On October 26, 2023, the City Council adopted Newark’s 6th Cycle Housing Element after a robust community and stakeholder engagement process and presentation to the Planning Commission (Attachment 4). Subsequently, HCD certified the City’s Housing Element on December 21, 2023, finding it in compliance with state law. The Housing Element consists of two primary components, the first being an evaluation of the City’s RHNA targets, and the second being the goals, policies and programs that the City has identified to achieve its RHNA production goals and otherwise meet the housing needs of all members of the community.
The City has reported its Housing Element progress to HCD and LCI in the form of an APR each year since 2017 for the 2015-2023 (5th Cycle) Housing Element and has already submitted reports for the first three years of the 6th Cycle, including the APR for 2025.
RHNA Allocation Process
A key component of the APR is to provide data on overall housing production and affordability within a jurisdiction. This information helps determine whether jurisdictions are on track to meet the state-mandated target number of housing units to plan for in their communities. This target is called the Regional Housing Needs Allocation, or RHNA. RHNA is based on estimates from the State Department of Finance (DOF), which projects how many homes will be needed to accommodate projected population growth during the planning period and to address existing housing shortages and affordability across all income levels. DOF establishes the total housing need for each region in California. That need is then distributed by the region’s Council of Governments (COG) to individual cities and counties. In the San Francisco Bay Area, the Association of Bay Area Governments (ABAG) serves as the COG and is responsible for assigning RHNA targets to each local jurisdiction.
The Bay Area is currently in the 6th Cycle Housing Element planning period which accounts for years 2023-2031. Newark’s 6th Cycle RHNA target is 1,874 new homes. This is significantly higher than the City’s 5th Cycle RHNA target of 1,078 homes, but still approximately 600 fewer homes than the 2,146 units the City actually permitted in the 5th Cycle. Table 1 in Attachment 2 (Housing APR Data Visualization) summarizes Newark’s 6th Cycle RHNA by income band and compares it to the City’s 5th Cycle RHNA achievements.
Housing units counted toward RHNA are reported in the APR using detailed project information, including addresses, permit numbers, dates of completed application submittals, issued entitlements, issued and finaled building permits, affordability levels, housing tenure, and whether the project used any streamlining provisions. All data is reported for the calendar year, covering the period from January 1 to December 31. HCD publishes a data dashboard visualizing APRs from all local jurisdictions at www.hcd.ca.gov/housing-open-data-tools/apr-dashboard.
State law is primarily concerned with the number of building permits a jurisdiction issues, however, as that signals actual housing production activity contributing toward the City’s RHNA target. State laws such as Senate Bill 423 (2023, formerly known as SB 35), for example, allows mixed-income housing projects to opt in to a streamlined ministerial approval process (SMAP) in jurisdictions that have not met their RHNA targets. Newark is currently subject to SMAP because it did not achieve its 5th Cycle RHNA targets for low- and very low-income permits. Projects that reserve at least 50 percent of units for low-income households may opt in to SMAP.
2025 RHNA Progress
The City issued building permits for 139 housing units in 2025, roughly half of which are attributable to the 73-unit CCCMA Assisted Living Facility project at 6214 Thornton Avenue consisting of a four-story building with 73 residential rooms and 97 memory care beds for senior residents. Approximately 23 percent of total units permitted were single-family dwellings intended for homeownership at above moderate-income rates. Accessory Dwelling Units (ADUs) account for the remaining 24 percent of the total units permitted in 2025.
The City entitled 288 new housing units in 2025 (see Table 2 in Attachment 2). Entitled units were distributed across four projects: one multifamily development, two single-family dwelling (SFD) projects, and a large-scale residential development that includes both single-family homes and a multifamily apartment building. Thirteen percent of entitled units are designated for very low-income households, twelve percent for low-income households, and the remainder for above moderate-income households.
Finally, the City issued certificates of occupancy (COO) to mark completion of 53 housing units in 2025. Roughly 74 percent of completed units were single-family detached dwellings for above-moderate income households, with the remainder consisting of ADUs. Table 3 in Attachment 2 summarizes all entitled, permitted, and completed units in 2025 by affordability level, and Table 4 (Attachment 2) summarizes the projects by structure type.
Development Trends and Comparison to Previous Years
Compared to previous years, the number of housing units permitted and completed in 2025 decreased. The City issued 139 units in 2025 compared to 185 permits issued in 2024. This reflects continued softening in the market for new construction as the result of the high cost of debt, labor and materials, and is consistent with trends in other ABAG jurisdictions. Notably, the number of units receiving Certificates of Occupancy in 2025 is significantly lower than in prior years, with only approximately 50 units completed compared to about 250 in 2024 and 450 in 2022. This decrease is to be expected, as several large developments completed construction in earlier years, while more recent projects have not yet reached final inspection. Optimistically, entitled units increased to 288 from the 162 units entitled in 2024, although this is still down from the high of 370 units in 2022. Figure 1 in Attachment 2 shows the change in entitled, permitted, and completed projects by unit count between 2022 and 2025.
While the City is making progress toward its RHNA goals, it is doing so at a slower rate relative to this stage of the 6th Cycle. Newark is halfway through the 6th Cycle and has issued permits for approximately 22 percent of the 1,874 units in the total RHNA. Unlike in previous years, the City is not on target to meet RHNA targets for any income band. Table 5 in Attachment 2 presents the number of building permits issued for new homes cumulatively and during each year of the 6th Cycle thus far. It is likely the City will continue to be subject to SB 423 and projects that restrict at least 10 percent of units to low-income households, or 20 percent to moderate-income households, will be eligible to opt in to a streamlined ministerial approval process until at least 2031.
The City has a pipeline of several hundred homes for which entitlement applications have been submitted or approved, such as but not limited to FMC Willow, Mowry Village, and the SAHA Thornton Avenue Apartments. The former two projects are reliant on significant and expensive site preparation work prior to pulling building permits, and the latter is dependent on scarce and highly competitive public subsidy. Table 6 in Attachment 2 summarizes entitled housing units for major projects that are still in the pipeline and have not yet received building permits. Building permits for these projects would bring the City’s RHNA progress to 61 percent in total (see Table 7 in Attachment 2).
For additional details on the permits and projects included in the 2025 Housing Element Annual Progress Report, please refer to Attachment 1 (Housing Element APR Tables).
Accessory Dwelling Unit (ADU) Production
The growth of Accessory Dwelling Units represents a significant contribution to the city’s RHNA production goals. City Council approved Ordinance 563 in January to amend Newark Municipal Code Section 17.26.040 (Accessory Dwelling Units). The ordinance took effect March 14, 2026 and augments ADU design standards to comply with state law and best practices.
The Association of Bay Area Governments (ABAG) publishes guidelines on how to count ADUs in the APR. Jurisdictions are allowed to use ADUs to satisfy RHNA requirements by reporting actual or anticipated affordability levels. In cases where data is not available, jurisdictions may apply ABAG’s ADU affordability methodology for their APRs covering calendar years 2023, 2024, and 2025. This methodology makes the following assumptions for ADU affordability:
- 30 percent of ADUs are affordable to very low-income households.
- 30 percent are affordable to low-income households.
- 30 percent are affordable to moderate-income households.
- 10 percent are affordable to above moderate-income households.
ADUs are a reliable way of making RHNA progress across all income levels. In 2025, the City issued building permits for 34 ADUs, showing an increase of approximately 17 percent compared to the 29 ADUs permitted in 2024. ADU production in Newark is anticipated to grow now that the newly amended ADU Ordinance has gone into effect, allowing for greater incentives and allowances for ADU production. Additional production may also increase when interest rates decline, making financing more accessible for homeowners and developers.
Table 8 in Attachment 2 shows the number of ADUs permitted in 2025, categorized by income level.
Notable Affordable Housing Accomplishments
In the past year and ongoing, the City has made significant progress in advancing the development of affordable and accessible housing across all income levels. Key accomplishments include the following:
- Mowry Village (P2020-002): Entitled in December 2025, the project will include 30 homes affordable to very low- and low-income households, and one manager’s unit. The project is in predevelopment.
- SAHA Thornton Avenue Apartments (DR2023-003): Entitled in April 2025, this 5-story development will provide 59 affordable units, including one manager's unit. Alameda County awarded $2.9 million to the project in January 2026 to reserve 13 units for households exiting or at-risk of homelessness. Staff and the developer are working together to advance the project as quickly as possible. The project is working to secure low-income housing tax credits and additional necessary funding from other agencies.
- Terracina at FMC Willow (RZ2020-001): City Council approved this 91-unit affordable housing community as part of the FMC Willow / Grand Park development. Lennar, the master developer, has commenced site work for the larger FMC Willow and Grand Park development. The project is working to secure low-income housing tax credit financing and plans to commence construction in the first half of 2027 if awarded.
- Timber Senior Housing: This 79-unit affordable senior housing development will celebrate its grand opening on May 29, 2026. 20 units are reserved for seniors exiting or at-risk of homelessness and 20 have vouchers from the Housing Authority of the County of Alameda. The project is the first to implement the City’s policy giving preference to households who live or work in Newark. 34 percent of preference-eligible units were offered to Newark community members.
Housing Element Programs Progress
The Housing Element identifies seven goals, 32 policies, and 45 programs to meet the housing needs of all members of the community. Table D in Attachment 1 (2025 Annual Progress Report) provides detailed information on each program, including implementation status and alignment with the goals and policies.
The City has completed approximately 29 percent of Housing Element programs, with 65 percent in progress or continuous over the duration of the 6th Cycle. Only six percent of programs have not yet started. Staff have tentatively agendized at least five additional programs for City Council’s consideration in the next three months, which would bring the City to a completion rate of 40 percent. Additional programs are on track for council consideration before the end of 2026.
HCD sent a letter to the City on December 21, 2023, confirming the adopted Housing Element is substantially compliant with state law (see Attachment 3). The letter identified 19 programs for which the City must continue timely and effective implementation. Staff expect HCD to focus its mid-cycle review on these programs. The APR documents progress with each of these programs and realistic pathways to completion within 12 months.
Affordable Housing Work Plan- Overview
City Council adopted the 2021-2023 Affordable Housing Work Plan with three years remaining in the fifth Housing Element cycle (2015-2023). At that time, the City had exceeded its RHNA targets for above moderate-income housing but was not on track to meet targets for other income bands. The purpose of the 2021-2023 Affordable Housing Work Plan was to direct housing impact fees and policy to meet very low-, low-, and moderate-income targets. The City developed this plan with support from Baird + Driskell Planning, now known as Community Planning Collaborative, who also supported the City in preparing the 6th Cycle Housing Element.
The 2021-2023 Affordable Housing Work Plan identified priority populations for housing assistance, based on available data and input from City Council and the Planning Commission. Priority populations included young families, key workers like teachers and first responders, people and families at risk of homelessness, people with disabilities and other special housing needs, and low-income seniors. The plan further identified priority housing types, namely rental apartments of medium to high density in select areas, condominiums and townhomes (including for first-time homebuyers), and missing middle housing types such as duplexes and four-plexes.
In order to achieve the Fifth Cycle RHNA targets and address City-identified priorities, the plan established an investment framework for spending housing impact fees across six program areas. 40 percent of funds were earmarked for development of new affordable housing, 40 percent for acquisition of sites or other uses that advanced affordable housing production, and the remainder allocated to the Housing Element update, the Inclusionary Housing Study and Nexus Study, preparation of a local preference policy, and a first-time homebuyer program.
The City ultimately achieved 42.1 percent of its Fifth Cycle RHNA target for very low-income housing permits, 35.3 percent for low-income, 22.8 percent for moderate-income, and 515.8 percent for above moderate-income. Since the 2021-2023 Affordable Housing Work Plan was passed, the City has completed the Housing Element Update, Inclusionary Housing Study, local preference policy, and committed $12 million in City resources and acquired land for affordable housing production. The City is also preparing to formally update its Nexus Study for impact fees and to launch a first-time homebuyer program.
Affordable Housing Work Plan- Update
City Council has requested that staff update the Affordable Housing Work Plan. The timing for this request is prudent given the 2021-2023 plan’s programming is complete or nearing completion, and the City is now approaching the middle of the 6th Cycle. Staff request preliminary feedback from City Council on the purpose, goals, and priorities of the Work Plan, its term, and how to approach use of housing impact fees.
The 2025 APR demonstrates that the City may still expect to meet its RHNA targets for above moderate-income homes if the developers of large projects with approved entitlements or submitted applications are able to advance to permitting. Achieving very low-, low-, and moderate-income targets will require continued focus from the City, however. The priority populations identified in the 2021-2023 Work Plan would typically fall into these income categories. With a median home price of $1.4 million and trending upward, the majority of the City’s existing housing stock does not serve these populations.
The Housing Element includes several programs aimed at addressing the housing needs of these priority populations and removing constraints to developing priority housing types. Some of these programs include amending zoning and development standards to permit duplexes and small multi-unit buildings, streamlining approval processes to improve development certainty and reduce development costs, studying and updating parking standards, considering the reuse of underutilized City and Newark Unified School District property for affordable housing development, and developing or implementing specific plans for Newpark Mall, Old Town, and Four Corners. Several of these programs are already underway and will be presented to City Council over the course of 2026 and 2027.
The City has collected substantial housing impact fee revenue to support affordable housing development and program implementation. The Fund has approximately $29 million available to spend as of April 2026. This does not include projected revenue from approved residential projects and non-residential projects that will pay the housing impact fee. Staff have identified the following potential actions to include in a revised investment framework:
- Notice of Funding Availability (NOFA): One or more competitive applications for Housing Impact Funds to support production of 100 percent affordable housing.
- Augmented Funding for existing projects in the wake of reduced state and federal contributions.
- First Time Homebuyer Program: Continued program implementation and funding to be formally recommended at an upcoming City Council meeting.
- Homeless Action Plan implementation.
- Partnering with Newark Unified School District to provide technical assistance and evaluate school sites for reuse with housing and other benefits.
- An Affordable Housing Fund Innovation Study to assess how to further leverage housing investments, and
- A Mid-Cycle Constraints Analysis to perform a 360-degree review of the City’s regulations, policies, and practices that help or hinder housing production, and identify recommendations for meaningful improvement.
Affordable Housing Work Plan- Staff Recommendations
Staff recommend the City Council provides direction on an update to the Affordable Housing Work Plan.
- Should the Work Plan's goal be to achieve 6th Cycle RHNA targets?
- Staff recommend the Work Plan's goal and purpose be to direct housing-related spending and programming toward achieving 6th Cycle RHNA targets for very low-, low-, and moderate-income households.
- Should the Work Plan's term extend through the end of the 6th Cycle?
- Staff recommend a five-year work plan for years 2026 through 2031 (the remainder of the 6th Cycle)
- Should the Work Plan adopt the same priority populations and housing types as the previous plan?
- Staff recommend maintaining priority populations and housing types, which also align with the 6th Cycle Housing Element.
- How should the Work Plan's Investment Framework reflect these priorities?
- Staff recommend the majority of housing impact fees be directed toward producing and preserving the City's inventory of affordable housing, consistent with the previous plan.
- Staff recommend retaining funding for the First Time Homebuyer Program, with formal recommendations to be presented in the coming months.
- Staff recommend earmarking a percentage of funds for implementation of the forthcoming Homeless Action Plan, including homelessness prevention.
- Staff recommend earmarking additional funding to analyze how to further leverage housing investments.
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