Activist state

California State Auditor: RHNA Process Report Finds Housing Goals Not Supported by Evidence

On March 17, Michael S. Tilden, the California State’s interim auditor, issued a searing criticism of the Department of Housing and Community Development (HCD) and its regional housing needs assessments (RHNA).

The auditor found issues in the HCD methodology that may have inflated the RHNA requirements by hundreds of thousands of housing units. The auditor concludes that “the Department of Housing and Community Development needs to improve its processes to ensure that communities can adequately plan for housing”.

In his letter to the governor and legislative leaders, the auditor also states, “Overall, our audit determined that HCD does not provide assurance that its needs assessments are accurate and adequately supported. … This insufficient oversight and lack of support for its considerations risks eroding public confidence that HCD is advising local governments of the appropriate number of housing units they will need.

the California Alliance of Local Elected Officials (CALE), a statewide organization of local elected officials, called for a full review and supports the findings of the state auditor. Said Susan Candell, CALE Member and Lafayette City Council Member, “CALE has advocated for this audit, and it is critical that HCD and the Legislature act on the auditor’s recommendations. Our constituents deserve a fair and accurate process.

State Senator Steve Glazer (D-Orinda), a member of the Joint Committee on Legislative Audit and former Mayor of the Town of Orinda, says, “It’s these types of mistakes that undermine community trust and confidence in housing needs. . We need more affordable housing and we need to do better.

Since 1969, California has required all local governments to create plans to meet the housing needs of their communities, a process called Regional Housing Needs Assessment (RHNA).

Each eight-year RHNA cycle begins with population and household projections from the Demographic Unit of the Department of Finance (DOF). These projections are then forwarded to HCD for their estimates of the number of housing units needed to meet California’s needs. The RHNA process was changed in 2018 by Senate Bill 828 (Wiener), which created several ad hoc adjustments that led to the issues cited in the state auditor’s report.

Auditor findings on vacancy rates are consistent with Embarcadero Institute Analysis

Unfortunately, the audit looked at the RHNA plans of only eight counties, which together contain less than eight percent of California’s population. Due to ongoing lawsuits, the audit did not consider the RHNA plans of the two largest planning organizations, the Southern California Association of Governments (SCAG) and the Association of Bay Area Governments (ABAG). These two regions contain nearly two-thirds (65.5%) of the state’s population. This omission makes it difficult to grasp the magnitude of the problems created by HCD errors.

However, the Embarcadero Institute, a Northern California think tank, estimated that HCD’s incorrect vacancy rates created an overcoverage of 200,000 units. Conceptual inconsistencies between the DOF household projections and the HCD housing unit projections created an additional overcoverage estimated at 700,000 housing units. Thus, the RHNA need for 2.1 million new dwellings could be contaminated by an overcoverage of 900,000 dwellings.

The auditor’s report does not attempt to reconcile these differences because HCD’s procedures are not clearly documented. Instead, he insisted that DOF and HCD clarify and publish their methods and assumptions.

Recommendations from auditors

The auditor’s report made solid recommendations and set a timeline for their completion. Several tasks are to be undertaken between June 2022 and February 2023, including conducting multiple data reviews, establishing formal review procedures, reviewing the suitability of comparison regions, and performing rate analysis. vacancy rates and their historical trends. The Department of Finance is tasked with reviewing its population projections based on 2020 census data and conducting a comprehensive review of assumptions about household formation rates.

According to Julie Testa of CALE, council member for the town of Pleasanton, “unless HCD and DOF complete this work and correct their mistakes, there is no justification for punishing towns for not achieving the wrong objectives of the RHNA. The Legislature should suspend implementation of the RNHA until the public is satisfied that these issues have been resolved. »

About CALE

The California Alliance of Local Electeds (CALE) brings together current and former local elected officials, community activists, and other concerned residents. CALE believes that California’s 482 municipalities are too geographically and culturally distinct to be subject to uniform rules from the state capital. CALE believes communities thrive when local democracy thrives