Because of the current housing crisis, State law currently favors developers in order to boost housing construction across the State. New State laws and modifications to existing laws that became effective in 2018 make it increasingly difficult for cities to deny housing projects. MGP’s new plan proposes a range of 1,200-1,500 units. As a result, it’s likely the City will need to consider having a significant number of additional housing units on the property. A summary of the new State laws, also known as “California’s 2017 Housing Package,” are summarized by the California Department of Housing and Community Development (HCD) at http://www.hcd.ca.gov/policy-research/lhp.shtml. For 2019, the Governor and State legislature passed additional laws that will significantly impair a city’s ability to limit housing proposed for any site despite the objections of cities when they become effective in January 2020. For example, the State enacted legislation known as SB 330 to prohibit cities from changing zoning regulations that would reduce housing density.
Governor Newsom has set as a goal the need to have 3.5 million additional housing units built within the State by 2025. On August 22, 2019, the cities and counties in Southern California were informed by the State to plan for over 1.3 million new housing units for a planning period covering October 2021 through October 2029 as part of a process known as the “Regional Housing Needs Assessment,” or RHNA (Source: State of California – August 22, 2019: http://hcd.ca.gov/community-development/housing-element /docs/6thCycleRHNA-SCAGDetermination.pdf). The RHNA process is governed by a regional planning agency known as the Southern California Association of Governments (SCAG). The outcome of the RHNA process and the number of housing units each city in the SCAG region must plan for is approved by the State.
Every city and county in the State is required by law to participate in the RHNA process which results in the adoption of a housing plan known as a Housing Element, which is part of every General Plan. The City has been advised by SCAG that it should plan for an estimated 1,970 new units to meet its share of RHNA, which includes a requirement for the provision of “affordable housing.” The City is able to rely on the approved 2016 Five Lagunas plan and the 988 units contained therein to meet a portion of the anticipated RHNA. However, the approved 2016 plan does not include any units the City must include in its Housing Element to meet its “affordable housing” obligations. The City is expecting to be responsible for accommodating around 1,180 units of affordable housing in its next Housing Element (See FAQ 20 for a description of “affordable housing” as defined by State law). Providing for housing opportunities in the Urban Village enables the City to preserve its well-established land use pattern in other areas of the community.
For additional information on RHNA: http://www.scag.ca.gov/programs/Pages /Housing.aspx
For additional information on Housing Elements: http://hcd.ca.gov/community-development/housing-element/index.shtml
March 2021 Update:
The City has become aware that a state law adopted in 1982, but updated in 2017, has been used successfully against several cities to overturn decisions that denied housing projects for various reasons. Known as the “Housing Accountability Act”, the regulations require cities to approve projects that meet certain criteria, and limit the ability of a city to lower density or disapprove a project. Most recently, the City of Los Angeles was sued for violating the Housing Accountability Act over its denial of a 577-unit housing project in November 2020. The city was ordered by the Courts to approve the project.
The City has determined that Merlone-Geier’s project fits within the class of projects that are subject to the Housing Accountability Act. These projects include projects that: (1) only propose housing, (2) have at least two-thirds of their building area devoted to housing, or (3) consists of transitional housing or supportive housing geared toward homeless individuals. MGPs project meets the second criteria in that more than two-thirds of the project’s building area is devoted to housing. Only projects that violate a development standard, or violate written public health or safety standards, policies, or conditions can be required by a city to lower the number of units proposed, or otherwise be denied.
Improperly denying a project or requiring a project to lower its proposed density could result in a city being fined for violating the Housing Accountability Act. Specifically, a Court may require an agency to pay a $10,000 per unit fine. In the case of a local agency’s bad faith and failure to comply with a court order within 60 days, fines can increase to $50,000 per unit and the court can overturn a project denial and approve the project itself. Bad faith includes decisions that are frivolous or entirely without merit.
Staff notes the City has received many letters and emails requesting that the City break MGP’s project into “smaller pieces”. This approach would likely be in direct conflict with the Housing Accountability Act, subjecting the City to the fines described above. The City has no basis to require a smaller project to be submitted. It would require MGP to lower its project density without meeting the criteria state law provides to cities to require applicants to lower their project density as described in the preceding paragraphs above.
As an update to the RHNA portion of this FAQ, the City has received its final allocation for housing. Despite filing an appeal to have the housing figure lowered, the City received a final RHNA allocation of 1985 units that must be incorporated into the City’s 2021-2029 Housing Element. The proposed project will satisfy nearly 60 percent of the City’s required overall RHNA, 100 percent of the City’s obligation for higher income housing, and nearly 30 percent of the City’s RHNA obligation for Low and Moderate Income Housing. The housing provided in Merlone-Geier’s project results in less housing the City has to plan for elsewhere in the City to satisfy state planning requirements for housing.
The City’s final RHNA allocation is as follows:
Very Low: 568 Units
Low: 353 Units
Moderate: 354 Units
Above Moderate: 710 Units
Total: 1,985 units
Staff anticipates that The Village at Laguna Hills project will account for 1,164 units of the 1,985 units required in the approved RHNA.