That the City Council review, approve and authorize staff to forward the City's Revised Draft 2021-2029 Housing Element to the California Department of Housing and Community Development (HCD) for review and certification.

On July 26, 2021, the Planning Commission held a public hearing on the 2021-2029 draft Housing Element ("Element"), which had been posted on the City's website for more than 30 days prior to the Planning Commission hearing. At that time no one addressed the Commission either for or against the proposed Element's contents; however, a letter was sent to the City by the Kennedy Commission commenting on the draft Element. Staff noted that they had reviewed the comments in the letter and that the issues raised were already addressed in the draft Element. The Commission also reviewed the letter and did not have any questions or suggested modifications to the Element. 

The Commission's discussion centered on the use of Accessory Dwelling Units (ADU) as part of a strategy for the City to help meet its Regional Housing Need Assessment (RHNA) allocation to facilitate the development of 804 new housing units. There was concern that the 400 ADUs projected to occur over the next eight years was unrealistically high and that HCD would reject the City's draft Housing Element. There was also discussion regarding the proportionality between the level of ADUs and the overall RHNA numbers. Staff noted that there was flexibility, based on the numbers of units identified in the other categories, that would give the City the overall potential to meet its RHNA obligation.

The Commission passed a resolution recommending that the City Council approve the draft Element and forward it to HCD for review and comment. The City Council held a duly noticed public hearing on August 16, 2021, to review the draft Element and take public comments. The City Council was also in receipt of the Kennedy Commission letter and had an opportunity to review it before the public hearing started and had no comments or questions.

The City Council discussed the RHNA numbers in general terms and there was a question about whether the recently adopted Inclusionary Housing Ordinance was a constraint to housing development. There were no additional concerns raised by the City Council and, when the public hearing was opened, there was no public comment. The draft Element had been posted on the City's website and notices were sent to all those who participated in the General Plan Advisory Committee (GPAC) meeting, which included the GPAC members, housing advocacy groups and interested residents.
Subsequently, City Council authorized staff to forward the draft Element to HCD, which staff did on September 2, 2021. Pursuant to State regulation, HCD was required to respond within 60 days. A comment letter from HCD was received by staff on November 1, 2021.

Within the five county SCAG region, there are 197 jurisdictions, all of which are required to secure certification and adoption of their updated Housing Elements, within the same time period, as mandated by State law. As of the writing of this report, only six jurisdictions have Housing Elements that have been certified by HCD as compliant with State law: Duarte, San Gabriel, Westlake Village, Wildomar, Victorville, and Ventura County. According to HCD staff, the most common overarching issues resulting in non-compliant Elements thus far have been:

While the comments in the letter sent by HCD to the City of La Habra touch on most of these issues to some extent, the primary areas of concern raised by HCD were: ADU projections, feasibility of the sites identified to meet the City's RHNA allocation, concerns with regulatory constraints to housing development, and compliance with “Affirmatively Furthering Fair Housing” requirements.  The comments provided by HCD primally asked for more information and analysis. Staff has addressed the comments as noted below. In addition, attached to this report is a memorandum from the City's consultant (PlaceWorks) that provides a cross-reference between the HCD comment letter and the draft Element, which specifically identifies where in the draft document staff has addressed all of HCD's comments. Changes made in the revised Element have been highlighted in red for ease of identification.

HCD noted that its ADU records did not match the City’s data in regard to the number of ADUs that had actually been built over the last few years. Staff has reviewed the City's records and determined that there were some errors in the number of units that staff had previously reported to the State. Staff corrected those reports and provided HCD with updated information. Additionally, upon further analysis, staff has determined that the City's ADU production is anticipated to range from 35 to 50 units annually over the 2021-2029 period, yielding a conservative estimate of 300 units, rather than the original projection of 400 units.

HCD raised concerns about the development feasibility of the sites that the City had identified to accommodate its RHNA allocation and requested further justification of the City's site selection process. To address this concern, staff updated the Element to clarify the criteria that staff used when selecting the sites and provide examples of similar sites that had recently been developed in the City with housing. The following criteria was used for site selection:

Table HE-4.2 (Housing Production/Planning Credits) below, shows the projects that have already been approved or are in the entitlement process since the start of the 6th cycle, which began on July 1, 2021. The construction of these units would meet nearly 50% of the City's total RHNA allocation (804 units required), would exceed the City's RHNA allocation for the moderate income category (130 units required), and would result in accommodating 67% of the number of units needed for the above moderate income category (452 units required). Based on activity to date, staff is confident that the City could meet the balance of its RHNA allocation over the remaining seven years of the 6th cycle period. As indicated in Table HE-4.6 (Summary of RHNA Strategy) below, units identified for lower income households will come from ADUs (300 units now projected) and the development of sites identified in Table 4-4 (RHNA Production and Sites Credit) of the Element. In addition, this table does not take into account the City's 15% Inclusionary Housing Ordinance, which would potentially yield additional affordable units, not quantified through the sites inventory or ADUs. Overall, staff has planned for a total of 1,141 units for the 2021-2029 period to provide a buffer, in the event that the identified sites do not get developed at the densities permitted by the General Plan, La Habra Municipal Code (LHMC) and/or State law.

There are a number of comments in the HCD letter about whether the regulatory requirements of the LHMC impede the development of housing units.  As part of the adoption of the Housing Element, Council will also be asked to consider several zoning code amendments that, if adopted, would bring the LHMC into compliance with State law. These amendments are noted throughout the draft Element; and, staff believes that these amendments will address HCD's concerns about regulatory constraints to Housing Development. 

AFFH is the newest and most complex area of State Housing Element law. The guidelines that HCD has provided for compliance with State law AFFH requirements are overly broad and difficult for staff to interpret into meaningful analysis and policy recommendations. The overarching theme of AFFH is that all people should have equal access to safe housing and services, which should be distributed throughout the city, and not concentrated in specific areas. The City of La Habra has been progressive in the area of providing housing and social services for disadvantaged people for many decades with efforts by not just the City by also by the many non-profit organizations that support the community in the City of La Habra. Staff has added a substantial amount of information to the draft Element to demonstrate La Habra's commitment to AFFH.

As described above, staff believes that revised draft Housing Element addresses HCD's comments; and therefore, recommends that Council approve the revised draft Element and authorize staff to forward it to HCD for their review and certification. Assuming that HCD has no additional comments and certifies the City's revised Element, staff will schedule a public hearing so that Council can take action to adopt the final, certified Element.

The consultant costs associated with the update of the Housing Element have been funded by an SB 2 Grant; City staff costs are included in the General Fund budget for the Community and Economic Development Department.

California law requires that all local governments develop housing programs to meet their "fair share" of existing and future housing needs for all income groups. La Habra, along with all local governments in California, must prepare a Housing Element to meet its local housing needs. The Housing Element must contain proactive goals, policies, and programs to facilitate the development, improvement, and preservation of housing commensurate with their housing need as established by the City, regional government, and the State of California.

This Housing Element covers the planning period of 2021-2029. Requirements for the content of the Housing Element are found in Article 10.6 of Chapter 3 of Planning and Zoning Law, commencing with Government Code Section 65580. Housing Elements are the most complex chapter in the General Plan, and the only element that is required to be completely updated on a fixed schedule and subject to receiving a letter of compliance from the state of California.