That the City Council receive and file the Annual Report on the implementation of the City of La Habra General Plan for calendar year 2022, and authorize the Director of Community and Economic Development to forward the document to the Governor's Office of Planning and Research and the Department of Housing and Community Development per Government Code Section 65400.

California ("State") law requires every city and county in the state of California to prepare and adopt a comprehensive, long-term general plan for the physical development of said city or county. Policy and project decisions made by the City Council and Planning Commission as well as projects that are initiated by City Departments, such as, land use approvals, zoning code updates, subdivision, City projects and programs as well as Capital Improvement Projects, must be consistent with the goals and policies contained within the general plan.

On January 21, 2014, the City Council adopted a comprehensive update to its general plan, referred to as "La Habra General Plan 2035."  State law requires the general plan to include the following elements: Land Use, Circulation, Housing, Conservation, Open Space, Noise, Safety, and Environmental Justice. While State law refers to the required content as “elements,” the La Habra General Plan 2035 refers and organizes these required elements as “chapters.” The La Habra General Plan 2035 includes the required elements within the following chapters of the general plan: Introduction, Community Development, Mobility/Circulation, Infrastructure, Community Services, Conservation/Natural Resources, Community Safety, and Implementation Manual. Although Housing goals and policies are included in the Community Development chapter of the general plan, because of State law requirements to update the Housing Element every eight years, and the comprehensive nature of the State law requirements for technical analysis of housing conditions and needs, the complete text of the Housing Element is bound in a separate volume of the General Plan. 

On September 19, 2022, the City Council adopted the City of La Habra's 2021-2029 Housing Element and found it to be in substantial compliance with State law. The following day, the City submitted the adopted Housing Element to the State Department of Housing and Community Development (HCD) for review and certification. HCD sent a letter to the City dated November 15, 2022, identifying additional technical and clerical refinements that would be necessary to fully comply with State law. HCD did not express any disagreement with the City Council’s finding that the Housing Element substantially complies with State law.  Although the City Council made a finding of substantial compliance in its adoption of the Housing Element, it has always been the City's intent to address all of HCD's comments and receive HCD certification. To ensure that the City was on the right path, City staff reached out to HCD after receiving the November comment letter, and after several e-mails and two subsequent meetings with HCD staff, on February 22, 2023, the City submitted responses to the November HCD comment letter, along with a technical and clerical refinements to the adopted Housing Element. City staff and legal counsel believe the Housing Element now fully complies with state law, and that HCD should certify that compliance. HCD has 60 days to review these documents from the date they were submitted by the City.

Pursuant to Government Code Section 65400(a)(2), all cities and counties in California must submit to their legislative bodies an annual report on the progress made in the implementation of the goals and policies contained within the General Plan to the Governor's Office of Planning and Research (OPR) and HCD. The annual report gives OPR the opportunity to identify statewide trends in land use decision-making and local planning and development activities relate to statewide planning goals and policies. Providing a copy of the annual report to HCD fulfills the statutory requirement to report the local agency’s progress in accommodating its share of the Regional Housing Needs Assessment (RHNA) and removing governmental constraints to the development of housing. The City's annual report is provided as Attachment 1 to this staff report. 

The annual report tracks progress using the Implementation Manual, adopted as Chapter 8 of the La Habra General Plan 2035. This Manual arranges goals and policies into sections that are based on the timing of when they should be considered for implementation. Sections include “Near Term Implementation” (to be done within five years), “Annual Implementation” (to be done yearly), “Continuing Implementation” (done continuously), “Periodic Implementation” (done based on specified timelines) and “Mid- to Long-Term Implementation” (done after five years). Within each program, policy objectives are identified along with the implementing department. As detailed in Attachment 1, the City has nearly completed all goals and policies that require near term implementation and made significant headway on goals and policies with periodic and/or extended timelines. Staff recommends the submittal of this document to OPR to fulfill the City's annual reporting requirements for its general plan. 

Section VII of the annual report provides an update on the City's progress towards implementing its Housing Element, using forms provided by HCD, designed to ensure standardized electronic reporting to HCD. The City is on its second year of the 6th Housing Element Cycle which runs from October 2021 through October 2029. One of the key metrics analyzed is the number of housing units that the City has accommodated through the issuance of building permits in comparison to its Regional Housing Needs Assessment (RHNA) allocation. For the 6th Housing Element Cycle, the Southern California Association of Governments (SCAG) assigned the City of La Habra a RHNA allocation of 804 units. Below is a breakdown of the RHNA allocation by affordability level, as well as the number of dwelling units that have received building permits and/or been constructed during the first two years of the 6th Housing Cycle.  The table does not reflect an additional 117 housing units that will be developed by the Olson Company at 251-351 Imperial Highway, including 12 units affordable to moderate income households, which were approved by the Planning Commission in 2022, but have not yet received building permits. 

As shown in the table above, in 2022, a total of 56 housing units received building permits and/or were constructed in 2022. The units that are shown within the Very Low and Low Income categories represent Accessory Dwelling Units (ADUs). In order to determine the affordability of these units, staff surveys the property owners to determine the rents that are anticipated for the units. If staff does not receive a response to this survey, staff uses the default category of "Low Income" because HCD has identified the development of ADUs as “Naturally Occurring Affordable Housing (NOAH)." The remaining 12 housing units that received building permits and/or were constructed in 2022 reflect multifamily units that will not be restricted to moderate or lower income households; and, therefore by default, are classified as "Above Moderate Income" units. To date, no projects have been approved under the City's Inclusionary Housing Ordinance; however, there are pending project applications that would be subject to the ordinance, if approved. Staff recommends the submittal of the Annual Report, including electronic submittal of the information included in Section VII of the on the forms provided by HCD, to HCD, to fulfill State law requirements related to reporting the City's progress on implementing its 6th Cycle the Housing Element.

The Annual Report is a summary of activities undertaken by the City that relate directly to the goals and policies of General Plan 2035. The staff time and cost to prepare this report is funded through the Department’s normal adopted operating budget for Fiscal Year 2022/2023.

The Annual Report demonstrates the City's progress towards the implementation of the La Habra General Plan and is consistent with City Council Goal 5: Development Activity and Business Assistance, Objective M: Update, implement and provide annual performance reports for the General Plan in compliance with State law, and Objective Q: Facilitate the development of high-quality housing, at a variety of income levels, to help meet projected demand, as set forth in the Regional Housing Needs Assessment (RHNA).