TPAC STAFF REPORT

SUBJECT: Regional Housing Needs Allocation Scheduling MEETING DATE: September 2, 2010 AGENDA ITEM: 5 STAFF CONTACT: Brian Bresolin, Michael Powers RECOMMENDATION: Review RTP/RHNA/SCS schedule for input to Department of Housing and Community Development. DISCUSSION: Background One of the more complicated aspects of the schedules set forth in SB 375 is the new relationship between the update of the SBCAG Regional Transportation Plan and the local housing element. Since the RHNA is now incorporated into the Sustainable Community Strategy, which is adopted as part of the RTP, these plans are more closely linked. As you recall, SBCAG is required by state and federal law to regularly adopt and update a Regional Transportation Plan. This plan was most recently adopted in October, 2009. The law indicates that in those areas that attain federal air quality standards the RTP update cycle is every 5 years, for those areas that do not attain the standards the RTP update cycle is shortened to every 4 years. The SBCAG region currently attains all federal air quality standards and is therefore an attainment region. Given that the SBCAG region attains the air quality standards; our next update to the RTP is due in September 2014, five years from the adoption date of the most recent RTP, which occurred in October, 2009. In addition SBCAG adopted our most recent RHNA in 2008 and it was deemed appropriate for use in local housing elements in September 2008. As you know, local housing elements were to be completed by August 31, 2009. The next local housing element update for our region as prescribed in SB 375 is August 2014. Therefore, SBCAG RHNA allocations are due in June 2013; one year earlier than the RTP is scheduled for adoption based on a 5-year update cycle. This new RTP would include a RHNA allocation and Sustainable Community Strategy.

2

However, there is a provision that was approved by SBCAG, in SB 375 for a transition to an 8-year local housing element update cycle, vs. the current 5-year cycle, if the MPO agrees to a 4-year update cycle of its RTP. At the January meeting, TPAC unanimously recommended that the Board approve the proposed change in schedule and the Board adopted this recommendation follow ing public notice.

In SB-375 the initiation trigger for a compliant RTP is September 30, 2010 so any updates of the RTP after this date must be consistent with SB-375. Local governments are then required to adopt their fifth revision of the housing element no later than 18 months following the adoption of the RTP and approval of the RHNA, which should be accomplished concurrently. Time Required to Prepare Most Recent SBCAG RTP and RHNA RTP Our recent history suggests it takes about two years to update, prepare, review, and adopt the RTP. The table below provides the specific dates.

2008/2009 RTP Development Schedule

2007 Nov., 2007 Jul 17, 2008

Staff prepares draft of RTP Public workshops to receive input on contents of RTP Board approves release of Draft 2008/2009 RTP & EIR

Jul 18, 2008 Start of 45-day public review period

Aug 21, 2008 Public hearing on drafts

Sep 2, 2008 Close of 45-day public review period

Sep 18, 2008 Dec., 2008 2009 October, 2009

Board approves RTP, certifies EIR SBCAG sued over adequacy of EIR SBCAG prepares and releases EIR Amendment SBCAG readopts EIR and RTP

This time will likely be extended given the need to prepare the SCS and related requirements of SB-375. RHNA SBCAG received its initial housing allocation from HCD in July of 2007. Following TPAC input the SBCAG board authorized an appeal of the allocation in September. The Final RHNA countywide allocation wad provided to SBCAG in November, 2007. The development of the allocation methodology took place over 5 months at various public meetings using TPAC as the advisory committee. The RHNA draft allocation and plan was released to the public and local agency review in April and adopted in August. The RHNA process allowed for request for revisions from local jurisdictions at a public hearing that occurred at SBCAG in June. A letter was submitted from the City of Santa Barbara requesting an alternative allocation method, which was rejected by the SBCAG Board. Then, the City of Santa Barbara submitted an appeal that the SBCAG Board subsequently rejected in August and adopted the final plan. So, completing the 2007 RHNA allocation process required more than one year.

3

SBCAG RHNA Development Schedule for 2007-2014 Allocation

Date SBCAG Local Agencies

July 2007 HCD draft allocation to SBCAG Local input into SBCAG request for reduction in initial allocation

Sept. 28 SBCAG authorizes appeal of HCD allocation Local input on appeal based on RGF 2007

Nov. 13 Final SBCAG Regional Housing Need Allocation by HCD

Nov. 07 – March 08

Development of RHNA Allocation Methodology by TPAC

Feb. 21, 2008

SBCAG Board consideration of draft allocation methodology

Review by TPAC and local agencies

March 20 Solicitation of public input and SBCAG Board approval of proposed allocation methodology

Review by TPAC and local agencies

April 17 SBCAG Board releases RHNA Draft allocation methodology and RHNA Plan

Review of Draft Plan by TPAC Review by local agencies

April – June Local agency and public review of draft plan Local agency consideration of request for revision

June 19

Board public hearing, consideration of comments on allocation methodology and draft Plan, request for revision by local agency Board consideration of approval of final RHNA Plan. Notice of Plan adoption (within 10 days) submitted to local agencies

Local agency and public review of draft plan

August 4 Deadline for submission of appeals by local agencies

August 21 Board hearing to consider local agency appeals and approval of final RHNA Plan

Local agency and public review of proposed final plan

HCD Concerns about scheduling RHNA Allocations to COGs A recent coordination meeting between MPO’s and ARB included HCD representatives and provided some details and examples of RHNA/RTP scheduling for Housing Elements and issues that may arise. These schedules and issues are included in Attachment 2 and summarized below. Some of these issues include the fact that RHNA allocations can be very problematic due to preparation of DOF forecasts, release dates of ACS and 2010 census data, and bunching of area housing element review s,. Uncertainty of RTP approval dates due to public input process,, frequent slippages of RTP approvals, part icularly w hen air quality conformity is involved, federal agency review (and now ARB review of GHG methodology), and RHNA appeals, increases the complexity and uncertainty of the overall scheduling process.

The actual RTP adoption date is the trigger due date for all jurisdictions within the region to update the housing element which, in turn, establishes multiple procedural due dates for the RHNA process, and for the RHNA projection period associated housing element planning period. Statutorily required updates will change from both (1) fixed dates and (2) staggered periods among regions to a variable date within 18 months of the actual RTP adoption date. Housing Element updates must be adopted at least every 8 years.

4

Other issues HCD representatives highlighted include the following:

Due dates of all subsequent RTP’s affects the RHNA projection period and HE planning period.

MPO’s can vary the target RTP adoption date at varying lengths of time before the latest possible due date.

RTP amendments are frequently made in the interim causing confusion about due dates.

RTPs are often amended more frequently than required and so it is not clear what the statutory dates are and that affects the RHNA projection period and HE planning period.

RHNA update initiated before RTP 12 month notice so change in RTP adoption date could affect RHNA milestones but these procedural dates cannot change.

The RTP covers a longer time period than RHNA so in plan development the RHNA is often the subset of RTP planning period.

RHNA distribution changes and appeals must be consistent with SCS development patterns

Attainment MPOs can elect to adopt RTP every 4 years resulting in jurisdictions updating HE every 4 years (The wording on the HCD statement seems incorrect. Every 8 years for HE updates See HCD statement on p 13).

Tentative COG RTP/RHNA updates The following table prepared by HCD is a tentative schedule of RTP and Housing Element Due dates. There are approximately 28 COGs counties (including attainment MPOs), with 115 local governments, that can elect (at any time after noticing HCD) to adopt 4-year RTP updates instead of 5-year RTP updates, delaying their housing element due dates beyond the dates shown for these MPOs and “All Others.” There is not an adequate basis to forecast the potential date implications of this election option. Draft schedules for HE due dates would result in approximately 330 (more than 60%) jurisdictions having due dates in 2013 or 2014. This concerns HCD as it would include jurisdictions within 3 of the “Big Four” or most populous MPOs, and involve approximately 900 reviews of draft and adopted elements over a constricted time period. HCD’s authorized staffing for RHNA and HE review and certification remains based on staggered RHNA and HE due dates. Housing Element updates are linked to other requirements. Local government compliance with HE due dates has implications regarding statutory compliance safe-harbor provision, statutory rezoning deadlines, eligibility for certain state-administered local assistance. Each round of HE updates requires provision of training and technical assistance, including dealing with changes in housing law, and review and certification of draft and adopted elements, by HCD. According to HCD the cumulative effect of the projected HE due dates results in a congested or bottleneck periods which will not accommodate local government compliance with the schedules, jeopardizing opportunities to use housing element compliance in competing for state grants for housing and related assistance. Change in the long-standing establishment of HE update schedules with dates certain specified in statute and staggered by region will necessitate communication of the new scheduling basis to the wide variety of stakeholders involved with HE updates.

5

Schedule of RTP & Housing Element Due dates (including non-MPO areas)

MPO # of

Juris- dictions

RTP Adoption Dates:

MPO Proposed vs. RTP Due Dates Less 30 days

in NA MPOs

HE Due Dates: Based on Proposed vs.

Latest Possible RTP Adoption Date

SANDAG 19 7/22/11 – 10/28/2011 1/21/2013 – 4/27/13

SACOG 29 12/54/2011 – 6/21/2012 6/16/2013 – 12/20/2013

SCAG 195 4/5/2012 – 5/4/2012 10/6/2013 – 11/2/2013

ABAG/MTC 109 3/1/2013 – 3/27/2013 9/1/2014 – 9/27/2014

SBCAG 9 NA 9/21/2014?

8 SJV MPOs 62 2013 - 6/30/2014 11/22/2015 – 1/22/16

AMBAG 18 NA 1/22/2016?

All others** 88 NA 9/1/2014 - ?

Statewide 537 2011 - 2014 2013 - 2016 NA: Non-attainment areas for federal air quality standards. The estimated time range in schedules identify potential HE due dates and account for uncertainty.

SANDAG and SCAG are the first COGs “off the blocks” to prepare their RTP/RHNA Plans. They have begun the RTP update process and several sample schedules are provided in the Appendix 2. Table 1, prepared by HCD, indicates the statutory provisions governing the timeline. The dates shown are illustrative of the minimum or maximum dates required by the statute, are not the actual dates proposed by SANDAG. There are many statutory timelines to meet with the potential of missing target dates due to the controversial nature of the RHNA allocation process. Part 2 of the table shows the Revision /Appeal Process, if that is necessary and that adds another 7 months to the process. The housing element adoption date does not change. Table 2 is SANDAG’s actual proposed schedule that corresponds to their proposed RTP adoption date of July 22, 2011 and Housing Element Due Date of January 1, 2013. The schedule does not note the appeal process timeline but provides for 6 months of public review. Implications of New Census and ACS Data to HCD ALLOCATION For SBCAG relevant data from the Census American Community Survey will not be available for the plan updates in 2012. The American Community Survey (ACS) 5-year sample data is scheduled to be released in early 2011 and will provide data for all the cities as well as smaller geographic levels. This data contains income, housing and other data that was previously found on the census long form questionnaire every ten years. On May 1, 2011 DOF w ill release its new “ interim” forecast based on the new 2010 Census baseline. This w ill be interim because the ref ined census data of age/sex/race (w hich impacts fert ility) w ill not be available until later so DOF w ill not release f inal project ions incorporating this more detailed information until 2012 or early 2013. HCD builds its county or region w ide RHNA estimates on this data. So the interim RHNA estimates w ill use a

6

combination of old and new data. An updated forecast could include a more conservative

future growth scenario based on where we are in the current economic cycle. SBCAG update schedule A summary of the existing and the new schedules to update the RTP and RHNA is summarized in the Figure below. TPAC members should review the estimates and provide comments at the TPAC meeting. This will enable staff to inform HCD of our expectations.

7

Current and Revised SBCAG RTP, RHNA, and HE Update Schedule

December-2003Local Housing

Element Adoption

February-2005

RTP Adoption

4-Year

RTP Cycle

December-2002

RHNA Adoption

8-YearRHNA

Needs Cycle

8-Year

Housing Element Cycle

January, 2010 SBCAG decision to

transition to 4 yr RTP and

8 yr Housing Elementupdate cycle

Regular Schedule

June, 2013

RHNA Adoption

Regular ScheduleAugust, 2014

Local Housing ElementAdoption

August,2009

Local Housing Element Adoption

October,2009RTP

Adoption

June2008

RHNA

Adoption

Regular Schedule

October, 2014RTP

Adoption

Sept, 2013

RTP

Adoption

June, 2013RHNA Adoption

August, 2014

Local Housing Element Adoption

August, 2017

RTP

Adoption

June ,2021RHNA Adoption

August, 2022

Local Housing Element

Adoption

June, 2021

RTP

Adoption

Regular 5-Year Cycle Schedule

Revised Schedule

8

Attachments

1. SBCAG Current and revised RTP, RHNA and HE update schedules

2. HCD Update Schedule Examples, SANDAG, SCAG, and discussion of issues

9

Attachment 1, Table 1 HCD Example of RTP/SCS - RHNA/HE Statutory Timeline: Beginning with SANDAG RTP Date

Step

When (minimum or maximum

statutory allowance)

Statutory Reference

Date per Target

Latest Potential

RTP Adoption

RHNA per RTP Adoption Deadline 4 yrs. less 30 days from previous FHWA conformity effectiveness*

USC Title 23, Ch 1, 134(i)

11/10/2011

1

MPO Notifies HCD and Caltrans of RTP Adoption Date (triggering HE Due Date)

At least 12 mos. prior to proposed RTP adoption date (1)

GC 65588(e)(5)

7/21/2010

10/27/2010

2** HCD issues RHNA Determination

At least 24 mos. prior to HE Due Date

GC 65584 (b) & (c) GC 65584.02(a)(1)

1/22/2011

4/28/2011

3 COG surveys jurisdictions to develop proposed methodology and RHNA

At least 2 years prior to HE due date

GC 65584.04(a) 1/22/2011 4/28/2011

4

COG/MPO releases DRAFT RTP w/SCS accommodating RHNA

Not less than 55 days prior to RTP adoption

GC 65080(b)(2)(F)(iv)

5/27/2011

9/2/2011

5 COG RTP Adoption Date & submittal to FWHA for conformity review, CARB

No later than 11/10/2011

USC Title 23, Ch 1, 134(i)

7/22/2011

10/28/2011

6

COG distributes RHNA draft Allocations

At least 1 and ½ years prior to Element due date

GC 65584.05 (a)

7/22/2011

10/27/2011

7

Jurisdictions may request revision of Draft RHNA Allocations (Public Comment Period)

Within 60 days of receiving draft allocation

GC 65584.05 (b)

9/20/2011

12/26/2011

If NO request for appeal or revision is received or revisions are accepted and incorporated, CONTINUE TO STEP 8 If request is received for APPEAL or revision, SKIP STEPS 8 & 9 AND GO TO APPEALS STEP “1”

8 COG adopts Final RHNA consistent with development pattern of SCS

Following the conclusion of 60 days public comment period

GC 65584.04(h) 9/23/2011

12/23/2011

9 HCD reviews and approves final RHNA

Within 60 days after receipt (9 plus 3 days)

GC 65584.05(h) 11/26/2011 2/26/2012

* ** see notes at end of table on next page

10

(Table 1 continued)

RHNA REVISION & APPEALS PROCESS

When (Min. or Max. statutory

allowance

Statutory Reference

Dates per

Target

Dates per Latest RTP Adoption

Housing Element Due Date

Within 18 mos. of RTP adoption date

GC 65588(e)(2)

1/21/2013

4/27/2013 ***

Step Revision/Appeal Process

1

COG accepts/adjusts/ rejects the revision requests

Within 60 days after request submitted

GC 65584.05(c)

11/19/2011

2/24/2012

2

Jurisdictions may APPEAL (revised) Draft RHNA

By appeal filing due date (about 45 days before

Hearing) allowing 10-day notice of Hearing date set

30-35 days from notice

GC 65584.05(d)&(e)

11/23/2011

4/23/2012

3

COG responds TO APPEALS of Draft RHNA and holds hearings

Within 60 days of appeal filing due date

GC 65584.05(e)

3/17/2012

4/23/2012

4

COG issues proposed FINAL RHNA Plan Concurrent with Response

Within 45 days of completion of 60-day

hearing

GC 65584.05(f)&(h)

5/1/2012

6/22/2012

5

COG Adopts Final RHNA Allocation Plan Within 45 days of issuing proposed final RHNA

but no later than 1 year prior to H.E. due date

GC 65584.05(h) GC 65584(b)

6/15/2012 1/21/2012

8/6/2012 4/26/2012

6 HCD review/approval of Final RHNA Plan after revisions/appeals*

Within 60 days

GC 65584.05(h)

6/30/2012

10/5/2012

7 Housing Element Due Date

Within 18 mos. of RTP adoption date

GC 65588(e)(2)

1/21/2013

4/27/2013

Notes: * Per CFR 23 Sec. 450.322, the effective date of the RTP is the date of the conformity finding by the FHWA, and the FHWA conformity review is 30 days. ** HCD date for RHNA issuance could be delayed 60 days by HCD for critical population or housing data from Census Bureau or DOF (65584(c)), resulting in Extending RHNA process and HE due dates same number of days. HCD’s Final Determination could also be up to 75 days later if an objection is filed by the COG pursuant to 65584.01(d), but this would not extend the RHNA process timeline or the HE due date. *** Housing Element due date could occur as late as April 27,2013, a 3-month variation – awkward and confusing for local governments.

11

Attachment 1 Continued

Table 2 - Key Dates for SANDAG Regional Housing Needs Assessment (RHNA)

Fifth Housing Element Update

July 9, 2010

Feb 2010 SANDAG Board accepts 2050 Regional Growth Forecast for planning purposes for

use in preparing the 2050 Regional Transportation Plan (RTP), Sustainable

Communities Strategy (SCS), and RHNA.

(The California Department of Finance (DOF) and Department of Housing and

Community Development (HCD) staff participated in SANDAG’s forecast advisory

group.)

January 1, 2010 Eleven-year RHNA projection period for fifth housing element cycle starts (January

1, 2010 – December 31, 2020)

May 1, 2010 DOF issues 2010 E-5 estimates used in RHNA consultation process; SANDAG

and HCD continue consultation started during development of 2050 Regional

Growth Forecast

May – Dec 2010 Regional Planning Technical Working Group (TWG) and Regional Housing

Working Group (RHWG) develop RHNA methodology

June 10, 2010 Joint TWG/RHWG meeting to kick off RHNA methodology discussion: RHNA

background, schedule, and principles

Jul 2010 HCD provides SANDAG with regional housing need determination for RHNA

projection period: January 1, 2010 – December 31, 2020 (11 years) (The SANDAG

2050 Regional Growth Forecast projects an additional 127,000 housing units

during the 11-year RHNA projection period.)

July 9, 2010 SANDAG Board of Directors holds policy meeting to discuss RHNA

July 23, 2010 SANDAG provides HCD and Caltrans date of expected adoption of 2050 RTP in

writing as required by SB 575

Jul – Dec 2010 TWG and RHWG prepare draft jurisdiction/income RHNA allocations based on

RHNA methodology

Feb 2011 Draft of RTP/SCS/RHNA accepted for distribution/public review

July 22, 2011 Final RTP/SCS/RHNA adopted

January 21, 2013 Due date for January 1, 2013 – December 31, 2020 (8 year) housing elements due

within 18 months after RTP is adopted)*

*Housing elements are due every four years for:

1. Jurisdictions that did not adopt their fourth housing element revisions by January 1, 2009, and did not adopt the fourth

revision by March 31, 2010, and complete any rezoning contained in the housing element program by

June 30, 2010; and

2. Jurisdictions that do not adopt their housing element within 120 days from next housing element due date.

Attachment 1 Continued HCD Issues with SANDAG RHNA/Housing Element Schedules

SBCAG Summary Underlined

Uncertainty re: RTP Adoption Dates Due dates of all subsequent RTP’s affects RHNA projection period and HE planning period.

The due date of not only the next, but the subsequent RTP adoption dates (i.e. the one approximately 8 years later), is material to determination of the RHNA projection period and HE planning period, as the HE planning period is determined by the period between HE due dates.

MPO’s can vary the target RTP adoption date at varying lengths of time before the latest possible due date. RTP amendments are frequently made in the interim causing confusion about due dates.

While the 4-year and 5-year time periods are maximum time periods between RTP updates, MPO’s schedule (target) their RTP adoption date at varying lengths of time in advance of the latest possible due date (allowing for federal 30-day review). Aside from the variability of how much time before the 4 or 5 year federal due date for RTP updates, other amendments of RTPs are frequently made in the interim. Thus, there is potential for confusion over the due date of statutorily-required RHNA-SCS integration is to be for all MPOs.

RTPs are often amended more frequently than required and so it is not clear what the statutory dates are and that affects the RHNA projection period and HE planning period.

Because RTPs are often amended by MPOs more frequently than the statutorily-required minimum of every 4 or 5 years, it is not clear what the dates of the statutorily required RHNA-SCS integration is to be for all MPOs. The due date of the subsequent RTP adoption dates (i.e., two four-year RTP update or roughly 8 years after the first SCS’RHNA integration) is material to determination of the RHNA projection period and HE planning period, as the HE planning period is determined by the period between HE due dates and defines the end of the RHNA projection period.

RHNA update initiated before RTP 12 month notice so change in RTP adoption date could affect RHNA milestones but these procedural dates cannot change.

The actual adoption date of RTPs has commonly been delayed from the initially scheduled planned or target adoption date, and can continue to be expected to occur, despite the advance noticing requirement. As the RHNA determination process is required to be initiated as early as 26 months prior to the HE due date in COG using subregional delegation, it will be initiated in advance of the notice MPOs are required to provide HCD and Caltrans 12 months in advance of their planned or target RTP adoption date. Although a change in the “actual” RTP adoption date would change the housing element due date (required 18 months from adoption), certain procedural dates within the RHNA process, e.g. HCD determination, time parameters for revision/appeals of the Draft allocations, would not change. If there was to be delay of several months, the end date of an HE planning period would in effect be changed, implicating the need to consider this possibility in determining the RHNA projection period.

13

Time and process to accommodate SCS/RHNA integration The RTP covers a longer time period than RHNA so in plan development the RHNA is a subset of RTP planning period.

The RHNA and the RTP’s Sustainable Communities Strategy (SCS) must be considered relative to each other. The MPO may schedule release of the draft RTP/SCS at the same time, to enable demonstration of accommodating the RHNA and the RHNA’s consistency with the proposed SCS development pattern. With a minimum twenty year horizon, the RTP covers a much longer time period than the RHNA’s projection period; in SANDAG’s case for example, the RHNA projection period ends at the end of 2020, while their RTP horizon extends to 2050, thus necessitating identifying the RHNA projection period as a subset of the RTP planning period.

RHNA distribution changes and appeals must be consistent with SCS development patterns

Even with a concurrent draft RHNA and SCS, significant changes to the distribution of the RHNA as a result of both the RHNA revision and appeals processes must be considered in conjunction with the SCS to enable the MPO to find the final RHNA consistent with the development pattern of the SCS, as required by GC 65584.04(i): As an example of the potential impact of a RHNA distribution change, if the resolution of an appeal resulted in adjusting allocation of the draft RHNA, statute requires if adjustments of a proposed RHNA plan total seven percent or less of the total RHNA for the region (or the total for the subregion in the case of subregional delegation), then the COG is to distribute the adjustments proportionally to all of the local governments in the region (or subregion if applicable) (GC 65584.05(g)). Adjustments exceeding seven percent require development of a redistribution methodology; the total RHNA for the region cannot be reduced.

This or other significant redistribution of RHNAs within the region could affect the corresponding period of the RTP planning period.

Attainment MPO’s can elect to adopt RTP every 4 years resulting in jurisdictions updating HE every 4 years

MPOs (except those with non-attainment areas) can elect to adopt an RTP every four (4) years (GC 65080(b)(2)(M)) resulting in jurisdictions updating HEs every 4 years, thus shortening planning periods and necessitating updates twice in one RHNA projection period. This is an untested prospect of variability in RHNAs and determination of RHNAs in off-cycles that will impact all entities involved (State, MPOs, and especially local governments, resulting in more updates and shorter time periods to implement goals/policies, and actions such as rezoning). (SBCAG understands the HE updates would be every 8 years)