Staff Report. Adoption of Housing Element
PREPARED BY: Erin Walters and Jocelyn Shoopman
Associate Planner and Associate Planner
Reviewed by: Town Manager, Assistant Town Manager, Town Attorney, and the Community
Development Director
110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832
www.losgatosca.gov
TOWN OF LOS GATOS
COUNCIL AGENDA REPORT
MEETING DATE: 01/30/2023 ITEM NO: 1
DATE: January 26, 2023
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Consider the Adoption of the Los Gatos 2023-2031 Housing Element. An
Environmental Analysis Based on the Previously Certified 2040 General
Plan Final Environmental Impact Report has been Prepared for the Los
Gatos 2023-2031 Housing Element. Location: Town-wide. Applicant:
Town of Los Gatos. General Plan Amendment Application GP-22-003.
RECOMMENDATION:
Consider adoption of a resolution to adopt the Los Gatos 2023-2031 Housing Element.
BACKGROUND:
The Town of Los Gatos has prepared a draft update to the Housing Element of the General
Plan to affirmatively further fair housing and accommodate the 1,993-unit Regional Housing
Needs Allocation (RHNA) for the 2023-2031 Housing Element cycle. The content of the Draft
2023-2031 Housing Element is structured for consistency with the requirements set forth in
State law. In addition to responding to requirements of State law, the Housing Element also
demonstrates the Town of Los Gatos’ strategy to meet the Town’s locally determined
housing needs, and that these needs are addressed through policies and programs outlined
within the Housing Element. Public review and input have been a critical component of this
6th cycle Housing Element Update. A copy of the Draft 2023-2031 Housing Element is
available on the Town’s Housing Element website: https://engagelosgatoshousing.com.
California Government Code Section 65580 and following regulates the use and
requirements of Housing Elements in California. State law requires that the Town update its
General Plan Housing Element every eight years. State law further requires adoption of an
updated Housing Element that is substantially compliant with Government Code Sections
65580 and following by January 31, 2023.
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BACKGROUND (continued):
Starting in early 2021, the Town has worked diligently through the required steps to comply
with State law with the goal of adopting a Housing Element prior to the January 31, 2023,
deadline. Exhibit 3 of Attachment 6, presents a timeline outlining the ongoing efforts that
have been completed toward achieving this goal. Guidance was also provided by the
California Housing and Community Development Department (HCD) throughout the process.
On October 14, 2022, the Town submitted the Draft Housing Element and a response to
public comments received during the 30-day public comment period to HCD for preliminary
review, which consists of a 90-day review.
On December 13, 2022, Town staff met with the HCD reviewer and received verbal,
preliminary input on the Draft Housing Element.
On December 20, 2022, the Town Council recommended that the current version of the
Draft 2023-2031 Housing Element, as submitted to HCD on October 14, 2022, be considered
for adoption prior to the statutory deadline of January 31, 2023. In addition, the Town
Council recommended that the Sites Inventory of the Housing Element utilize the minimum
density, requiring additional sites to be added in order to comply with the Town’s RHNA as
determined by the Association of Bay Area Governments (ABAG) and required buffer
(Attachment 5). The sites added are detailed in the Discussion Section of this report.
On January 11, 2023, the Planning Commission made a recommendation to the Town Council
to adopt the Draft 2023-2031 Housing Element with the revised Sites Inventory Analysis and
revised Sites Inventory Form (Attachments 6 through 8). See discussion below.
The primary purpose of this agenda item is for Town Council to consider adoption of the Draft
2023-2031 Housing Element (previously provided and referenced here as Attachment 1) with
the Environmental Analysis (Attachment 2), revised Sites Inventory Analysis (Attachment 3)
and revised Sites Inventory Form (Attachment 4) prior to the January 31, 2023, statutory
deadline.
DISCUSSION:
The following section summarizes the required components of Housing Element updates per
State law, new requirements included since the 5th cycle Housing Element adoption (2015-
2023), and penalties for non-compliance with Housing Element law. The section also
includes a summary of public engagement conducted to date related to the 6th cycle
Housing Element Update.
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DISCUSSION (continued):
Required Components of a Housing Element
Pursuant to Government Code Section 65583, local governments are required to include the
items below within their Housing Elements, and subsequent updates thereto. A new
required component introduced as part of the 6th cycle is included in italics below and
discussed in further detail within the “New Requirements for the 6th Cycle Housing Element
Update” Section on the following page.
1. Housing Needs Assessment: Examine demographic, employment, housing trends and
conditions, and identify existing and projected housing needs of the community, with
attention paid to special housing needs (e.g., large families, persons with disabilities).
This Section includes a community’s RHNA as determined by a community’s regional
planning body in partnership with HCD.
2. Evaluation of Past Performance: Review the prior Housing Element to measure progress
in implementing policies and programs.
3. Housing Sites Inventory: Identify locations of available sites for housing development or
redevelopment to demonstrate there is enough land zoned for housing to meet future
need at all income levels.
4. Community Engagement: Implement a robust community engagement program that
includes reaching out to individuals and families at all economic levels of the community,
plus historically underrepresented groups.
5. Constraints Analysis: Analyze and recommend remedies for existing and potential
governmental and nongovernmental barriers to housing development.
6. Policies and Programs: Establish policies and programs to be carried out during the 2023-
2031 planning period to fulfill the identified housing needs.
7. Affirmatively Furthering Fair Housing (AFFH): Analyze and address significant disparities
in housing needs and access to opportunity by proposing housing goals, objectives, and
policies that aid in replacing segregated living patterns with truly integrated and
balanced living patterns, transforming racially and ethnically concentrated areas of
poverty into areas of opportunity, and fostering and maintaining compliance with civil
rights and fair housing laws.
New Requirements for the 6th Cycle Housing Element Update
Pursuant to recent State legislation, the following items are now required as part of the
Housing Element update process:
• Affirmatively Furthering Fair Housing (AFFH). Assembly Bill (AB) 686, passed in 2018,
created new requirements for jurisdictions to affirmatively further fair housing.
According to AB 686, affirmatively furthering fair housing means to take “meaningful
actions, in addition to combating discrimination, which overcome patterns of
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DISCUSSION (continued):
segregation and foster inclusive communities free from barriers that restrict access to
opportunity based on protected characteristics” and is Federally mandated by the 1968
Fair Housing Act. The four main goals are to:
o Address significant disparities in housing needs and in access to opportunity;
o Replace segregated living patterns with truly integrated and balanced living patterns;
o Transform racially and ethnically concentrated areas of poverty into areas of
opportunity; and
o Foster and maintain compliance with civil rights and fair housing laws.
• Public Comment on Draft Revisions. AB 215 (2021), requires local governments to make
the first draft revision of their Housing Element update available for public comment for
at least 30 days. Further, if any comments are received, a local government must take at
least ten additional business days to consider and incorporate public comments into the
draft revision before submitting to HCD. HCD must review the draft and report its
written findings to the planning agency within 90 days of receiving the first draft
submittal for each Housing Element revision or within 60 days of its receipt for a
subsequent draft amendment or adoption.
Penalties for Non-Compliance
In the current 6th cycle, jurisdictions face a number of new consequences for not adopting a
Housing Element that is substantially compliant with state Housing Element law by the
statutory deadline of January 31, 2023. Under legislation enacted in recent years, if a
jurisdiction does not comply with State housing law, HCD may refer the jurisdiction to the
Attorney General and significant fines may be imposed. A court finding a Housing Element
inadequate may limit local land use decision-making authority until the jurisdiction brings its
Housing Element into compliance, or local governments may lose the right to deny certain
projects.
Conversely, an HCD-certified Housing Element makes jurisdictions eligible for, or with higher
priority for, numerous sources of funding.
Builder’s Remedy
Under the Housing Accountability Act, jurisdictions who do not have an adopted Housing
Element that is in substantial compliance with State law by the statutory deadline (January
31, 2023, for the Bay Area) could be required to approve a residential development even if it
does not meet local General Plan and zoning regulations. The “builder’s remedy” has been
in the Housing Accountability Act since 1990 and pertains to residential developments that
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DISCUSSION (continued):
have at least 20 percent low-income units or 100 percent moderate income units. HCD has
confirmed that no such 120-day grace period will apply this cycle and any jurisdiction that
adopts a Housing Element later than January 31, 2023, will be subject to the “builder’s
remedy.” This provision in the Housing Accountability Act has been available for quite some
time and in Los Gatos no applications have come forward during previous Housing Element
cycles when the Town missed the statutory deadline for adoption of a Housing Element.
Staff fully recognizes that the current Housing Element cycle is unlike any past cycle. It is
possible that a developer could invoke the “builder’s remedy” in connection with a planning
application submitted in February if the Town Council does not adopt a Housing Element
that is in substantial compliance with Housing Element law by January 31, 2023.
Housing Element Requirements
The following section summarizes the major topics covered by the Town’s Housing Element.
A. Housing Needs Assessment
As part of the housing element update process the Town is required to analyze the
existing and projected housing needs of the Town, including its fair share of RHNA
requirements. The Town’s analysis of housing needs is required to include an
assessment of detailed demographic data, including: population age, size, and ethnicity;
household characteristics; overpayment trends; housing stock conditions; units in need
of replacement or rehabilitation; and needs of special needs populations including the
elderly, persons with disabilities, unhoused persons, extremely low-income households,
and farmworkers. Utilizing the Housing Needs Data Report provided by ABAG, the 6th
cycle Housing Element Update outlines the Town’s housing needs. See Appendix B of the
Draft 2023-2031 Housing Element.
B. Regional Housing Needs Allocation (RHNA)
In January of 2022, HCD approved ABAG’s adopted Final RHNA Plan for the San Francisco
Bay Area: 2023-2031 (Plan) which establishes a total RHNA for the San Francisco Bay
Area of 441,176 residential units for the 6th cycle housing element update 2023-2031
planning period. ABAG’s Plan further distributes this RHNA across the Bay Area’s nine
counties, and 101 cities based on demographic and population data received from the
California Department of Finance (DOF). Local jurisdictions must then utilize their
ascribed RHNA to update the housing elements of their general plans for the 6th cycle
planning period, inclusive of identifying eligible land resources to accommodate their
RHNA.
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DISCUSSION (continued):
RHNA requirements are organized into four affordability categories, established
according to the Area Median Income (AMI) of a geography. These categories include
very low-income residential units, which are affordable to households earning less than
50 percent of AMI; low-income residential units, which are affordable to households
earning between 50 percent and 80 percent of AMI; moderate income residential units,
which are affordable to households earning between 80 percent and 120 percent of AMI;
and above moderate-income residential units which are affordable to households
earning over 120 percent of AMI. The Town’s RHNA is summarized below:
Town of Los Gatos RHNA
Income Category
5th Cycle RHNA
(2015-2023)
6th Cycle RHNA
(2023-2031)
Very Low (less than 50% of AMI) 201 537
Low (50-80% of AMI) 112 310
Moderate (80-120% of AMI) 132 320
Above Moderate (More than 120% of AMI) 174 826
Total 619 1,993
RHNA Buffer
New “no net loss” provisions of Government Code Section 65863 require the Town to
ensure an adequate supply of land be made available for housing development
throughout the duration of the 2023-2031 planning period. This means that if housing
sites identified within the jurisdictions 6th cycle Housing Element are developed with
non-residential uses, lower residential densities, or residential uses at affordability levels
that are different than anticipated by the Housing Element, the Town’s Housing Element
could be determined to be out of compliance. Accordingly, the Town’s Sites Inventory
was compiled with a 16 percent buffer to address future compliance with “no net loss”
provisions.
C. Constraints Analysis
In addition to analyzing the existing and projected housing needs of the Town, the
Housing Element must also identify and analyze potential and actual governmental and
nongovernmental constraints to the maintenance, improvement, or development of
housing for all income levels in the community, regardless of protected class. A
summary of constraints to the development and improvement of housing in the Town is
included in Appendix C of the Draft 2023-2031 Housing Element.
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DISCUSSION (continued):
D. Housing Resources and Sites Inventory
As part of the 6th cycle Housing Element Update, the Town is also required to identify
resources available to the Town for the preservation, rehabilitation, and production of
housing throughout the community. These resources also include land within the Town
of Los Gatos that are identified as eligible for accommodation of the Town’s RHNA
requirements. Pursuant to Government Code Section 65583.2(a), the following
resources are eligible for accommodation of the Town’s RHNA: vacant sites zoned for
residential use; vacant sites zoned for nonresidential use that allows residential
development; residentially zoned sites that are capable of being developed at a higher
density; or sites zoned for nonresidential use that can be redeveloped for residential use,
and for which the Housing Element includes a program to rezone the site. The Town’s
Housing Sites Inventory is summarized in Appendices D and H of the Draft 2023-2031
Housing Element.
In response to Town Council direction given on December 20, 2022, a revised Sites
Inventory Analysis (Attachment 3) and revised Sites Inventory Form (Attachment 4) have
been prepared with the calculations based on an assumption of housing development at
the minimum density for sites that accommodate affordable units. As a result, two
additional sites were added to maintain the RHNA plus buffer discussed above. Those
sites include:
• Site C-7 – 15495 Los Gatos Boulevard [Assessor’s Parcel Number (APN): 424-22-030];
and
• Site C-8 – 15445 Los Gatos Boulevard (APN: 424-19-068).
As a result, the revised Sites Inventory Analysis (Attachment 3) and revised Sites
Inventory Form (Attachment 4) include sufficient sites to meet the RHNA requirement in
each income category, plus a buffer of 319 housing units (16 percent).
E. Goals, Policies, and Implementation Programs
The Housing Element includes a set of goals, policies, and implementation programs
intended to promote the preservation, rehabilitation, and production of housing
throughout the Town. Goals are long-range, broad, and comprehensive targets that
describe future outcomes the Town desires. A policy is a specific instructional guideline
that seeks to promote a goal. Together, goals and policies are implemented through a
series of programs that identify specific, quantifiable actions the Town will undertake
during the 6th cycle planning period. The Town’s Draft Goals, Policies, and
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DISCUSSION (continued):
Implementation Programs are summarized in Section 10.6 of the Draft 2023-2031
Housing Element.
F. Affirmatively Furthering Fair Housing (AFFH)
Assembly Bill (AB) 686, passed in 2018, created new requirements for jurisdictions to
affirmatively further fair housing as part of the Housing Element update process. These
requirements, found in Government Code Section 8899.50, are intended to address
racial inequalities seen today throughout California which developed through historical
policies and practices enacted at Federal, State, regional, and local levels and across the
public and private sectors. Though many of these explicit forms of historical
discrimination have been outlawed, the subsequent results of these systems have
displaced many low income people and people of color to the peripheries of the region
or out of the Bay Area all together.
Accordingly, the Town must incorporate fair housing considerations into its 6th Cycle
Housing Element to increase housing opportunities in high resource neighborhoods. The
following summarizes the components of the required AFFH component of the Town’s
Housing Element and can be found in Appendix A of the Draft 2023-2031 Housing
Element:
• Targeted Community Outreach;
• Assessment of Fair Housing;
• Fair Housing Outreach Capacity and Enforcement;
• Segregation and Integration Patterns;
• Racially and/or Ethnically Concentrated Areas of Poverty (R/ECAPS) and Racially
Concentrated Areas of Affluence (RCAA);
• Disparities In Access to Opportunity;
• Sites Inventory Relative to Affirmatively Further Fair Housing; and
• Goals, Polices, and Implementation Programs that Affirmatively Further Fair Housing.
G. Evaluation of Past Progress
Pursuant to State Law, the Draft Housing Element summarizes the implementation status
of Goals, Policies, and Implementation Programs from the Town’s 5th cycle Housing
Element. See Appendix E of the Draft 2023-2031 Housing Element.
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DISCUSSION (continued):
H. Community Engagement
Beginning the summer of 2021, the Town has conducted a comprehensive community
engagement and outreach strategy, as required by Government Code, to inform the 6th
cycle Housing Element Update process. This strategy has included a series of 13 Housing
Element Advisory Board (HEAB) public meetings; two community meetings; a joint study
session with the HEAB, Planning Commission, and Town Council; four Town Council
meetings; and public engagement at staff hosted informational booths.
The Town has a dedicated Housing Element Update website which has provided the
public interactive engagement opportunities including the Balancing Act mapping tool,
housing polls, and surveys. Community engagement opportunities have been publicized
on the Town’s website, through the Town’s multiple social media platforms and through
targeted email updates to the Town’s Notify Me subscriber list for the 2040 General Plan
Update and Housing Element Update. Postcards were also sent to all property owners
and tenants in the Town for the Housing Element Community meeting. Announcements
have been provided in the local newspaper for all HEAB meetings, community meetings,
study sessions, public hearings, and for the 30-day public review period of the Initial
Public Review Draft Housing Element. Feedback received throughout the ongoing
community engagement and outreach process has assisted staff and the consulting team
in preparing the Draft Housing Element Update and related items.
Attachment 11 includes an updated chronological timeline detailing the ongoing efforts
that have been completed.
Planning Commission
On January 11, 2023, the Planning Commission received and considered public comments on
the Draft 2023-2031 Housing Element (Attachment 6) as well as written comments from a
Planning Commissioner provided in an Addendum (Attachment 7). The Planning Commission
found that the Draft Housing Element was in substantial compliance with State law (see
Verbatim Minutes in Attachment 8).
The Planning Commission unanimously recommended the Town Council adopt the Draft
2023-2031 Housing Element (Attachment 1) with the revised Sites Inventory Analysis
(Attachment 3) and revised Sites Inventory Form (Attachment 4).
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DISCUSSION (continued):
HCD Findings Comment Letter
On January 12, 2023, the Town received HCD’s findings/comment letter on the Draft
Housing Element (Attachment 9). The findings/comment letter from HCD provides a list of
recommended revisions. In addition to the HCD’s findings/comment letter received on
January 12, 2023, the Town received public comments that were submitted directly to HCD
(Attachment 10). The content of the HCD’s findings/comment letter was similar to
neighboring jurisdictions as reviewed by the HEAB at the December 1, 2022, HEAB meeting.
Next Steps
Town staff and the consultants continue to work on responses to the HCD comment letter
and any further modifications to the Draft Housing Element required as part of that response
will be provided to the HEAB for their review and consideration prior to any resubmittal.
Based on the review and a recommendation from the HEAB, a revised draft will be submitted
to HCD. Subsequent reviews by HCD will take up to 60 days.
In addition, the Town must post the revisions on its website and email a link to all individuals
and organizations that have previously requested notices relating to the Town’s Housing
Element for at least seven days prior to submitting a revised draft Housing Element to HCD.
Based on HCD’s second review, it is possible that additional revisions may be needed before
HCD would certify the Housing Element. This means that Planning Commission and Town
Council hearings for adoption of a revised Housing Element would need to be conducted.
PUBLIC COMMENT:
Attachment 14 includes public comment received between 11:01 a.m., Tuesday, December
20, 2022, and 11:00 a.m., Thursday, January 26, 2023.
ENVIRONMENTAL ASSESSMENT:
An Environmental Analysis was prepared for the Housing Element Update (Attachment 2).
Although the Housing Element Update could have a significant effect on the environment, it
was found that all potentially significant effects have been analyzed adequately in Town of
Los Gatos 2040 General Plan Environmental Impact Report (EIR), pursuant to applicable
standards including CEQA Guidelines Section 15168(c)2, and the Housing Element Update is
consistent with the growth projections evaluated in the General Plan EIR.
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CONCLUSION:
Since the Summer of 2021, the HEAB worked with staff and the consultant to create the
2023-2031 Draft Housing Element. The Draft Housing Element is the result of extensive
community outreach as described in this report. In conclusion, based on the HEAB and
Planning Commission's recommendations, staff recommends that the Town Council:
• Receive and consider public comments;
• Review the Draft 2023-2031 Housing Element (Attachment 1), the Environmental
Analysis (Attachment 2), the Revised Sites Inventory Analysis (Attachment 3) and the
revised Sites Inventory Form (Attachment 4); and
• Adopt a resolution (Attachment 12) to adopt the Draft 2023-2031 Housing Element
(Attachment 1) with the revised Sites Inventory Analysis (Attachment 3) and revised Sites
Inventory Form (Attachment 4).
ALTERNATIVES:
Alternatively, the Council may:
1. Continue this item to a date certain with specific direction to staff;
2. Refer the item back to the Planning Commission with specific direction; or
3. Not adopt the Draft 2023-2031 Housing Element; or
4. Recommend adoption with modifications.
COORDINATION:
The Community Development Department coordinated with the offices of the Town
Attorney and Town Manager in the preparation of this report.
ATTACHMENTS:
Previously received:
1. Draft 2023-2031 Housing Element
2. Environmental Analysis
3. Revised Appendix D, Sites Inventory Analysis
4. Revised Appendix H, Sites Inventory Form
Received with this Staff Report:
5. December 20, 2022, Town Council Minutes
6. January 11, 2023, Planning Commission Staff Report with Exhibits 1-5
7. January 11, 2023, Planning Commission Addendum Report with Exhibit 6
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8. January 11, 2023, Planning Commission Verbatim Minutes
ATTACHMENTS (continued):
9. January 12, 2023, HCD’s Findings Comment Letter
10. Public Comments Received by HCD
11. Revised Housing Element Update Process Timeline
12. Draft Resolution with Exhibits 1 and 2
13. Public Comment received between 11:01 a.m., Tuesday, December 20, 2022, and 11:00
a.m., Thursday, January 26, 2023