The URL can be used to link to this page

Home My WebLink AboutCC 03-03-2026 Item No. 2 No Net Loss (RHNA)_Staff PresentationCC 3-3-2026 #2 No Net Loss (RHNA) Presentation City Council March 3, 2026 6th Cycle Housing Element No Net Loss Agenda Background RHNA/Priority Sites No Net Loss Strategies Budget Background HE Adoption Timeline May 2023 – Mar 2024 Late 2021 HE Kick off Feb 2023 First Draft submitted to HCD Jan – Aug 2022 Site Selection: PC mtgs – six CC mtgs - three Sept 2024 HCD review Later drafts to HCD HE Adoption – May ’24 HE Rezoning – July ‘24 HCD certifies Housing Element May – Jul 2024 2021-2031 (6th Cycle) Housing Element 58 individual properties on sites inventory. Many sites contiguous. 70% of properties (40 properties) – 50 units/acre or more. 15 sites – 20-35 units/acre. Sites divided fairly equally between Mixed-Use (27) and Residential only zones (31). RHNA/Sites Inventory Income Group Units % of total Very Low Income (<50% of AMI)1,193 26.0 Low Income (50%-80% of AMI)687 15.0 Moderate Income (80%-120% of AMI)755 16.5 Above Moderate Income (>120% of AMI)1,953 42.5 Total 4,588 100 Affordable Units = 2,635 (~57% of total) City’s 6 th Cycle RHNA Buffer ~ 15-30% particularly for lower income levels recommended to ensure city does not have to update sites inventory before next HE update for “no net loss” purposes. Approved HE Capacity and Surplus * Includes Pipeline projects, projected units on Priority Housing Sites and projected ADUs RHNA Category Very Low Low Moderate Above Moderate Total 2023-2031 RHNA 1,193 687 755 1,953 4,588 Total Capacity*2,037 847 2,997 5,881 Surplus 157 92 1,044 1,294 No Net Loss (SB166) What is No Net Loss? Adopted by Legislature in 2002 to ensure: No reduction in potential capacity of new residential development Cities maintain sufficient supply of Priority Housing Sites throughout RHNA Planning period Amended in 2017 by SB166 to require cities to: Maintain sufficient capacity to meet unmet RHNA at all times, for each income category Annual reporting requirements makes Housing Element more like an agreement with ongoing tracking than a final document What must cities do to comply? If development is approved at different density or affordability mix, City must: Find that existing Priority Housing sites are adequate to accommodate remaining unmet RHNA at all income levels Quantify remaining unmet RHNA and capacity at each income level on existing Priority Housing Sites If shortfall is found, City must, concurrently or within 180 days, either: Identify new Housing Element sites or Upzone existing Housing Element sites Why deficit? City has received over 15 housing development applications since 2024 SB330 preliminary applications locked in lower density prior to HE certification on selected Priority Housing Sites (Summerhill I, Toll Brothers, Dividend I, SC Office Ctr.) City BMR requirements – 15-20% vs. City affordable RHNA – 57% Projects on Priority Housing Sites proposed at lowest end of density range, generally 20 units/acre (Evulich) Only one project utilizing state Density Bonus law to include bonus units to exceed HE expected capacity Pipeline project (Vallco) utilized state law to reduce affordable units from 50% to 20% (from 890 to 356) Current Status City unable to make No Net Loss finding for Moderate units since December 2025 Currently unable to make No Net Loss finding for both Low and Moderate units due to Vallco/The Rise modification 180 days to correct inability to make No Net Loss finding No Net Loss Table *Projects include: Summerhill I (Fontana’s etc.); Toll Brothers (United Furniture); Dividend Homes I (Partial)(20111 Stevens Creek Blvd); Mary Ave (Charities Housing); Vallco (Rise) SB 35; Summerhill II (Evulich) (pending) RHNA Category Very Low Low Moderate Above Moderate Total 2023-2031 RHNA 1,193 687 755 1,953 4,588 Total Capacity 2,037 847 2,997 5,881 Total adopted Surplus (a)157 92 1,044 1,294 Projection on HE/ Pipeline Sites entitled* (b) 756 153 1,535 2,444 Sites entitled* (c) 272 39 1,299 1,610 Remaining Deficit/ Surplus (a)-(b)+(c) -327 -22 808 460 Timeline State requires No-Net Loss be resolved within 180 days. Unrealistic timeframe to identify and upzone new sites. Variables affecting timeline: Extent of community outreach and noticing CEQA-level of review TBD Strategies Site Selection Consideration Identify new sites at higher densities (50 du/acre or more) along major transportation corridors Align with AB2011, other regional land use plans and General Plan Keeps denser development out of neighborhoods Requires fewer sites Affordable by design (smaller apartment) units which could enable City to claim as affordable units even if not in BMR program ISSUE: Protecting viable commercial development/retail centers along major corridors Potential Sites Overview* * Not all sites feasible due to location, ownership, control and other factors Budget Budget Scope of Work and Budget being prepared Current estimate - $350K - $500K Cost variation since CEQA process TBD Options on funding being explored