STAFF REPORT

SUBJECT: RHNA Credit for Exempt Entities MEETING DATE: January 16, 2014 AGENDA ITEM: 5F STAFF CONTACT: Peter Imhof, Brian Bresolin RECOMMENDATION: Authorize Chair to sign a letter to the State Department Housing and Community Development regarding Regional Housing Needs Allocation (RHNA) credit for housing planned by “exempt entities” and direct staff to gauge interest and support of other metropolitan planning organizations and local governments. SUMMARY: The State Department Housing and Community Development (HCD) has posted on its website a statement of its policy concerning accounting for housing planned by government entities that are exempt from the RHNA process. In Santa Barbara County, such exempt entities include UCSB, Vandenberg Air Force Base and the Chumash tribal reservation. Housing and Community Development acknowledges that “the development of new housing on exempt entity sites can meet a portion of a local government’s housing demand (RHNA),” but proposes a “case-by-case” review based on adequate documentation demonstrating “the likelihood that the planned housing can be developed within the current RHNA/housing element cycle.” As a result, for example, Housing and Community Development will not unequivocally allow credit for housing planned under UCSB’s 2025 Long Range Development Plan. Housing and Community Development is in effect applying a double-standard, treating exempt entities differently from government agencies subject to the RHNA process, even where both exempt and non-exempt entities have similar planning processes that determine housing capacity. Housing and Community Development’s differential treatment is contrary to SB 375 in that it is not consistent with SBCAG’s adopted Regional Transportation Plan-Sustainable Communities Strategy, which includes housing planned by exempt entities. This staff report presents a draft letter to Housing and Community Development for the Board’s consideration. We are also requesting that the Board direct staff to gauge interest and support from other local governments and metropolitan planning organizations on this topic. If support and interest are present, then SBCAG staff may suggest a joint letter signed by other metropolitan planning organizations together or ask that interested agencies draft similar letters of their own. If satisfactory policy clarification cannot be obtained from Housing and Community Development through discussion, then clarifying legislation might be in order.

2

DISCUSSION: Background Housing and Community Development has articulated a new statement of its policy with respect to accounting for housing planned by government entities exempt from the RHNA process under State housing law. SBCAG previously posed questions to Housing and Community Development staff about how SBCAG member agencies should account for housing planned by jurisdictions that are not members of SBCAG and do not receive a RHNA share (such as UCSB, VAFB or the Chumash tribal reservation). TPAC members have voiced support for pursuing clarification from Housing and Community Development. Over the past year, SBCAG staff has asked Housing and Community Development staff for clarification on how to reconcile regional housing need allocated to member jurisdictions with additional housing capacity planned within the region by non-member entities. TPAC also tangentially discussed this issue in the context of the RHNA methodology last summer. This issue is especially relevant in the South Coast housing area, where UCSB has planned more than 1,874 units of housing for faculty and staff and 831 units of student family housing in its 2025 Long Range Development Plan (LRDP), adopted by the UC Regents in September 2010. By comparison, the total housing need identified for the Santa Barbara County region for the 2014-2022 period is 11,030 units. UBCB’s planned housing (not counting group housing such as dormitory beds) would therefore meet roughly 25% of this identified housing need. SBCAG accounted for UCSB’s planned housing in the 2040 Regional Transportation Plan-Sustainable Communities Strategy, allocating forecast residential growth to UCSB consistent with UCSB’s plans. (UCSB is treated as a “special generator” in the UPlan land use model.) Housing and Community Development’s Position Attachment 1 includes Housing and Community Development’s statement of policy, excerpted from its website: http://www.hcd.ca.gov/hpd/housing_element2/SIA_land.php. Housing and Community Development acknowledges that “the development of new housing on exempt entity sites can meet a portion of a local government’s housing demand (RHNA).” However, Housing and Community Development proposes a “case-by-case” review approach which would allow RHNA credit for housing planned by exempt entities “when documentation is provided that demonstrates the likelihood that the planned housing can be developed within the current RHNA/housing element cycle.” Housing and Community Development lists the following examples of such documentation:

agreement with the entity controlling the land that grants the local government authority regarding approving, permitting, certifying occupancy, and/or reporting new units to DOF.

documentation from the entity controlling the land that demonstrates planned housing has been approved to be built within the current RHNA cycle (note: short or long term housing development budgets or plans typically do not constitute adequate approval as changes can occur).

data pertaining to project construction and unit affordability by household income category.

Housing and Community Development’s note that “short or long term housing development budgets or plans typically do not constitute adequate approval as changes can occur” implies

3

that UCSB’s Long Range Development Plan would not be adequate documentation to meet this standard. In prior correspondence (see Attachment 2), Housing and Community Development staff opined that local governments may take credit (only once) for

housing sites controlled by (a) a local government or (b) an exempt entity that the particular local government authorized to annually report housing stock change data to State Department of Finance (DOF) . . . for units meeting one of these criteria:

Units approved based on completion of the entitlement process or issuance of building permit. This can include approvals from the previous RHNA/Housing Element cycle that are still valid for units still to be built and/or units not previously reported to DOF before the start of the new RHNA projection period.

Units built (including mobile-home or manufactured units placed on a site) based on final inspection or certificate of occupancy.

Units reported to DOF based on annual submittal of DOF’s Housing Unit Change Form to report unit “increases” to the existing stock of housing units. In unusual circumstances, such as units approved or built near the end of the current housing element cycle that did not get reported to DOF before the end of the cycle, RHNA credit for housing element updates can be taken in the next housing element cycle when the units are reported to DOF.

Thus Housing and Community Development staff would accept units either “approved” by the exempt entity, actually built or reported to DOF before the end of the housing cycle. What “approved” means in the UCSB context is not clear from Housing and Community Development’s guidance to date. Per UCSB planning staff, actions approving University housing include:

Long Range Development Plan adoption by the UC Regents,

Long Range Development Plan certification by the Coastal Commission, and

Issuance of a Notice of Impending Development, which the Coastal Commission gives with its authorization to proceed.

In addition, all individual housing projects that are built on the campus go to the UC Regents for approval of project-specific EIRs or other CEQA document. The Chancellor and UC Regents approve project budget and environmental review following design and budget committee review. SBCAG’s Position Since SB 375 requires that the RHNA allocation be consistent with the Regional Transportation Plan-Sustainable Communities Strategy, we have argued that Housing and Community Development’s policy should similarly take planned housing at universities and other similar institutions outside local planning jurisdiction into account. Since these exempt entities are some of the biggest employers in our region, housing they provide for employees onsite or in the immediate vicinity can reduce trip lengths, travel times, congestion and vehicle emissions,

4

providing much needed housing at affordable levels where employees need it most. University-provided housing for faculty, staff and student families will also meet a housing need that otherwise would have to be met in the surrounding communities. Giving credit for such housing is therefore not only desirable as a matter of public policy and good planning, but in our view is also required by SB 375. SBCAG’s adopted Regional Transportation Plan-Sustainable Communities Strategy (RTP-SCS) includes housing planned by exempt entities into its preferred growth scenario, around which all transportation investments are based. Not giving RHNA credit for such planned housing could cause housing planning by local governments to be out of sync with the Regional Transportation Plan-Sustainable Communities Strategy housing assumptions and thus inconsistent with SB 375. In our view, UCSB’s Long Range Development Plan represents a significant commitment on the part of UCSB to provide housing capacity and provides an equivalent level of certainty to local government zoning that creates residential capacity. In the case of local government zoning, residential capacity counts toward a jurisdiction’s RHNA share as long as that capacity is available, even if it spans multiple RHNA cycles. Exempt entities’ long-range planning documents, such as UCSB’s Long Range Development Plan, have the same purpose and effect as local agency General Plans in planning for housing. If anything, exempt entities’ plans give more assurance that such housing will actually be built, since entities like universities build planned housing themselves, whereas local governments are required only to ensure an adequate amount of properly zoned land, with development left up to private sector developers or other public and non-governmental housing entities, such as housing authorities. Available Long Range Development Plan planned housing capacity should therefore similarly count toward fulfilling the region’s housing need, as long as this planned capacity is part of the approved Long Range Development Plan. Housing and Community Development’s desire for assurance that planned housing will be developed within the current RHNA/housing element cycle is unfounded. Recommended Next Steps Clarification of Housing and Community Development’s policies with regard RHNA credit for housing capacity being provided by exempt entities is needed. More specifically, clarification is needed on whether Housing and Community Development will give credit for housing planned by long-range planning documents, such as UCSB’s Long Range Development Plan. The attached draft letter requests clarification and an unequivocal statement from HCD that HCD will give RHNA credit for housing planned by government entities otherwise exempt from the RHNA statute, when such housing is included in the RTP and the exempt entities’ respective long-range planning documents. It is recommended that the chair be authorized to sign the letter. With the Board’s direction, we would also then seek to gauge support and interest of other California metropolitan planning organizations and local governments, working principally through CALCOG and the MPO Working Group on SB 375 Implementation. Staff is aware of at least some other metropolitan planning organizations, such as Association of Monterey Bay Area Governments (AMBAG), for which this issue of RHNA credit for housing planned by exempt entities is also of concern. If support and interest are present, then SBCAG staff may suggest a joint letter signed by other metropolitan planning organizations together or ask that interested agencies draft similar letters of their own.

5

If acceptable policy clarification cannot be obtained from Housing and Community Development through discussion, then clarifying legislation might be in order. COMMITTEE REVIEW TPAC received an update on the Housing and Community Development policy with respect to housing planned by exempt entities in October 2013 and again this month. TPAC members support pressing Housing and Community Development for clarification of this policy. At this month’s meeting, TPAC members voted unanimously to recommend that the Board consider the draft letter to the State Department Housing and Community Development (Attachment 3) and direct staff to gauge interest and support of other metropolitan planning organizations and local governments. ATTACHMENTS: 1. Excerpt from State Housing and Community Development Website

2. Email from Glen Campora, State Housing and Community Development, dated January

4, 2013

3. Draft letter to State Housing and Community Development

6

Attachment 1: State Housing and Community Development Website Excerpt (http://www.hcd.ca.gov/hpd/housing_element2/SIA_land.php)

Housing Sites Controlled by an Exempt Entity (State, Federal, Tribal Nation)

Sites located on land controlled by exempt entities (e.g. College/University, Military, recognized Tribe) are different from housing capacity planned on sites controlled by local governments. This is because the local government has no control over the planning and decision-making processes of land within another entity’s boundary and therefore may not be able to demonstrate “sufficient certainty” that housing development on sites controlled by other entities could occur within the planning period to meet (lessen) the requirement for the local government to identify adequate local sites to meet all of the jurisdiction’s RHNA.

The Department recognizes that the development of new housing on exempt entity sites can meet a portion of a local government’s housing demand (RHNA). For planned housing on exempt entity sites such as for college/university planned housing, on a case-by-case basis the Department allows RHNA credit when documentation is provided that demonstrates the likelihood that the planned housing can be developed within the current RHNA/housing element cycle. Adequate documentation varies due to differences in the planning processes on land controlled by exempt federal, state or tribal entities (and counties in connection with sites within a city’s sphere of influence). The following reflect examples of documentation to help demonstrate the likelihood of housing being developed on sites near but outside the control of a local government:

agreement with the entity controlling the land that grants the local government authority regarding approving, permitting, certifying occupancy, and/or reporting new units to DOF.

documentation from the entity controlling the land that demonstrates planned housing has been approved to be built within the current RHNA cycle (note: short or long term housing development budgets or plans typically do not constitute adequate approval as changes can occur).

data pertaining to project construction and unit affordability by household income category.

Board of Directors

Roger Aceves Chair City of Goleta

Steve Lavagnino Vice-Chair Santa Barbara County 5th District

Salud Carbajal Santa Barbara County 1st District

Janet Wolf Santa Barbara County 2nd District

Doreen Farr Santa Barbara County 3rd District

Peter Adam Santa Barbara County 4th District

Holly Sierra City of Buellton

Al Clark City of Carpinteria

Frances Romero City of Guadalupe

John Linn City of Lompoc

Helene Schneider City of Santa Barbara

Alice Patino City of Santa Maria

Jim Richardson City of Solvang Ex-Officio Members

Tim Gubbins Director Caltrans District 5

William Dillon Agency Counsel \ County Counsel

January 16, 2014

Randall Deems

Acting Director/Chief Deputy Director

California Housing and Community Development Department

1800 3rd St., Suite 430

Sacramento, CA 95811

Re: RHNA Credit for Housing Planned by Exempt Government Entities

Dear Mr. Deems:

As local jurisdictions in Santa Barbara County prepare to update their general Plan Housing Elements, we are writing to seek clarification of the California Department of Housing and Community Development (HCD) policy with respect to housing planned by government entities exempt from State housing law (“exempt entities”). In Santa Barbara County, these “exempt entities” include the University of California, Vandenberg Air Force Base and the Santa Ynez Band of Chumash Indians. UCSB alone is planning to build some 1,874 units of housing for faculty and staff and 831 units of student family housing (not counting “group quarters” student dormitory housing) in its 2025 Long Range Development Plan (LRDP) adopted in September 2010 by the UC Regents. Since these exempt entities are some of the biggest employers in our region, housing they provide for employees onsite or in the immediate vicinity can reduce trip lengths, travel times, congestion and vehicle emissions, providing much needed housing at affordable levels where employees need it most. University-provided housing for faculty, staff and student families will also meet a housing need that otherwise would have to be met in the surrounding communities. Giving credit for such housing is not only desirable as a matter of public policy and good planning, but, we think, demanded by SB 375. SBCAG’s adopted Regional Transportation Plan-Sustainable Communities Strategy (RTP-SCS) includes this planned housing into its preferred growth scenario, around which all transportation investments are based. Not giving RHNA credit for such planned housing could cause housing planning by local governments to be out of sync with the RTP-SCS housing assumptions and thus inconsistent with SB 375. Exempt entities’ long-range planning documents, such as UCSB’s LRDP, have the same purpose and effect as local agency General Plans and zoning in planning for housing. If anything, exempt entities’ plans give more assurance that such housing will actually be built, since entities like universities build planned housing themselves, whereas local governments are responsible under State Housing Law only to plan and zone land for it. In our view, the LRDP represents a significant commitment on the part of UCSB to provide housing capacity and provides an equivalent level of certainty to local government zoning that creates residential capacity. In the case of local government

2

zoning, residential capacity counts toward a jurisdiction’s RHNA share as long as that capacity is available, even if it spans multiple RHNA cycles. Available LRDP planned housing capacity should similarly count toward fulfilling the region’s housing need, as long as this planned capacity is part of the approved LRDP. At present, the HCD website states that HCD will give credit for housing actually built, but is only willing to consider planned housing on a case-by-case basis. SBCAG requests clarification and an unequivocal statement from HCD that HCD will give RHNA credit for housing planned by government entities otherwise exempt from the RHNA statute, when such housing is included in the RTP and the exempt entities’ respective long-range planning documents. If you have any questions regarding the matters addressed in this letter, please contact Peter Imhof, Deputy Director of Planning, at (805) 961-8900. Sincerely, Roger Aceves Chair cc: File (CP 11-07-01) Jim Kemp, Executive Director Marc Fisher, Associate Vice Chancellor for Campus Design and Facilities, UCSB Sarah Wagner, Vandenberg Air Force Base Sam Cohen, Tribal Administrator, Santa Ynez Band of Chumash Indians Bettie Weiss, Interim Community Development Director, City of Santa Barbara Jackie Campbell, Community Development Director, City of Carpinteria Anne Wells, Advance Planning Manager, City of Goleta Marc Bierdzinski, City Manager, City of Buellton Arleen Pelster, Planning & Economic Development Director, City of Solvang Lucille Breese, City Planner, City of Lompoc Andrew Carter, City Administrator, City of Guadalupe Larry Appel, Community Development Director, City of Santa Maria