May 4 zoom — RHNA BASICS

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The audits were requested due to wide distrust and the number o cities filing appeals.

What they reviewed:

• Whether HCD followed statutory procedures.

• Whether DOF provided projections.

• Whether regional agencies ran appeals.

What they did not review:

• Whether RHNA numbers are empirically realistic.

• Whether California can finance, staff, or build at those levels.

• Whether targets match actual population trends

Cities are now penalized if housing is not built,

even though only private developers control whether projects pencil out.

State law assigns responsibility for market outcomes to governments that do not control land prices, labor, interest rates, or capital flows.

All cities will likely fail their mid cycle reviews. What kind of legitimate test has a 100% failure rate? 

This is not planning.

It is regulatory wishful thinking

HCD MADE NO CHANGES IN RESPONSE TO THE AUDITS.

THE CORE QUESTION CALIFORNIA REFUSES TO ANSWER:

If California’s population will remain flat:

Who exactly are the 2.5 million new homes for?

Full letter here:

https://legaudit.assembly.ca.gov/sites/legaudit.assembly.ca.gov/files/Regional%20Housing%20Needs%20Determination%20Process%20%28Sen.%20Glazer%29.pdf

Full report here:  https://information.auditor.ca.gov/reports/2021-125/index.html

The Embarcadero Report on Double Counting that the Audit was based on:

https://embarcaderoinstitute.com/portfolio-items/double-counting-in-the-latest-housing-needs-assessment/

Charts and essence of report:

https://embarcaderoinstitute.com/wp-content/uploads/2020/09/Double-counting-in-the-Latest-Housing-Needs-Assessment-Sept-2020.pdf

Full letter here:

https://legaudit.legislature.ca.gov/sites/legaudit.assembly.ca.gov/files/2024-109%20%28Sen%20Glazer%29%20HCD—Housing%20Elements_Signature%20Redacted.pdf

Full report here:

https://www.auditor.ca.gov/reports/responses-2024-109-all/ 

HCD reply here: 

https://www.hcd.ca.gov/about-hcd/newsroom/ca-state-auditor-finds-hcd-meets-deadlines-housing-element-reviews-and-provides-jurisdictions-consistent-detailed-feedback-and-guidance

“As directed by the Joint Legislative Audit Committee, my office evaluated the Regional Housing Needs Assessment …Overall, our audit determined that HCD does not ensure that its needs assessments are accurate and adequately supported…This insufficient oversight and lack of support for its considerations risks eroding public confidence…“

The HCD has stood firm; this paper submitted in support of the RHNA acknowledges that the numbers were ad-hoc, model-based.

Background Paper for Audit of Regional Housing Needs Determination Process
Elmendorf et. al. Cover Letter:
https://law.ucdavis.edu/sites/g/files/dgvnsk10866/files/inline-files/RHNA-Audit-Cover-Letter-2022.01.04_0.pdf

Elmendorf et. al. Report:

https://law.ucdavis.edu/sites/g/files/dgvnsk10866/files/inline-files/RHNA-Audit-Background-Paper-2021.01.04.pdf

JULY 2023: California Department of Finance releases official population projections showing practically flat growth through 2060. Needs assessment must be based on official  population projections. They are not. . 

On the Department of Finance Report

https://marinpost.org/blog/2023/1/9/rhna-abag-demographic-projections-are-way-off

https://www.marinij.com/2022/04/18/marin-critics-of-housing-mandates-tout-auditors-findings/  

https://www.mercurynews.com/2023/07/26/california-exodus-state-population-projected-to-remain-the-same-through-2060/

https://www.globest.com/2023/07/28/california-projects-zero-population-growth-through-2060/

Sample of a rejected RHNA appeal based on changed conditions: Mill Valley:

 https://abag.ca.gov/sites/default/files/documents/2021-07/2023-2031_RHNA_Appeal_City_of_Mill_Valley.pdf

https://marinpost.org/blog/2023/10/5/sacramento-has-a-long-history-of-overestimating-population-growth?query=Gaetan+lion§ion=blog

More:
https://marinpost.org/blog/2023/11/29/does-sacramento-housing-existing-need-even-exist?query=Gaetan+lion§ion=blog 

“HCD interprets the housing element law and determines whether local jurisdictions’ housing elements substantially comply with it. HCD then issues findings letters to local jurisdictions to notify them of its compliance determination, but the law does not require these letters to provide prescriptive instruction for achieving compliance.”

“Staff availability during its peak workload constrained HCD’s ability to provide important individualized assistance to local jurisdictions. Even with HCD’s comprehensive training program for new reviewers and reliance on experienced secondary reviewers to ensure consistency, turnover and overlapping submission deadlines have strained its capacity.“

“The complexity of new legal requirements, increased housing allocations, and community resistance to new development, mean that most local jurisdictions required multiple submissions and significant time to achieve compliance during the sixth housing element cycle. … Although HCD offers detailed online guidance to help jurisdictions, it did not always release this guidance in a timely manner.”

California's Density Bonus Law (Government Code §65915) requires cities to award additional units above their base zoning to any developer who includes a qualifying affordable set-aside. The bonus is calculated as a percentage of the base density:

• Setting aside 5% of base units as very-low income earns a 20% density bonus

• Setting aside 15% of base units as very-low income earns a 50% density bonus

• Setting aside 15% very-low income plus 15% moderate income (under AB 1287, effective 2024) earns a 100% density bonus — doubling the total project

• A 100% affordable project earns an 80% density bonus

• Enhanced Density & Height Limits (AB 1763/AB 2334) For projects that are 100% affordable to lower-income households, being within a half-mile of a major transit stop provides:

No Maximum Density Limits: Local governments cannot impose a density limit on these projects.

Increased Height: The project is entitled to a height increase of up to three stories or 33 feet. 

Elimination of Parking MinimumsFor projects within a half-mile of a major transit stop, the DBL provides special parking exemptions: 

Zero Parking Requirement: For 100% affordable rental projects (with specified exceptions), the city must allow no parking spaces if requested.

Reduced Parking: For mixed-income projects, the minimum requirement can be lowered to 0.5 spaces per unit. 

Increased Incentives and Concessions Projects that are 100% affordable to lower-income households within a half-mile of a major transit stop (or in a low VMT area) are eligible for: 

Up to Five Incentives/Concessions: These help developers override other development standards, such as set-backs or square footage requirements.

The Bonus Units Are All Market-Rate

This is the critical mechanical point that has been almost completely absent from the policy conversation: the bonus units added by the density bonus law are entirely market-rate. The affordable set-aside is calculated as a percentage of the base density. The bonus units sit on top of that base. Not a single bonus unit is affordable.

SB 79: The New "Transit-Oriented Development" Act (Eff. 7/1/2026) 

SB 79 strengthens these rules by creating state-mandated minimum zoning standards within a half-mile of high-quality transit stops (e.g., BART, Caltrain, subway lines, major BRT lines): 

Density/Height Floor: Local governments cannot restrict density or height below specific thresholds.

Tier 1 Stations (0.25 mile): Up to 9 stories permitted (75 feet).

Tier 1 Stations (0.25 to 0.5 mile): Up to 6-7 stories permitted (65 feet).

Adjacency Bonuses: Projects within 200 feet of a transit station pedestrian access point may get an additional 20 feet of height and an additional 40 units per acre. 

Definition of "Major Transit Stop"To qualify for these benefits, the site must be within 0.5 miles of a: 

Existing rail or bus rapid transit station.

Ferry terminal served by bus or rail.

Intersection of two or more major bus routes with a frequency of service interval of 15 minutes or less during morning/afternoon peak commute periods. 

Note: The laws regarding density bonuses are updated frequently, with SB 79 officially shifting to a state-mandated, higher density requirement for these areas in mid-2026.

California’s Density Bonus Law (Gov. Code §§65915–65918) provides developers with a 20% density increase for senior citizen housing projects (35+ units) to incentivize affordable, age-restricted development. These projects can receive concessions (e.g., reduced parking, height waivers) and, as of 2024, now include residential care facilities for the elderly. 

Qualification: Projects must meet senior housing definitions (typically 35+ units, age 62+ or 55+ in at least one unit).

Bonus Amount: Qualified senior projects are generally entitled to a 20% increase in density.

Types of Senior Projects: This applies to independent living, assisted living, and residential care facilities for the elderly.

Incentives & Concessions: Projects may receive reductions in development standards, such as fewer parking requirements or reduced setbacks, to make the project financially feasible.

Affordable Senior Units: If a senior project also provides units for lower-income households, it may qualify for higher, tiered density bonuses (up to 50% or higher, depending on the percentage of affordability).

For detailed information on implementing these, refer to the Association of Bay Area Governments' Density Bonus Model Program Guidelines or review the San Francisco Planning Department's Guidance on State Density Bonus Law. Limitations

Exclusion: The 20% senior bonus often cannot be combined with the bonus for lower-income households; however, developers can choose to apply the more beneficial affordable housing formula.

Local Compliance: Local governments cannot refuse to grant a density bonus if the statutory criteria are met, and they are required to allow for incentives, concessions, and waivers. 

For a broader, legal overview of the law, see the Meyers | Nave Guide to the California Density Bonus Law. 

Declaring a “housing crisis at all levels" has allowed our state government to focus on market rate housing while ignoring the real needs of Californians -- homes regular people can afford. Our policy creates housing by  giving private for profit developers unimpeded rights in our communities to build out of scale  projects at market rate, by adding a small percentage of “affordable” units. 

Using an unsubstantiated claim that the California will grow by 7.5 million residents by 2031,  2.5 million units of new housing have been distributed statewide, one size fits all, requiring about 15% growth per city, regardless of circumstance. The California Department of Finance projects a stable population out to 2060. This is ignored. 

Blamed for lack of housing and high prices, cities have been stripped of the ability to control zoning and planning, regardless of whether this is true. Stewardship is out. Private industry, unfettered, is now the arbiter of how a city will grow. Hundreds of new laws give cities no leeway to use discretion and knowledge of local condition. 

Cities that don’t comply fast enough by upzoning every area for housing density, or not approving unwise developments quickly  can be sued, fined, and lose the last shreds of control they have left in planning for livability and safety. The state has a Housing Strike Force to carry these threats out, as if cities were criminals.

Policy favors density, and the for-profit industry is rewarded with automatic approval of out of scale projects. Density bonuses, elimination of height, mass, and setback restrictions are just some of the perks offered. On-site parking requirements are eliminated, forcing cars to the street.

Aesthetics are out — too subjective. Only objective standards apply. Historic buildings can be replaced by faceless stack and pack monstrosities. Neighborhood character — the literal existing built environment — is derided as exclusionary. Developers are encouraged to break up long-standing communities carefully developed over time as if they have no value. 

Single family neighborhoods are legislated away, and towering developments can stand between homes. Instead of helping create ownership opportunities at affordable scale, existing single family homes are demonized as "racist," although people of all races want aceess to them. Homeownership is key for a better future for all people, but it’s going away — replaced by a permanent rental society. 

Planning, impact studies, and our local democracy are at stake. State overreach  silences residents and their elected officials, who are often forced to approve terrible projects. Site poles have been eliminated, along with public noticing. You won’t know a project’s going up until construction begins. 

Environmental studies are blamed as holding up progress. The California Environmental Quality Act (CEQA), which has safeguarded so much, is being eliminated. The Coastal Commission is blamed for lack of affordable housing along our fragile coastline, even though their ability to approve it ended in the 1980’s. If we don't fight, our beautiful coastal will turn into Miami Beach.