Every city and county in California is required to plan for adequate housing across income levels. But how many actually issue enough permits to meet their state-mandated construction goals?
For the second year, the Southern California News Group has created a report card to show how every jurisdiction in the state is doing.
Making the grade
Through a process called the Regional Housing Needs Assessment, or RHNA (pronounced “reena”), cities and counties are given goals every five or eight years for how much housing they need to add that would be affordable to residents in four categories:
- Very low income (0-50% of area median income)
- Low income (51-80% of area median income)
- Moderate income (81-120% of area median income)
- Above moderate income (120+% of area median income)
They’re supposed to file progress reports annually to California’s housing department — though not all do. Data from 2019’s progress reports, which the state released in October 2020, is the basis for SCNG’s latest report card.
Jurisdictions are graded on how close they are to being on track to meet their goals, depending on how far they are into their current RHNA cycle. Some were in the first year of a new cycle in 2019, some were in the last, others were in the middle.
Most of Southern California, for example, was six years into an eight-year cycle. If a city here is supposed to permit 80 moderate-income homes total, it would need to have issued at least 60 permits by 2019 to be fully on track and receive an A grade in that category.
Grades for each category:
- 100% or better on track = A / 4 points
- 75-99% on track = B / 3 points
- 50-74% on track = C / 2 points
- 1-49% on track = D / 1 point
- 0 units built = F / 0 points
- Not required to permit any in that category = Won’t be included in overall grade
Extra credit was given for showing improvement, prioritizing what’s needed most and degree of difficulty:
- Jurisdictions got a half-point bonus if they weren’t fully on track in a category, but improved their score by at least 25 percentage points from 2018.
- Jurisdictions got a 1-point bonus for being at least 90% on track in each of the lower-income categories, and a half-point bonus for being at least 90% on track in the moderate category.
- Jurisdictions asked to increase their housing stock by at least 10% during this RHNA cycle could get up to 2 bonus points, using a formula based on that overall increase and how well they were meeting their goals.
The overall grade comes from adding up the category scores and bonus points, then dividing by the number of categories (not always four; a few weren’t asked to permit any homes at higher income levels). The grade-point averages correspond to these letter grades:
- A+ = 4.33 or higher
- A = 4-4.32
- A- = 3.67-3.99
- B+ = 3.33-3.66
- B = 3-3.32
- B- = 2.67-2.99
- C+ = 2.33-2.66
- C = 2-2.32
- C- = 1.67-1.99
- D+ = 1.33-1.66
- D = 1-1.32
- D- = 0.67-0.99
- F = below 0.67
Key report card takeaways
1. Very few jurisdictions are fully on track
Only 18 jurisdictions in the state are on track to meet their goals in every category they were given a RHNA goal for: Beverly Hills, Calistoga, Corte Madera, Guadalupe, Hillsborough, La Habra, Lemon Grove, Mill Valley, San Marino, Santa Ana, St. Helena, Ukiah, West Hollywood, Westminster and the unincorporated areas of Mendocino, Modoc, San Bernardino and Sonoma counties.
None had difficult goals — San Marino and Westminster were asked to permit only two homes in eight years. Sonoma County had the largest RHNA goal in that group, at 515 homes. The statewide average is more than 2,100.
Another 33 jurisdictions were on track in three of four categories, 75 were on track in only two categories, 197 were on track in only one category (and for most of them, it was the above-moderate-income category) and 216 weren’t on track in any category. (That includes Industry, the only city in California that wasn’t asked to permit any new homes in this RHNA cycle.)
2. Many are ignoring affordable housing
Almost one-third of jurisdictions — 172 cities and counties — have reported zero permits for low- and very-low-income housing during their current RHNA cycles. Those two categories are considered “affordable housing” — within the means of homebuyers who make less than 80% of the area’s median income.
Between 2013 and 2019, jurisdictions statewide have reported permitting only about 63,000 affordable units. They’d need to have permitted about 320,000 to be on track to meet their goals in the current cycle.
Moderate-income housing isn’t faring much better — about 83,000 units have been permitted statewide, short of the 143,000 needed to be on track.
3. They’re not ignoring more expensive housing
Jurisdictions statewide have permitted about 490,000 housing units during those years that would only be affordable to buyers making 120% or more of the area’s median income. That exceeds not just how many they’d need to be on track (339,000) but the total collective goal of about 488,000 homes.
And — while there are some exceptions — most cities and counties don’t appear to be doing much to close the gap. More than three-quarters of the permits issued in 2019 were for above-moderate-income homes.
Those trends of building more expensive housing are reflected in Southern California News Group’s report card. There were five times more F’s than A’s for the least expensive housing category — and five times more A’s than F’s for the most expensive category.
Some local officials will point out that cities are required only to plan for adequate housing — it’s developers who actually build them, and building homes is expensive, so affordable projects just don’t pencil out without subsidies. But affordable housing developers and advocates counter that resistance and restrictive policies make cities and counties complicit in underproduction of affordable housing.
4. Grades show some positive signs
The overall grades are slightly better in 2019 than they were in 2018. While most jurisdictions are still getting a C or D, there are more B’s and fewer F’s than there were a year ago.
Also, twice as many jurisdictions had a better GPA this time than a worse one — 210 improved and 105 worsened.
However, there’s a bureaucratic explanation for some of the improvement: About 30 cities whose grades went up didn’t file a RHNA progress report with the state in 2018 but did in 2019.
5. Grades also show inequality
In both expectations and progress, there are differences between poorer cities — those whose residents tend to make less than $60,000 a year — and wealthier cities — those whose residents tend to make more than $90,000 a year. (The statewide median household income is about $75,000.)
Poor cities were given higher goals. On average, they were asked to permit enough new homes to increase their housing stock by about 11% compared to the first year of their current RHNA cycle, while wealthier cities were only asked to add about 5%. Some of that was by design — for example, in Southern California, more housing was directed toward the Inland Empire, which has more undeveloped space and lower cost of living, than to the more expensive coastal counties. But housing advocates have been scornful of the extremely low goals that some wealthy cities have been given.
Those poorer cities are also less likely to be on track to meet their goals. Part of the reason is probably that those cities have fewer resources to help them plan for housing needs. However, looking at the grades by category illuminates another factor.
All groups of cities — poor, medium and wealthy — are behind when it comes to adding low- and very-low-income housing, averaging D and F grades.
The poorer cities are also getting D’s in the moderate and expensive housing categories.
But cities with medium and high income levels are permitting many more expensive housing units, averaging B grades in that category, which helps to pull their overall grades up.
6. Leaders in 2019
The city of Los Angeles permitted more than 20,000 new homes in 2019 — 17.5% of the statewide total. (It is home to about 10% of the state’s population.) Next up was San Diego, with about 5,200 new homes; San Francisco with about 3,300; Sacramento with about 3,100; and Irvine with 3,000.
Half of the 116,661 homes permitted that year were in just 20 jurisdictions. Fifty-five jurisdictions, or about 10%, didn’t report any new homes.
Cities and counties added just under 10,000 affordable housing units in 2019. Los Angeles also had the most, with 1,255, followed by San Francisco with 1,132. More than half of jurisdictions didn’t permit any affordable housing in 2019.
7. Things are about to get much harder
With California facing a housing crisis, state leaders say millions more homes need to be built. A region encompassing Los Angeles, Orange, Riverside, San Bernardino, Ventura and Imperial counties was expected to permit about 420,000 homes in the RHNA cycle that will end later this year, but is being asked to add 1.34 million homes in the next cycle.
Under a controversial plan approved in 2019, Los Angeles and Orange counties will get a greater share of those homes than before, meaning some cities in those counties will see massive increases in expectations.
The Southern California Association of Governments, a planning organization representing those six counties, is in the final stages of divvying up those 1.34 million homes between its municipalities. More cities and counties than ever appealed their draft allotments, but taking homes away from one means adding them to another, so most appeals were denied. The numbers will be finalized later this year.
As local leaders fret over how they might meet those increased goals, Gov. Gavin Newson is asking the Legislature to create an “accountability unit” within the state housing department that will offer technical help to cities that need it — and enforcement to those that refuse to follow the law.
Source: Orange County Register