The California Department of Housing and Community Development (HCD) issued its Regional Housing Needs Assessment (RHNA) Determination to the Southern California Association of Governments (SCAG) on Aug. 22, 2019, concluding that the region needs to construct 1,344,740 housing units over the next decade. (SCAG Regional Housing Need Determination, p.1, 2019.) The Determination further called for 557,336, or 41.4 percent of the units, to be low-income or very low-income housing. (Id, Attachment 1.) This is more than triple the RHNA for the SCAG region during the 2014-2021 compliance period, which called for zoning for the potential construction of 438,030 housing units.

California’s Housing Element Law requires regional agencies, such as SCAG, to periodically assess the region’s housing needs based on population growth and other demographics. (Gov. Code Section 65584.) After the final RHNA Determination is adopted by the regional agency, local jurisdictions are responsible for divvying up the required number of dwelling units, as well as subsequently providing adequate zoning to accommodate the projected need through the adoption of a housing plan into each jurisdiction’s General Plan. While the law doesn’t require local jurisdictions to approve new housing, it does require them to provide adequate zoning to accommodate the need. (SeeGov. Code Sec. 65302(c), 66580.)

The law has historically been criticized as being “toothless.” But change is afoot. Earlier this year, Gov. Gavin Newsom made an example of the city of Huntington Beach by initiating a lawsuit after it had radically downzoned its General Plan and instituted numerous development constraints that had a sizable impact on the city’s ability to provide lower-income housing units, bringing it out of compliance with its RHNA. (California Department of Housing and Community Development v. City of Huntington Beach, Complaint, p.6, 2019.)

Major Takeaways

Although the state has had some legislative success in updating tools that bolster housing production in recent years, including updates to the State Density Bonus Law and the Housing Accountability Act, HCD’s 1.3 million housing unit RHNA Determination is a significant arrow in the quiver that supports the need for housing production.

The RHNA numbers add fuel to the fire by demonstrating an urgent need to produce more housing. If cities and counties in the SCAG region are expected to accommodate for three times the housing production than current zoning allows – and there are teeth in the Housing Element Law that compel jurisdictions to appropriately zone for such growth – the next logical step would lead to the approval of more housing projects in the region.

However, expect heavy pushback to continue against such a big increase in housing units as the process ensues at the local level, leaving jurisdictions in Southern California to battle among themselves as to the appropriate allocations and implementation. While the numbers support an overwhelming demand for more housing, proposed projects will continue to face a number of challenges that often impede housing production, including the California Environmental Quality Act (CEQA), neighborhood opposition, high land costs, rising construction costs and impact fees.