Obispo County Council of Governments (SLOCOG) is
charged with allocating the region's assigned housing need among seven cities and the
unincorporated county areas. The numbers supplied by HCD are "goal numbers' and are not
intended as production quotas. Government Code Section 65583 states:
"It is recognized that the total housing needs identified pursuant to subdivision (a) (i.e.
through the Regional Housing Needs Allocation, or RHNA process) may exceed
available resources and the community's ability to satisfy this need within the content of
the general plan requirements outlined in Article 5. Under these circumstances, the
quantified objectives need not be identical to the total housing needs."
Jurisdictions must accommodate the RHNA numbers in their housing elements or explain why
their quantified housing objectives differ and identify actions the jurisdiction will take to remove
constraints to achieving the RHNA number. These numbers apply to the planning term from
January 2001 to July 2008. Each jurisdiction's total need is broken down by income group.
These needs are then included in each jurisdiction's housing element as residential growth
"targets" for which the jurisdiction tailors its plans, policies and standards to accomplish within
the planning term. San Luis Obispo County's overall allocation (18,035 dwellings) is not subject
to city appeal.
Over the past year, SLOCOG has worked closely with the cities and the County to develop a
formula for allocating housing needs once the regional number had been determined. SLOCOG
has approved the allocation formula, similar to a formula used by the Association of Bay Area
Governments that relies on job and population growth. Concurrently, SLOCOG attempted to
negotiate with HCD to achieve a lower regional housing need number which balanced housing
need with local growth factors, such as resource availability, infrastructure and environmental
issues.
Initially, HCD set the region's housing need at 22,460. SLOCOG subsequently appealed the
RHNA number. In response, HCD has reduced San Luis Obispo County's assigned housing
need from 22,460 to 18,892 dwellings, and from 18,892 to 18,035. SLOCOG's efforts to
achieve a further reduction to 13,982 dwellings have been unsuccessful. Further efforts to reduce
the RHNA number appear unlikely to be fruitful.
Draft Regional Housing Needs Plan
Page 3
Haw Was tire RHNA Derived?
The RHNA allocation process is precisely defined under state law, and SLOCOG has conducted
the process in accordance with the law. All jurisdictions as well as interested community groups
were invited to help develop a local allocation formula even before the state assigned a regional
housing need to San Luis Obispo County. The City's efforts to include a "development
suitability factor" in the formula were unsuccessful, primarily due to the added complexity of
applying such a factor and the lack of available information in some jurisdictions.
The approved allocation formula is based on two main factors that drive housing need:
employment and population growth, with adjustments for "fair share" and vacancies.
Employment growth is weighted slightly heavier than population to improve the jobs housing
balance. Job growth projections are from the State Economic Development Department and
reflect job growth in the greater San Luis Obispo area, including the Airport Area and Cal Poly–
not only within City limits. The fair share adjustment tries to balance the amount of very-low,
low, moderate and above moderate income housing among jurisdictions. The County of San
Luis Obispo developed the population projections based on State Department of Finance and
U.S. Census Bureau data.
Is the City's RHNA number appropriate?
According to January 2002 Department of Finance figures, the.City's population is 44,426. The
General Plan anticipates a build out population of 57,700 persons by 2017. This includes all land
within the City's Urban Reserve. At the City's current average occupancy rate of 2.265 persons
per household, an estimated 5,860 additional dwellings can be built under current General Plan
policies. The Draft Regional Housing Needs Plan establishes an overall housing need of 5,450
dwelling units for the City of San Luis Obispo through 2008. By income category, these break
down as shown in Table 1:
TABLE 1 –Regional Housing Needs Allocation, City of San Luis Obispo, 2001-2008
Incoine Group Number of Dwellings, Needed
Very Low 1,581
Low 899
Moderate 927
Above Moderate 2,043
TOTAL 59450
This allocation represents 93 percent (5,450/5,860) of the City's planned residential expansion
capacity. The General Plan anticipates this growth to occur in phases over approximately 15
years to ensure water, sewer capacity, streets, schools, parks and public services are available to
serve the new residents. Accommodating the RHNA number will require amendments to
General Plan policies—quite possibly including the City's long-standing growth target of an
average of one percent per year -- to accommodate almost as many dwellings in somewhat less
than one-half the time. Providing the necessary resources, infrastructure and services will be
expensive. The sources of funding for these improvements – especially given current fiscal
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Draft Regional Housing Needs Plan
Page 4
constraints at all government levels — are unknown. Paying for these improvements through
development exactions is likely to exacerbate the already high cost of new housing and dim
hopes of providing housing that low and moderate income households can afford. Ultimately,
accommodating the state's growth targets may hinge on state or federal financial assistance.
The City's quantified objectives may have to be less than the RHNA growth targets until the
facilities and services to support that growth can be provided. The City cannot and will not grow
at a rate that exceeds its ability to protect the health and safety of both new and existing
residents.
Accommodating Assigned Housing Needs
Can the City accommodate this number of new dwellings and still meet other community goals
and objectives and comply with other state and federal mandates? At this point, there is no way
to know. The detailed studies required for the draft Housing Element update, including an
environmental study on other related General Plan changes will help answer that question.
Environmental impact "thresholds" may need to be established to ensure that the needed
infrastructure and services keep pace with housing development. To address the imbalance, state
law allows cities and counties to limit new development for a specified period of time to preserve
and protect public health and safety until the necessary resources, infrastructure or public
services can be provided. A fiscal impact analysis will be part of the general plan amendments
needed to implement the Housing Element update. This study will help determine how new
development and new infrastructure must be coordinated to ensure that public health and safety
are protected..
Can the City Appeal its Allocation?
While serious questions remain regarding the appropriateness of the state's assigned regional
needs -- and this overall number is driving the City's relatively high local allocation -- the City's
options for resolving that dilemma are limited. The City can accept the SLOCOG numbers as
proposed or request a revision to those numbers. If the City requests a reduction in its allocation
and SLOCOG supports the reduction, the "surplus" must be reallocated to another jurisdiction —
an outcome that may further complicate or delay the process. There do not appear to be
compelling technical reasons to challenge the RHNA allocation formula or the factors used.
They are based on accepted planning methodology and reflect past trends and reasonable (albeit
pre-9/11) assumptions about local job and population growth. It is unlikely that any other
SLOCOG jurisdiction will be willing to accept part of the City's assigned share.
Where To From Here?
In correspondence with HCD (see Plan Appendices, Council Reading File), SLOCOG identified
resource growth constraints, technical problems and equity concerns with our County's assigned
housing need. Those concerns are shared by several jurisdictions in San Luis Obispo County,
and mirror similar concerns and experiences of other cities and councils of governments
throughout the state that have recently gone through the RHNA process. Fundamental concerns
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Draft Regional Housing Needs Plan
Page 5
with the regional housing needs determination process and state growth policies remain to be
addressed at the state level. In the meantime, the City's actions should be guided by three goals.
The City should:
1. Comprehensively address the critical need for affordable and market rate housing in the City
of San Luis Obispo.
2. Cooperate with SLOCOG in the allocation of regional housing needs, consistent with state
law.
3. Work cooperatively with HCD to produce a housing element that conforms with state law.
Focusing on these goals requires a fresh look at our land use plans and policies, housing
opportunities and constraints, and a new resolve to make housing a top priority, within the limits
that must be set to protect public health and safety.
Conclusion
Consequently, staff recommends the Council accept, with noted reservations, the Draft Plan with
the RHNA numbers shown in Table 1. In so doing, the City need not agree with the regional
housing need, its technical basis, equity of our RHNA numbers compared with other central
coast counties, or with the State's justification or ability to set regional housing needs.
ATTACHMENTS
1. Draft Council Resolution
2. Draft SLOCOG Staff Report and Revised RHNA numbers
3. Draft Regional Housing Needs Plan
Council Reading File: Draft Regional Housing Needs Plan Appendices
Jh/Uregionalhousingneeds/ccreport I0-1-02
3 s,
Draft Regional Housing Needs Plan Attachment 1
Page 6
RESOLUTION NO. (2002 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
RECOMMENDING ADOPTION OF THE REGIONAL HOUSING NEEDS PLAN
WHEREAS, the City Council has held a public hearing to consider the Draft Regional
Housing Needs Plan and supporting information prepared by the San Luis Obispo Council of
Governments; and
WHEREAS, the City Council recognizes the importance of meeting the City's housing
needs for all income groups and to address the urgent need for affordable workforce housing; and
WHEREAS, to help meet this need, Council desires to cooperate with the San Luis
Obispo Council of Governments by establishing an equitable and comprehensive method for
allocating housing needs among the cities and unincorporated County based on a regional
housing need number provided by the State Department of Housing and Community
Development(HCD); and
WHEREAS, despite continuing concerns with the state methodology used in establishing
the County's regional housing need, Council has determined that further negotiations or appeals
would not be productive or in the public interest at this time.
BE IT RESOLVED by the Council of the City of San Luis Obispo that based on its
deliberations and in consideration of public testimony, the staff report, and state law, the
following:
SECTION 1. Regional Housing Needs Plan. The City Council recommends that the Draft
Regional Housing Needs Plan be adopted, reflecting an assigned regional need of 18,035 housing
units.
SECTION 2. Housing Need Allocation. Council recognizes an assigned housing need of
5,450 for the City, and directs that this number shall be included in the updated Housing
Element. In so doing, Council recognizes that the total housing needs identified in the Plan may
exceed available resources and the community's ability to satisfy this need within the content of
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Draft Regional Housing Needs Plan
Page 7
Council Resolution No. (2002 Series)
Page 2
the general plan requirements outlined in state law and that under these circumstances, the
quantified objectives for housing development need not be identical to the assigned housing
needs.
SECTION 3. San Luis Obispo Council of Governments Action. The Council hereby
forwards this recommendation to the San Luis Obispo Council of Governments.
Upon motion of , seconded by ,
and on the following roll call vote:
AYES:
NOES:
ABSENT:
the foregoing resolution was adopted this day of , 2002
Mayor Allen Settle
ATTEST:
Lee Price, City Clerk
APPROVED AS TO FORM:
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Jh/Lregionalhousingneeds/ccrepon 10-1-02
3-7
CITY OF Sn(•i LUIS CO:S1P0
LUIS OBISPO COUNCIL OF GOVERNMENTS
�t ac ment 2
COMMUNIOCTOBER 9,2002
SUBJECT: Adoption of Regional Housing Allocation. ED KA FT
SUMMARY
The State's Department of Housing and Community Development (HCD) has provided their comments
regarding the Draft Regional Housing Needs Plan (RHNP). (See attached letter dated August 29, 2003).
The HCD comments indicate:
• HCD has reduced the assigned regional Housing need to 18,035 units.
• HCD does not accept the Draft Regional Housing Needs Plan (RHNP) adopted by the SLOCOG
Board in July because it does not meet the regional housing need for the SLOCOG area.
The Draft Regional Housing Needs Plan is currently at the end of 90-day comment period provided for
under state law. The public hearing to consider comments/amendments to the plan is scheduled for
today's meeting. But before that occurs, SLOCOG board will need to consider adoption of the RHNP.
During the public hearing, state law (section 65584) indicates that SLOCOG with either"accept, modify
or reject" proposals and comments from member agencies. A 30-day appeal period then follows the
October meeting, allowing member jurisdictions to challenge the methodology of the plan itself and/or
the allocation of their respective assigned share of the regional housing need.
At the September 4t' meeting, the Board unanimously agreed to delay decision on the newly reduced
HCD-assigned numbers to October 9t' (today's meeting). This was to allow each member jurisdiction
more time to review the implications and consult with their council, staff and legal counsel.
RECOMMENDATION
Staff: A) Revise the RHNP to allocate the 18,035 Units as shown on the attached Table A.
DISCUSSION
Incorporating HCD's reduced allocation of 18,035 units into the Draft Regional Housing Needs Plan and
notifying member agencies-of this change will allow staff, as well as the appointed and elected officials of
these agencies an opportunity to:
• Evaluate the potential impacts of this newly assigned regional housing allocation.
• Evaluate the resulting local allocation based upon the approved formula; and
• Provide more focused comments on the Draft RHNP.
Following recent discussions with HCD it is apparent that further reductions in the regional allocation will
not be forthcoming and the assignment of 18.035 units to the region is the forecast that we will need to
work with.
Proceeding with a RHNP that does not recognize this regional allocation will ieopardize the ability of all
iurisdictions within the county to meet the requirements of state law for the adoption of their Housing
Element, could expose SLOCOG to potential legal action for not meeting the legal-requirements-ofthe
state statutes, and could also expose member agencies to legal challenge as well SLOCOG does not
have funding set aside for a legal challenge of this issue.
ATTACHMENT 2
The Board has only two options: 'Reject' or "Accept" the newly assigned HCD regional allocation. Results and
implications of these options are discussed below.
Option 1: Refect the HCD-assigned numbers
• Result:
1) The San Luis Obispo County/Region will not have an acceptable Regional Housing Needs Plan (RHNP).
2) Each member jurisdiction will not have a Housing Element that is in compliance with State law. HCD
cannot review and certify for compliance.
• Implications:
1) Ineligibility for State/HCD grants.
• Those funds are linked to housing compliance (i.e., non-entitlement Community Development Block
Grant(CDBG) [meaning Pismo Beach and Morro Bay], Help programs and Home Funds).
• Proposition 46-$100 million for local governments for any purpose.
2) Lower Priority for State Funding.
Le.:
• California Housing Finance Agency Health Program grants.
• Technology,Trade and Commerce Agency(TTCA) Infrastructure grants.
3) Potential Reimbursement to the State for Senate Bill 90 (SB 90) Claim used to prepare the RHNP
($55K).
• Implication: Requires allocation from member jurisdictions (all SLOCOG funds are dedicated for
transportation).
4) High Litigation Exposure (with poor likelihood of success).
a) Potential litigants:
• SLOCOG member jurisdictions (as they would not be able to have their respective Housing
Elements certified).
• Builders.
• Housing Advocates.
b) Implications of Litigation:
1) Litigation-Costs.
a. Needs to establish a Litigation Fund -$250K to$500K.
• Requires contributions from member jurisdictions (all SLOCOG funds are dedicated for
transportation).
• Requires"agreed upon"contribution formula: per capita, per dwelling unit,equal split.
• What happens if one or more member agencies refuse to pay?
b. Cost of Damages-$ unknown.
• Requires contributions from member jurisdictions (all SLOCOG funds are dedicated for
transportation). -
2) Building Moratorium.
• Folsom.
• Pasadena.
Option 2: Accept the HCD-assigned numbers
Recommended Action:
1) Adopt Revised Regional Housing Needs Plan.
2) Consider Appeals and Allocation Shifts.
H:12002.2003 Overall Worts ProWamr0100 Agency Program OovMW-Board-CorrrtYttee StrppwrCOG Bwrd fendas 2002 200310ctober 20021ReplWal Hawing Needs Plan Staff Report.doc
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Attachment 3
San Luis Obispo Council of Governments
Draft
Regional Housing Needs Plan
July 2002
1150Osos St. Suite 202, San Luis Obispo,CA 93401 ♦ Tel.(805)781-4219 ♦ Fax(805)781-5703
E-mail: slocog@slonet.org ♦ Internet http://www.sionet.org/—ipslocog
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ATTACHMENT 3
SAN LUIS OBISPO COUNCIL OF GOVERNMENTS
SLOCOG BOARD (July. 2002)
President...........................................................David Elliot, City of Morro Bay Councilmember
Vice President...............................Supervisor Peg Pinard, San Luis Obispo County, District 3
City of Arroyo Grande..................................................................Tony Ferrara, Councilmember
Cityof Atascadero....................................................................................Mike Arrambide, Mayor
City of Grover Beach.....................................................................Dave Ekbom, Councilmember
City of Paso Robles....................................................................................Frank Mecham, Mayor
Cityof Pismo Beach .......................................................................................Rudy Natoli, Mayor
City of San Luis Obispo..............................................................Ken Schwartz, Councilmember
San Luis Obispo County, District 1 .........................................................Supervisor Harry Ovitt
San Luis Obispo County, District 2..................................................Supervisor Shirley Bianchi
San Luis Obispo County, District 4..............................................Supervisor Katcho Achadjian
San Luis Obispo County, District 5..........................................................Supervisor Mike Ryan
Project Staff
ExecutiveDirector..................................................................................................Ronald DeCarli
DeputyDirector.................................................................................................Steve Devencenzi
AssociatePlanner...................................................................................................... Peter Brown
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ATTACHMENT 3
Table of Contents
Regional Housing Need Plan
ExecutiveSummary.........................................................................................................................3
SLOCOG Principles for Developing Housing Policy............................... 4
Introduction ................................................................................................... 5
Schedule.........................................................................................................................................9
Geography .................................................................. 10
......................................I...................
Estimation of Regional Housing Needs............................................................................................ 11
StateAllocation Criteria................................................................................................................... 12
Appeals Criteria and Process............................................................. .....14
........................................
Policy for RHNP upon Annexation or Incorporation ......................................................................... 15
Methodsof Allocation......................................................................................................................16
.
Allocation Tables, Jurisdictional Breakdowns .................................................................................. 19
Appendices
A-Original Regional Housing Needs ................................................................................................2
B- SLOCOG-HCD Correspondences...............................................................................................3
B-1- SLOCOG letter requesting reduction................................................. ....3
B-2- HCD response and attachments...................................................................................8
B-3- SLOCOG 2"d letter requesting further reduction ...........................................................28
B-4- HCD response..............................................................................................................32
C- HCD Allocation Methodology......................................................................................................36
D- State Law Governing Housing Elements and Regional Housing Needs......................................44
E- 1987 Attorney General Opinion 87-206.......................................................................................54
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ATTACHMENT 3
EXECUTIVE SUMMARY
The Regional Housing Needs Plan (RHNP) prepared by San Luis Obispo Council of Governments
(SLOCOG) establishes numerical targets for the development of housing units in the state-mandated
Housing Element update that each of the seven incorporated cities and the County of San Luis Obispo are
to accomplish during 2003. HCD has established regional housing needs allocation of 18,892 for the
SLOCOG region. The law requires that SLOCOG address housing needs in the county through the RHNP
which is designed to meet guidelines set forth by the California State Department of Housing and
Community Development (HCD) in compliance with State housing law (Government Code Sections 65583
and 65584). A final version of this plan requires approval by SLOCOG Board and must be submitted to
HCD by December 31, 2002.
SLOCOG recognizes the importance of creating more housing opportunities for area residents, especially
those at the lower end of the income-eaming spectrum. The area's housing market has witnessed
unprecedented increases in home sale prices and rental rates. Income earnings have not risen at near
these rates and strong job growth and immigration have provided added complexities. The County is
faced with serious concerns in terms of maintaining the vibrant economy and valued labor force, while
protecting natural resources, environmentally sensitive areas, premium agricultural lands, open spaces
and at the same time limiting traffic congestion and protecting and improving air quality. Cities and the
County are faced with creating ways to foster housing development without overloading infrastructure and
the ability to provide services. Doing so may be the greatest challenge to the region in the next decade if
we are to maintain and seek to improve the quality-of-life and the area's environment..
In attempting to address the need for affordable housing, SLOCOG has worked closely with a housing
advisory committee, local housing advocates, city and county planners, environmental groups, Local
Agency Formation Commission (LAFCO), and HCD in an effort to gain needed input for the following plan.
The key component of the plan is a series of tables that enumerate housing unit allocations by income
categories to SLOCOG member agencies. These tables can be found on page 6 of the RHNP. The seven
incorporated cities and the County are required to integrate the Housing Unit Distribution numbers
identified in the RHNP in the update the Housing Elements of their General Plan in order to accommodate
their "fair share" of the anticipated future housing demand. This effort will challenge many of these
communities as they seek to respect prior planning efforts, resource and regulatory constraints and
potential local opposition to increased densities, rezoning proposals, and/or expansion of existing
community boundaries.
The RHNP is intended to assure that adequate sites and zoning exist to address anticipated housing
demand during the planning period. The targets also help to ensure that the availability of sites exists to
accommodate the. housing need of a range of socioeconomic segments of a community. The housing
allocations are the basis for assuring that adequate sites and zoning are available to accommodate at least
the number of units allocated. They are not housing unit quotas that jurisdictions must achieve within the
time frame of their next housing element update. One of the few tools available to local jurisdictions to
influence the development of affordable housing is the power to regulate land use. Breaking down
development barriers, such as exclusively low-density zoning and exclusionary growth controls is a major
goal of state housing law.
Also included in the RHNP is background information to the planning process; a schedule of
implementation; state law guiding the process; and, a detailed account of the correspondences between
HCD and SLOCOG as SLOCOG attempted to negotiate with HCD in order to achieve a regional allocation
suitable to the area.
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ATTACHMENT 3
SLOCOG Principles for Developing Housing Policy
Jobs/Housing Balance
People should have a reasonable opportunity to live close to where they work and each urban area
should strive to achieve a better balance between housing and jobs; projects that are appropriately sited
and seek to improve that balance should be encouraged through redesigned and efficient planning and
development processes.
Permit Streamlining
Local, state and federal agencies should eliminate redundant policies and practices that are found to be
obstacles to the production of appropriately located affordable housing, consistent with sound infill
development opportunities and environmentally sensitive areas.
Mixed-Use Development
Support appropriately located mixed-use projects that encourage efficient transportation services and
walkable communities.
Urban Limits
Urban areas should be efficiently developed within their respective boundaries. Support should be
provided to agencies for the redevelopment of underutilized areas that can provide additional housing or
employment opportunities that minimize the demands placed upon outlying agricultural or open space
areas.
Wildlife/Environmental Sensitivity
Preserve and restore natural areas and open spaces in conjunction with efforts to provide appropriate
housing and economic development in a manner that respects significant wildlife habitat, conserves
land and preserves natural resources.
Social Equity: Housing for All Incomes and Age Levels
The long-term health of our economy and quality of life depends on maintaining a diverse population
composed of a balance of income and age groups. A mixed housing stock addressing the range of
housing options within communities provides the opportunity for diversity of age, lifestyle and incomes
for residents.
Higher Density/Multi-Family Design
Good design is critical to community acceptance of higher density projects. Provide support for the
development of design guidelines that presents attractive higher density affordable housing, which
promotes responsible, efficient, and compact development to facilitate the preservation of open space.
Financing Mechanisms
Support the Affordable Housing Trust Fund as a vehicle to secure needed funds to assist in developing
housing and to qualify for state matching funds. Affordable or workforce housing receiving public
subsidies should be subject to restrictions that keep the housing affordable for an extended period of
time or return some portion of the incremental gain in value for reinvestment in additional housing
opportunities.
Regional Cooperation
Agencies (federal, state and local) should work cooperatively to address the housing and development
needs of the community as a whole in a manner that recognizes the common needs of the populace
and the impacts to the environment.
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ATTACHMENT 3
INTRODUCTION
A. Background
The Regional Housing Needs Plan (RHNP) is a required part of a statewide process intended to address
housing issues related to future growth. The RHNP is the document that identifies the allocation to cities
and counties of their "fair share" of the region's current unmet needs as well as future projected housing
needs by household income group. The RHNP identifies and quantifies both existing and anticipated
housing needs for each jurisdiction over the seven and a half-year period between January 2001 and July
2008. After the San Luis Obispo Council of Governments (SLOCOG) adopts the document each
jurisdiction is then required to update the Housing Element component of their General Plan to address
how and where they will attempt to meet that need by December 31, 2003. The RHNP is subject to
approval by the State Department of Housing and Community Development (HCD) and is detailed under
the California Government Code, Section 65584 (See Appendix D).
The RHNP recognizes the need to address the impacts of job-driven population growth and demographic.
change on a region's housing supply. These impacts affect home prices, choices, availability, affordability,
and maintenance level of the housing stock. The needs assessment process sets numeric "targets" that
take into account housing demand and social goals, while complying with state housing law. The State
Department of Housing and Community Development (HCD) provides a minimum baseline need to San
Luis Obispo Council of Governments (SLOCOG), which in cooperation with local governments and public
input allocates the countywide housing need to local jurisdictions. The seven incorporated cities and the
unincorporated county are then required to plan for, through updates of general plan housing and land-use
elements, their SLOCOG determined share of the HCD allocation to the region. HCD methodology for
calculating regional housing needs can be found in Appendix C.
The core of the RHNP is a series of tables which indicate, for each jurisdiction, the distribution of housing
needs for each of four household income groups to be planned for by the ending date of the plan. These
units are considered the basic new construction need to be addressed by individual city and county
housing elements. Table 1 Housing Unit Distribution—By Income Category on page 5 of this plan lists the
numbers for each jurisdiction.
B. Plan Intent
In addition to addressing local housing needs, the county and every city in the region has an obligation to
address the housing needs of the entire region. Given the expansion of jobs into suburban areas, two-
career households, changing or intensifying commute patterns, and the interdependent economy and
society of the region, the housing needs of the region affects every community. State law recognizes the
regional nature of the housing market, and requires every city and county to plan for its "fair share" of the
region's housing need (Government Code, Section 65583(a)(1)).
The major goal of the RHNP is to assure a fair distribution of housing among cities and counties, so that
every community provides an opportunity for a mix of housing affordable to all economic segments. The
housing allocation targets are not building requirements, but goals for each community to accommodate
through appropriate planning policies and land use regulations. Allocation targets are intended to assure
that adequate sites and zoning are made available to address anticipated housing demand during the
planning period and that market forces are not inhibited in addressing the housing needs of all economic
segments of a community. One of the few tools available to local jurisdictions to influence the
development of affordable housing is the power to regulate land use. Under state law, existing zoning
ordinances, policies, building standards, and other land use regulations cannot be used by local
jurisdictions as a justification for a request to reduce their RHNP housing targets except for the
preservation and protection of public health.
SLOCOG, under direction from state law and with input from a housing committee made up of jurisdictional
representatives and housing interests, has determined each locality's"fair share" of the region's need for
housing, and has divided that need into the required four income categories of housing affordability. Local
housing needs may exceed this determination of a locality's regional fair share. SLOCOG has estimated
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the minimum regional need for housing. Communities are allowed to plan for and build a number of new
housing units exceeding their minimum "fair share." If possible, SLOCOG encourages communities to work
together to be sure that one area's excess can account for another's shortfall.
Council of Governments are assigned the responsibility for RHNP preparation in part, because the State
has an interest in having regional agencies that prepare regional transportation plans also prepare the
RHNP. This helps to provide some consistency between the regional transportation planning process and
regional housing allocations. Ideally, the same assumptions regarding regional population and housing
growth are likely to be used as the basis for both the RHNA and the Regional Transportation Plan (RTP).
The short term HCD Statewide forecasts are higher than the projections used for the 2001 RTP and also
higher than the locally prepared jurisdictional and COG derived projections. Staff has worked with the
State Department of Finance (DOF) and HCD to address these differences, yet it appears that DOF
derived numbers have had the greatest influence on determining HCD allocations.
Table 1
Housing Unit Distribution — By Income Category
Units By Income Category
1
Above Totals
Very Low Low Moderate Moderate
Member Agency.
Arroyo Grande 362 1 261 303 757 1,683
Atascadero 360 1 266 317 771 1,713
Grover Beach 232 185 216 422 1,055
Morro Bay 215 142 150 305 813
Paso Robles 680 506 564 1,143 2,893
Pismo Beach 160 109 112 299 680
San Luis Obispo 1,659 944 1 972 1 2,145 5,720
County Unincor . 869 672 802 1,972 1 4,335
4,556 3,084 3,437 7,815
Regional Total Total Units 18,892
C. Key Concepts
When using this plan, it is important to keep in mind what the intention of the RHNP is, and is not. There
are four key concepts underlying the entire RHNP process that need to be clearly understood:
1. The housing unit allocations contained in the plan, as distributed by income category for each
jurisdiction, are primarily determined by three factors:
A) The jurisdiction's projected job and housing growth in relation to region-wide job and
housing growth; and,
B) The extent to which a jurisdiction's current income distribution differs from that of the
regional average.
C) The HCD determined Regional Housing Need.
The plan's fair share adjustment allocates future (construction) need by each income category in a
manner that meets the state mandate to reduce the overconcentration of lower income households in
one community versus another community. The allocation methodology derives future goals for each
community based on SLOCOG's objective of achieving a more balanced region-wide income
distribution in each jurisdiction in the next 20 years. The housing methodology committee input, along
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with staff recommendations, calls for a 50% shift toward the regional average for each jurisdiction. For
example, those jurisdictions having a percentage of very low income households below the regional
average for this income category will be allocated a higher percentage of very low income housing
units than would a jurisdiction having a base year percentage of very low income households at or
above the regional average.
2. The allocations are intended to be used by jurisdictions when updating their housing elements
as the basis for assuring that adequate sites and zoning are available to accommodate at least
the number of units allocated. They are not housing unit quotas that jurisdictions must achieve
within the-time frame of their next housing element update
Many jurisdictions, as well as other groups having an interest in affordable housing issues, often treat
the housing allocations as a numerical quota that must be achieved.. This is not the intent of the
process, nor is it what the California State Department of Housing and Community Development(HCD)
is looking for when reviewing local housing elements. The State recognizes that the provision of
affordable housing is largely market-driven, and that funding, subsidies and other incentives to provide
affordable housing are very limited. One of the few major tools available to local jurisdictions to
influence the development of affordable housing is the power to regulate land use. Thus; breaking
down development barriers, such as exclusionary zoning and growth controls, are some of the major
goals of State law in the housing arena.
3. The regional allocations only address a portion of each jurisdiction's local housing needs under
the provisions of State housing law.
The primary goal of the RHNP is to quantify each jurisdiction's responsibility for accommodating its fair
share of the regional housing need. The RHNP does not address all of the local housing needs of
each jurisdiction,just the share of the regional new housing construction need. Other local needs must
also be addressed in each jurisdiction's housing element, such as housing overpayment and
overcrowding, housing preservation, and the housing needs of farmworkers, students and other
special-needs groups. Local needs may be greater than the regional need for one or more income
categories. For example, higher than projected replacement housing needs, the loss of affordable
rental housing, or local employment trends not anticipated by SLOCOG may create new housing
construction needs greater than the regional allocations.
Jurisdictions should try to ensure that adequate sites and zoning are available to accommodate
whichever need is the greatest within each household income category. In addition, localities should
provide more definition of their need numbers by determining housing needs by type of dwelling unit
and the housing requirements of special needs groups. The RHNP indirectly deals with housing
affordability by providing a starting point from which jurisdictions can ensure that adequate sites and
zoning are available to accommodate their regional allocations for very low and low-income
households. The RHNP does not directly assess housing affordability within each jurisdiction,
however. For example, the RHNP does not address the rent or mortgage payment that is affordable to
households in.each of the four income categories. Again, the responsibility for assessing local housing
affordability rests with each jurisdiction as part of its housing element.
4. Under state law, existing zoning ordinances, policies, building standards and other land use
regulations cannot be used by local jurisdictions as a justification to reduce their RHNP
housing allocation targets.
Government Code Section 65584 (d)of regional housing allocation law states that:
"(1) Except as provided in paragraph (2), any ordinance, policy, or standard of a city or county
that directly limits, by number, the building permits that may be issued for residential construction,
or limits for a set period of time the number of buildable lots that may be developed for residential
purposes, shall not be a justification for a determination or a reduction in the share of a city or
county of the regional housing need.
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(2) Paragraph (1) does not apply to any city or county that imposes a moratorium on residential
construction for a specified period of time in order to preserve and protect the public health and
safety. If a moratorium is in effect, the city or county shall, prior to a revision pursuant to
subdivision (c), adopt findings that specifically describe the threat to the public health and safety
and the reasons why construction of the number of units specked as its share of the regional
housing need would prevent the mitigation of that threat."
A 1987 Attorney General Opinion (Opinion 87-206, see Appendix E), concluded that the availability of
suitable housing sites must be considered based not only upon the existing zoning ordinances and
land use restrictions of the locality, but also based upon the potential for increased residential
development under alternative zoning ordinances and land use restrictions. Councils of Governments,
therefore, cannot accept reductions in a local jurisdiction's RHNP housing allocation targets based
upon existing land use regulations that limit the availability of suitable sites to accommodate its fair
share allocation targets.
State law requires SLOCOG to follow a set of guidelines in preparing its regional housing need
determination. Guidelines come from two primary sources: (1) HCD who sets a housing need planning
target for the region, and (2) State law, which provides guidelines on how to allocate the region's
housing need among jurisdictions (Govemment Code, Sections 65584).
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SCHEDULE
The following table shows an outline of the RHNP process and the steps involved in the development of
the regional housing needs plan. By December 2002, at the end of the RHNP process, the SLOCOG
Board is required to adopt the regional plan or HCD will design and adopt a plan for the region. The final
adopted Plan will then be used by the local jurisdictions in their Housing Element update process. Local
housing elements must be adopted and certified by the end of 2003.
The following dates mark the major RHNA process milestones:
-December 2002 Initial Allocation of Regional Need by HCD
-Dec.,2001 — February, 2002 Regional Review of HCD assignment
•March -July, 2002 Preparation of Draft RHNA Plan
•June— December, 2002 Public and local review
-December 2002 RHNA adoption
-December 2002 to Dec. 2003 The Housing Element preparation period for jurisdictions
-January 2001 to December 2003 Interim Planning Period'
'Jurisdictions may take credit for housing units approved or constructed during this interim planning period, and
apply the credit to their housing elements.
Figure 1
RHNA Work Plan Outline
And Timeline Steps 1-10
2001 2002
Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct. Nov Dec
1
2 2 2 2
3 3
4
5
6
7
8 8
9
10
11
Step 1 November—December 2001\January 2002, Consultation between HCD and SLOCOG
regarding draft allocation figures.
Step 2 December—January 28, HCD issues determination to of regional need to COG."
Step 3 Fall 2001, representatives of Local Housing Committee (LHC) review allocation methodology
and other elements of RHNP.
Step 4 SLOCOG accepts HCD estimate of countywide housing need.
Step 5 Preliminary Draft RHNA methodology circulated for comment among Local Housing Committee
members.
Step 6 SLOCOG authorizes release of draft plan for comment and forwards to HCD for review. HCD
has 30 days, SLOCOG and local agencies have 90 days. Public input begins at this point with
several workshops.
Step 7 End of 90-day comment/appeal period by local jurisdictions.
Step 8 Review of comments and appeals by SBCAG staff and TPAC.
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Step 9 Revised final RHNA responding to HCD and SLOCOG jurisdictions comments and/or appeals
considered and adopted by SLOCOG. [Within 60 Days of step 6 (90 day appeal), SLOCOG
acts on proposed revisions by members].
Step 10 Within 60 days SLOCOG can hear any appeals on final RHNP (includes a 30 day notice to
local agencies). Any revisions adopted into final RHNP.
Step 11 Final RHNP made available and forwarded to HCD December 31, 2002.
"This gap in the timeline is explained by the negotiations between HCD and SLOCOG regarding the RHNP
estimate. On June 10, 2002, HCD responded to SLOCOG's March 14th (second) appeal for a reduced
allocation by stating that SLOCOG request for a further reduction is denied and the 18,892 "low" allocation
would stand. The letter detailing the reasons behind the HCD position can be found in Appendix B-5.
GEOGRAPHY
The local jurisdictions addressed in the RHNA process include the seven incorporated cities and the
unincorporated area of the county. The following map shows the geographical relationship between
these areas.
Figure 2
Map of San Luis Obispo County
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Q .. J41"
s aso
YprO ..d , I: t A .t' ( I .. 1 h• Vr.,u'4'Id», 5 1'
r; Morro Bay u y
I �1 - f t M" •Fi jY 4 teY Mr
" a - 1 S-r S.:.l f�t , z a N` .r .St i tT 'res s s'�Ftr•f l
T r ,. � ;/ • n Lala Obispo � y '^ " t.,� F
�+ ..�:
r, t '�.b" t /,G ' r 1.�tf ]t �1•r r rt _� J f..— .
Pismo,Beach yo Grande
Grover,Beach
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COUNTYWIDE ESTIMATE OF REGIONAL HOUSING NEEDS
The Department of Housing and Community Development (HCD) is responsible for assigning regions
around the state with a share of the estimated statewide housing need. In the case of the SLOCOG region,
which is cotemninous with the County of San Luis Obispo, inclusive of the seven cities, the planning period
is January 2001 to July 2008. The assignment of the regional total of units (22,460 — low estimate) was
initially provided by HCD in early November 2001 during a meeting HCD had with SLOCOG staff. After
SLOCOG review, a response letter was sent to HCD that provided a local perspective on their State
growth assumptions and requested the initial allocation be substantially reduced, based on a variety of
factors (Appendix B-2). Initially, SLOCOG and the local jurisdictions requested a reduction from 22,460
units to 10,360 citing: equity issues in relationship to allocations to surrounding counties, dubious
economic forecasts, resource constraints, observed growth rates, local population projections, and ability
to provide such a rapid increase in housing stock over such a short period. In response, HCD partially
reduced the initial allocation of 22,460 to 18,892, providing the current RHNA numbers as of their February
response letter (Appendix B-3). However, the basis for reduction by HCD did not acknowledge any of the
reasons cited by the SLOCOG appeal.
In March of 2002, SLOCOG continued to negotiate with HCD with the sentiment that the reduced number
was still well beyond the local jurisdictions capacity to provide housing. On March 14, 2002, SLOCOG
sent another letter to HCD (Appendix B-4) requesting a reduction of 5000 units based upon replacement
need data, and migration issues related to equity and components of demographic change. On June 10,
2002, SLOCOG received a fax from HCD denying this request(Appendix B-5).
The change in the regional housing need estimate is described below and summarized in the following
table. HCD estimated and allocated the region's share of statewide need to San Luis Obispo County, using
three major factors.
1. The January 2001 to July 2008 household growth (18,892 units) foreseen by HCD is based on the
State Department of Finance forecasts that do not integrate local land use, zoning or other state
regulatory policies. SLOCOG and local forecasts of 2001 addresses some of these constraints and
results in a lower household growth. However, the lower SLOCOG household forecast was not
accepted by HCD and HCD used the higher Department of Finance forecast.
2. Vacant owner and renter units allowing for residential choice was revised by HCD. Initially, the HCD
vacancy rate requirement target of 6% was based on a statewide average. SLOCOG argued that
this was an unrealistic target as it is historically higher than San Luis Obispo County jurisdictions
have experienced over the last 30 years. As a result, the vacancy requirement was reduced, to
reflect a rate based on local historic trends.
3. Units potentially needed to replace housing units lost due to conversion, demolition, or natural
disaster was determined by HCD to be 1,587 units. HCD uses a statewide average housing unit loss
rate of .002% annually and apples it to all housing markets in the state. There is a lack of local data
to determine the extent of lost units. Local jurisdictions noted that many demolished units are
replaced with one or more units thus increasing the overall housing supply. HCD responded that lost
units are often not formally tracked and the .002% is likely lower than that experienced in the housing
market. Therefore, HCD did not alter their original estimate of units lost due to conversion,
demolition, or natural disaster, despite the fact that local jurisdictional surveys determined that the
likely housing stock loss was closer to 587 units for the period than HCD's 1,587.
HCD did make an adjustment for a discrepancy in reported group quarters vs. household data reported by
SLOCOG. HCD did not lower the requested allocation based on SLOCOG's arguments about competing
state policies, e.g., housing growth and coastal preservation, which affect the ability of local jurisdictions to
meet state housing targets.
HCD established the countywide„housing-need estimate between 18,892;and 26;569 dousing uints;,oyer
the period betweep,January,:2001. and July;2008. The total of 18,892 units is the conservative allocation
for which the SLOCOG region can plan. HCD will allow planning for a higher number of units if the COG so
desires. Additional detail on the factors that go into this calculation can be found in the Appendices B-2
and C.
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STATE ALLOCATION CRITERIA
Once the regional allocation is adopted the next step in the RHNA process is to allocate the countywide
estimate of need to local jurisdictions.
State law requires SLOCOG to follow a set of guidelines in preparing its RHNP. Guidelines come from two
primary sources:
(1) HCD, which sets a housing need planning target for the region; and,
(2) State law, which provides guidelines on how to allocate. the region's housing need among
jurisdictions (Government Code, Sections 65584 et. seq.)
HCD is responsible for providing the region with its share of the estimated statewide housing need for the
period of January 1, 2001 through July 1, 2008. HCD sets forth the region's housing need based on
employment and population growth projections and changes in the housing stock (See HCD letter
attached as Appendix B-2). SLOCOG is required to take into account planning considerations when
housing needs are allocated among jurisdictions (Government Code, Section 65584, Appendix D). State
law does not specifically define each "planning consideration," but allows SLOCOG to determine how to
address each issue in the regional housing plan.
The planning considerations to be included in the analysis are:
-Market demand for housing
-Type and tenure of housing
-Employment opportunities
-Suitable sites and public facilities
-Commuting patterns
-Loss of assisted multifamily units
-Reduction of impaction
-Special housing needs
Market Demand.Anticipated employment and population growth are major determinants of housing need
in the region. These factors, together with demographic measures that predict household formation, are
considered as part of the estimation of market demand contributing to the RHNP. This consideration is
accomplished primarily through the growth forecasting process, which measures demographic and
economic trends that create new jobs and population, and consequently housing need. The SLOCOG
forecast uses an employment, and population forecast to determine growth over the RHNP time period.
These forecasts were submitted to HCD for consideration.
Type and Tenure: In order to fulfill the region's housing need, type and tenure (owner or renter occupied
households) must be considered. A Vacancy Need adjustment factor is built into the SLOCOG allocation
formula to ensure that there is a vacancy balance among jurisdictions. Varying segments of the population
such as single persons, families with children, and retirees, require different housing types. Housing
tenure such as rental and owner, and a variety of housing types such as single family andmulti-family, are
all required for a healthy housing market. The housing need allocation by income category, in general,
encourages the development of a variety of housing types: high density for lower income, senior housing
etc. This level of detail is best addressed in housing elements, reflecting needs of the local housing market
more accurately than could be done on a regional basis.
Suitable Sites and Public Facilities: State law requires SLOCOG to consider the availability of suitable
sites and public facilities in the regional needs determination. According to the California Attorney General
(Opinion 87-206, see Appendix E), the availability of suitable sites must be based on existing zoning
ordinances and land use restrictions of a locality and on the potential for increased residential development
under alternative zoning and land use restrictions. State law also Drohibits the RHNP to be based on
growth control measures, except to preserve public health and welfare (Government Code, Section
65584). SLOCOG incorporates this concept through its housing projections, which form the primary basis
for the regional housing needs determination.
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Commuting Patterns: SLOCOG must also take into consideration the commuting patterns of workers so
that future housing is not placed in areas that lack the potential for sufficient infrastructure. SLOCOG's
regional needs determination considers commuting patterns through its job-housing balance adjustment.
In particular, household growth by income and housing type will influence trip generation (number),
distribution (origin and destination), modal choice (auto, transit, carpool, etc), assignment (which route is
taken), and congestion for the regional arterial and highway network. Jurisdictions that have had above
average job growth are being asked to accommodate more housing (proportionally) than areas where
housing has outpaced job creation. The ultimate goal is to help reduce the propensity for workers to live in
areas far from their jobs by providing additional housing in employment rich areas.
Employment Patterns: SLOCOG considers regional, and local employment patterns as they relate to
housing need through the growth forecasting process, as described above in the section, Market Demand.
Local policies or events not anticipated in the regional forecast could affect local housing demand or need,
however.
Loss of Assisted Units: The RHNP determination should also take into consideration the loss of housing
units in assisted developments that convert to non low-income use due to subsidy expiration or termination
of use restrictions etc. Assisted developments include multifamily rental households that receive
govemment assistance under an array of federal, state, and local programs.
Avoidance of Further Impaction:The RHNP allocation requires that jurisdictions with high concentrations
of low-income households attempt to avoid further impaction. Therefore, the allocation of future lower
income households is decreased in those jurisdictions that have a higher proportion of very low or low-
income households than the countywide average. Conversely, the allocation of future lower income
households is increased in those jurisdictions that have a lower proportion of very-low and low-income
households than the countywide average. This assists in balancing the responsibility for addressing the
housing needs of all economic segments of the community throughout low, middle, and higher income
communities. SLOCOG achieves this objective by shifting the income categories for housing need 50%
toward the regional average.
Special Housing Needs: The special housing needs of persons with unique housing situations, including
farm workers, fixed income, and homeless and others should also be taken into consideration. An
assessment of farm workers and those who overpay for housing from previous census periods is included
in the RHNA allocation to address some of these issues. Unfortunately, there is a data limitation in
identifying the location and extent of persons with other special needs and they may best be addressed in
the local housing elements.
In addition,jurisdictions can find information on housing overcrowding and overpayment for use in
updating their housing elements from the Department of Housing and Urban Development (HUD),
through their Comprehensive Housing Affordability Strategy (CHAS) program. CHAS data can be
downloaded from the following web site: http://webprod.aspensys.com/housing/chas/state.asp
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APPEALS CRITERIA AND PROCESS
Under State law, jurisdictions are given an opportunity to comment on, and propose revisions to, their
share of the RHNP within 90 days of adoption. According to the government code, any revision must meet
the test of accepted methodology, readily available data, and be consistent with State-identified criteria for
the RHNP.
Accordingly, appeals will not be considered by SLOCOG unless they meet the following criteria:
1. The appeal must be received within 90 days of SLOCOG Board adoption of the Draft RHNP.
SLOCOG strongly encourages jurisdictions intending to appeal to submit well in advance of the
deadline.
2. The appealing jurisdiction must provide evidence that:
a) The RHNP methodology was incorrectly applied in determining the jurisdiction's allocation targets;
or
b) SLOCOG used incorrect or faulty numbers in determining their allocation targets (i.e., different
numbers than the regional growth projections adopted by the SLOCOG Board on 3/15/01).
3. Appeals must be submitted by an authorized signatory; including:
• Mayor
• Chair of County Board of Supervisors
• City Manager
• County Chief Administrative Officer
4. A contact person must be identified. This person should be able to respond to SLOCOG staff
regarding the documentation pertinent to the appeal.
As stated previously, under State law, existing zoning ordinances, policies, building standards and
other land use regulations cannot be used by local jurisdictions as a justification for a request to
reduce their RHNP housing allocation targets. The only exception is in cases where a moratorium on
residential construction is legally imposed for a specified period of time to preserve and protect the public
health and safety that would constrain the projected housing need.
Following the end of the 90-day revision request period, SLOCOG is required to take action on any
requested revision within 60 days. The SLOCOG Board will hear all appeals. SLOCOG staff will make a
recommendation to the Board on the technical merits of the appeal. SLOCOG may accept the proposed
revision, modify its earlier determination, or indicate, based upon available data and accepted planning
methodology, why the proposed revision is inconsistent with the regional housing need.
If the SLOCOG Board does not accept the proposed revision, then the requesting jurisdiction has 30 days
to request a public hearing to review the housing allocation targets in question. SLOCOG then has 30
days to notify the requesting jurisdiction of at least one public hearing. The date established for such
hearing must be within 30 days following this notification.
If, as a result of this process, SLOCOG accepts a proposed revision or modifies its earlier determination,
the city or county shall use that share. If SLOCOG grants a revised allocation, it must still ensure that the
current total regional housing need, as allocated by HCD, is maintained. This means that if one
'uni isdiction's allocation changes one or more other allocations must also change to insure the total
regional allocation and distribution by income group remains the same If SLOCOG determines that the
proposed revision is inconsistent with the regional housing need, the city or county shall use the share that
was originally determined by SLOCOG.
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POLICY FOR RHNP REDISTRIBUTION UPON ANNEXATION OR INCORPORATION
In the event of annexation or incorporation of new jurisdictions during the planning period of this RHNP,
provision needs to be made for the redistribution of housing needs. The following policy establishes the
conditions and process for any such redistribution:
1. Filing of Application for Annexation or Incorporation
Upon receipt of notice of filing from LAFCO of a proposed annexation or incorporation, the affected county
will notify SLOCOG of the proposal and resulting need for a redistribution of housing needs between the
county and applicant jurisdiction.
2. Discussion with Annexinglincorporating City
During the course of the annexation/incorporation process, the affected county will negotiate in good faith
between the annexing/incorporating city and the county the RHNP allocations to be redistributed. There
cannot be a net reduction in the RHNP allocations within the county, This means that the total number of
housing units by income category accepted by the applicant jurisdiction, plus the remaining number of
units by income category attributable to the donor county, shall not be less than the original number of
units by income category originally allocated to the county by the RHNP. Other than satisfying this
requirement, the affected county and annexing/incorporating city may negotiate any redistribution of
housing need that is mutually acceptable.
3. SLOCOG Mediation
If, after negotiating in good faith, both the affected county and annexing/incorporating city cannot reach a
mutually acceptable redistribution of housing need, either jurisdiction may request that SLOCOG mediate
the redistribution of housing need. The purpose of such mediation will not be for SLOCOG to actually
redistribute the housing need between the two affected jurisdictions, but to achieve mutually acceptable
redistribution through negotiation. If, after mediation by SLOCOG, the affected county and
annexing/incorporating city still cannot reach a mutually acceptable redistribution of housing needs, the
matter will be referred to HCD.
4. Annexation/Incorporation Conditions
The affected county and the annexing/incorporating city will jointly draft conditions covering the transfer of
RHNP allocations from the county to the annexing/incorporating city. The affected county will request that
the RHNP conditions are included in the LAFCO resolution approving the annexation/incorporation.
5. LAFCO Imposition of Conditions
LAFCO imposes the proposed RHNP conditions in the resolution approving the annexation and/or
incorporation.
6. Transfer of RHNA Allocations
RHNP allocations will be transferred from the county to the city as specified in the LAFCO resolution.
7. Housing Elements
7a. County Housing Element
The county's Housing Element should describe assumptions, conditions, and implications of any change
in RHNP assumptions resulting from an annexation/incorporation. Following the effective date of an
approved annexation/incorporation, the county may amend its Housing Element to reflect the change in
RHNP allocations.
7b. City Housing Element Amendment (annexation)
If the annexation and accompanying redistribution of RHNP allocations between affected jurisdictions
occurs after the statutory housing element amendments have been adopted, any city general plan
amendment accompanying an annexation must include amendment of the city's housing element to
reflect that change.
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7c. City Housing Element (incorporation)
If the incorporation and accompanying redistribution of RHNP allocations between affected jurisdictions
occurs after the statutory housing element amendments have been adopted, the new city will include
the RHNP transfer in the housing element adopted for the new community.
8. State HCD Review
The transfer of RHNP allocations for annexations or incorporations pursuant to this policy is subject to the
review and approval of HCD prior to the implementing action.
Figure 3
METHOD OF ALLOCATING REGIONAL HOUSING NEEDS TO LOCAL
JURISDICTIONS
The countywide allocation of need is based on three primary steps. The following diagram provides a
general description;
18,892 Units
Total Regional Need
Step 1 Step 2
15,608 Units 3,284 Units
Allocated to jurisdictions Allocated to
based on SLOCOG Job and jurisdictions using
Growth Forecast Vacancy Need
( 7 year period )
Step 3
Housing units - by income level -
allocated to prevent concentrations
of very low and low income
residents.
The total regional allocation = the housing unit growth from the SLOCOG Growth Forecast 2000 over the
7.5 year RHNA period + housing units allocated to adjust for jobs-housing balance. This allocation for
each jurisdiction is then distributed by income level so an attempt is made to reduce the concentration for
areas having a high proportion of low or very low income.
The first step is an allocation of housing growth based on the regional growth forecasts, which used the
State of California's Employment Development Department (EDD) job data and the State Department of
Finance (DOF) and US Bureau of the Census (Census)data. The forecast allocates approximately 15,608
of the 18,892 countywide housing need assigned by HCD. The forecast methodology responds to many of
the planning factors, such as market demand for housing, employment opportunities, suitable sites, public
facilities, and commuting patterns. See Appendix C.
16
3-27
ATTACHMENT 3
The remaining 3,284 housing units are allocated in the second step (vacancy housing adjustment). This
adjustment is based on vacancy rate to address both demand and mobility in the housing market..
Weighting factors, or multipliers, are applied to provide emphasis on individual criteria. For example,
employment is emphasized with a higher multiplier, so areas with the more employment growth since 1990
are allocated more housing. Areas with a higher vacancy rate should benefit as this factor is subtracted
from the total.
The third step (income distribution adjustment) attempts to make adjustments to avoid further impaction in
the concentration of very-low and low-income residents. Areas with higher than average concentrations of
very-low and low-income residents are assigned more moderate and above moderate-income households.
Conversely, areas with more above moderate-income residents are assigned more low and very low-
income households. The income levels vary throughout the county as the following table shows.
Table 2
Household Income Distribution
_...----------
San Luis Obispo County
I
Census 2080 Income Distributions for Households
Very Low Low Moderate Above totals
Moderate
Arroyo Grande 20% 15% 18% 47% 100%
Atascadero 19% 15% 19% 47% 100%
Grover Beach 23% 19% 23% 35% 100%
14orro Bay 30% 19% 19% 32% 100%
Paso Robles 24% 19% 21% 36% 100%
Pismo Beach 24% 16% 15% 45% 100%
San Luis Obispo 35% 17% 16% 32% 100%
County Unincor . 18% 159/6 19% 48%1 100%
I
Regional average 23% 16% 18% 43% 100%
50%Shift toward regional average
Arroyo Grande 229/6 16% 18% 45%1 100%
Atascadero 21% 16% 19% 45%1 100%
Grover Beach 22% 18% 21% 406/0 100%
M rro Bay 27% 18% 19% 38%1 100%
Paso Robles 249/6 18% 20% 40% 100%
Pismo Beads 249/6 169/6 179/0 44% 100%
San Luis Obispo 29% 17% 17% 38% 1006/0
County Unincor . 21% 16% 19% 46% 100%
i
Regional average 23% 16% 18% 43% 100%
The purpose of this step is to try and moderate this discrepancy to some degree. The four income
category definitions used in the RHNA process are based on definitions established by the U.S.
Department of Housing and Urban Development (HUD) and State of California for use in their assisted
housing programs. Income limits are adjusted for household and family size so that larger families have
higher income limits. The income categories are defined as follows:
"Area median,"as defined in federal law and HUD regulations, is the higher of:
1) The metropolitan area or non-metropolitan county median family income
($50,200 in SLO County—2001); or
2) The statewide non-metropolitan median family income ($38,600 for 2001).
17
3��
ATTACHMENT 3
The San Luis Obispo region's median family income is $50,200 so therefor#1 applies in this area.
Very Low Income - up to 50% of the area median family income with adjustments for unusually high
or low area income or housing costs and household size.
Low Income - between the very low-income limit and 80% of the area median family income with
adjustments for unusually high or low area income or housing costs and household size.
Moderate Income - between the low-income limit and 120% of the area median family income with
adjustments for unusually high or low area income or housing costs and household size.
Above Moderate Income-exceeding the moderate income limit adjusted for household size.
The 2000 Census income data at the place level is being incorporated into SLOCOG's RHNP. Income
data is available for persons, families, and groups of unrelated persons living together. Per capita income
data is not useful for this purpose since this information reflects income for an individual, including young
children. Family income data is more useful, but ignores a large segment of the population that is living
together, but unrelated by blood or marriage. Household income data is used because it reflects the largest
population in the housing market.
The median household income in San Luis Obispo County in 2001 was $50,200. Applying the income
ranges to the median income results in the following distribution of household income groups:
Table 3
SAN LUIS OBISPO COUNTY Area Median Income (2001)- $50,200
Family Size
STANDARD 1 2 3 4 5 6 7 8
Very low income 17,550 20,100 22,600 25,100 27,100 29,100 31,100 33,150
Lower income 28,100 32,150 36,150 40,150 43,350 46,600 49,800 53,000
Median income 35,150 40,150 45,200 50,200 54,200 58,250 62,250 66,250
Moderate income 42,200 48,200 54,250 60,250 65,050 69,900 74,700 79,550
Higher income limits apply to families with more than eight persons. For all income groups, the income limits for families
larger than eight persons are determined as follows: for each person in excess of eight, add eight percent of the four-person
income limit base to the eight-person limit, and round the answer to the nearest$50.
18
ATTACHMENT 3
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