15 Attachment 12 - Public Comments Received by HCDFrom: Phil Koen <>
Sent: Friday, September 29, 2023 1:45 PM
To: Joel Paulson <jpaulson@losgatosca.gov>; Laurel Prevetti <LPrevetti@losgatosca.gov>;
paul.mcdougall@hcd.ca.gov <paul.mcdougall@hcd.ca.gov>; jose.jauregui@hca.ca.gov
<jose.jauregui@hca.ca.gov>; Gabrielle Whelan <GWhelan@losgatosca.gov>
Cc: <>; Rick Van Hoesen ()
<>
Subject: 7 day comment period - draft Housing Element
Dear Mr. Paulson,
At last night’s HEAB meeting, Staff made the statement that it was appropriate to credit the 6th cycle
RHNA with units that are made available during the RHNA projection period (June 30, 2022, through
January 31, 2031). The Staff referenced page 5 of the HCD Site Selection Guidebook as the authority for
doing this. In reviewing page 5 (which is attached), the referenced language appears under the heading
“Pending, approved, or permitted development”.
On Table 10-3 (attached) there is a line item which is labeled “pipeline projects” which is described as
“residential development applications that have either been approved or are currently under review and
are expected to be built during the 2023-2031 planning period”. This totals 191 housing units.
Comparing this language to the HCD Site Selection Guidebook, it appears the line item fits with the
Guidebook’s description for “pending, approved, or permitted development”.
There is another line item in Table 10-3 which is labeled “entitled/permitted/under construction/finaled
since June 30, 2022, to January 31, 2023”. This totals 227 units, which included 49 very low-income
units. All these units appear to have been permitted before the current RHNA production period, which
commenced on June 30, 2022. This is substantiated by the 2022 Annual Element Progress Report (which
is attached) which shows in addition to the 49 low-income units recorded in 2020, 75 above moderate
units were recorded in 2021, 185 above moderate units were recorded in 2021 and 145 above moderate
units were recorded in 2022. Many of these units are attributed to parcel APN 424-07-100 which is the
North 40 Phase 1 (refer to Table D-7 and the 20220, 2021 and 2022 Annual Element Progress Reports).
The date of production is triggered by the permitting date, not the completion date.
As such, it does not appear that any of these 227 units qualify as a credit toward the 6th cycle RHNA
because they were permitted prior to the June 30, 2022, commencement date. Additionally, all these
units have been recorded against the 5th cycle RHNA, and are being double counted.
In closing I have attached a memorandum from HCD to ABAG dated January 12, 2022 (also attached)
which substantiates the above statement. This memo makes it clear that RHNA credits toward the 6th
cycle only apply for “new units approved, permitted and/or built beginning from the start date of the
RHNA projection period June 30, 2022”.
We would recommend that Table 10-3 be amended by eliminating all 227 units identified as
“entitled/permitted/under construction/finaled” and thus avoid doubling counting these units in both
the 5th and 6th cycles.
Thank you,
Phil Koen
ATTACHMENT 12
From: Anne Paulson <>
Sent: Friday, September 29, 2023 1:40 PM
To: HousingElements@hcd.ca.gov; Housing Element <HEUpdate@losgatosca.gov>
Subject:
29 September 2023
Dear Town of Los Gatos and HCD reviewers,
I’ve reviewed the Town of Los Gatos’ latest revision of their Housing Element. Its Site Inventory is strong:
it is composed of properties where the site owner has expressed interest in building, and those sites are
to be upzoned. Unfortunately, the Programs section and the plans to Affirmatively Further Fair Housing
are underpowered, and the Below Market Priced Housing Program seems to be far underfunded for the
actions that are proposed.
Programs
In general, the Programs section of the Los Gatos draft Housing Element is weak. Instead of committing
to actual reforms with listed timelines, the document merely says Los Gatos might do something,
employing words like “consider,” “study,” “pursue opportunities.”
Program E, Affordable Development on Town-Owned Property. The Town says it will make an
“ongoing effort” to “pursue opportunities” for affordable housing on Town-owned properties.
This is a commitment to nothing. If the Town wants to build housing on its own property, it
merely has to commit to a date where the Town will release the RFP for affordable developers,
and it should do so.
Program G, Study Detached Single-Family Condominium Option. The Town commits to
“study[ing]” a new floor area ratio (FAR) standard for multifamily development for detached
condos by December 2024, but not actually changing anything. It’s not clear what problem this
is supposed to solve. Apparently the FAR is thought to be too small for these units. If that is so,
instead of studying the issue with no promise about doing anything, the Town should commit,
right in the housing element, to increasing the FAR, by a specified amount, by a date certain.
The time for study is over; that’s what the planning period was for. Housing Elements should
have actions, with deadlines.
Program J, Small Multi-Unit Housing. The Town commits to updating the Zoning Code to
facilitate low rise multi-family structures in a certain zone, but what the update might be, and
why it would facilitate more housing, is absent from the document. The Town needs to commit
to specific actions by specific dates.
Program O, Affordable Housing Development. The Town commits to providing incentives for
affordable housing, but doesn’t commit to any particular incentives. This program needs more
details, and deadlines. The Town commits to reviewing impact fees, by January 2026, but
doesn’t commit to lowering them. The deadline is too far away, and the commitment to action
is missing.
Program R, Density Bonus. The Town commits to amending their local Density Bonus Ordinance
to conform with state law. Then the Town will “conduct a study,” which will recommend some
improvements, and the Town will adopt those unspecified improvements by December 2029, at
the end of the planning period. So, the Town will do nothing beyond following state law during
the 6th Cycle, and then at the end of the cycle might do something unspecified.
Program T, Nonprofit Affordable Housing Providers. The Town commits to doing nothing in
specific to support nonprofit affordable housing providers, beyond meeting with them once a
year.
Program Y, Supportive Services for the Homeless. Again, a program that commits to nothing.
Program Z, Increased Range of Housing Opportunities for the Homeless. The Town commits to
“continu[ing] to support” the County in its homeless efforts. Not with money, though, or with
any other specified support. It’s unclear what the “support” is supposed to be. This is a
commitment to nothing.
Program AA, Reduce Parking Standards. The town will “initiate a study to determine specific
updates.” The time for study is over. The Town should list the new parking standards and the
date they will be changed.
Program AQ, Zoning Code Amendments. The code revisions are specific. The text should be
amended to make clear that that the rapidly approaching deadline for rezoning, January 2024,
also applies to its commitment to eliminate the currently-required reviews by the Historic
Preservation Committee, the Environmental Consultant, the Consulting Architect, the Consulting
Arborist, the Consulting Landscape Architect, the Geotechnical Peer Reviewer, and the
Consulting Traffic Consultant. The applicant currently must undergo and pay for all of these
reviews.
Program AV, Senate Bill 9 Monitoring. Los Gatos’ RHNA plan calls for 96 permits for units on
lots using SB 9. On page D-66 of the Housing Element, the Town writes, “Since the adoption of
the Town’s SB 9 Ordinance, the Town has received a total of four Two-Unit Housing
Development applications and seven Urban Lot Split applications (between January 2022 and
January 2023). The applications result in a total of 13 net new housing units a year.”
But housing permits are the relevant metric, not applications. A look at Table D-7, which would
contain the housing recently entitled, permitted, under construction or finaled using SB 9, shows
one lot with a completed entitlement of an SB 9 subdivision, and one lot where an SB 9
subdivision is being reviewed. That's all. There are no issued permits using SB 9. The town didn't
issue its projected 13 new housing unit permits last year under SB 9. It issued none. Already, the
Town is far behind.
For that reason, the Town should have a prompt and robust plan to replace those potentially
missing SB 9 units with other RHNA units. Instead, the Town offers, ”Evaluate effectiveness of SB
9 approvals every year beginning in 2023; and identify additional incentives and/or site capacity,
if needed by 2025” and “consider additional efforts to incentivize SB 9 applications and reassess
and revise the overall sites strategy for the RHNA within one year through adjusting SB 9
capacity assumptions with actual permitted units, and/or identifying additional sites to expand
site capacity to the extent necessary to accommodate the RHNA.” This is not a plan; it is a
notion to wait until the middle of the cycle, and then possibly make a plan, and then possibly
implement the plan some time before the end of the cycle. Or maybe after the cycle ends. It’s
remarkably non-committal.
The Town needs a plan now for replacing planned-for SB 9 units, to be implemented at the end
of 2024 or any following year if SB 9 permits are not coming through at 12 permits per year.
Below Market Program in-lieu funding
Los Gatos has an inclusionary zoning program for multifamily homes, and in cases where the
developer can’t build the inclusionary units on site, the developer instead pays in-lieu fees,
which are restricted to use by the Below Market Priced Housing Program (BMP Fund). The most
recently available statement for the account shows a balance of $3,698,538 as of June 30, 2022,
and both it and the previous year’s statement show no revenue from fees. Evidently most
developers build their inclusionary units rather than paying an in-lieu fee. Further, these fees
appear to be the only source of revenue for the Below Market Priced Housing Program.
Meanwhile, the Housing Element shows the BMP Fund funding the following programs. New or
expanded programs are denoted by an asterisk.
Program I, assist low income seniors with money for home repairs
Program N*, subsidize extremely low income housing
Program O*, reduce fees for affordable housing development
Program P*, purchase affordability covenants to create affordable units or make already
affordable units more deeply affordable
Program Q, waive building fees for low income ADUs
Program AI, fund county efforts for home repairs and accessibility improvements
Program AJ*, assist lower income homeowners with funding for home repairs and
improvements (expansion of existing Program I?)
* = new or expanded program
The BMP Fund does not appear to be getting much ongoing funding, and several of the
programs, notably N and P, would be expensive if done at a meaningful level. Program N, for
example, promises to subsidize three developments which include extremely low income
housing. A single unit of subsidized housing costs over a million dollars to build in the Los Gatos
area; a meaningful subsidy for three different developments will cost millions of dollars.
Program P promises to purchase affordability covenants for three housing units; again, this is an
expensive undertaking. And the Town is also committing to continue existing programs using the
BMP Fund. The $3.7 million appears inadequate to cover what the Town says it’s going to do.
The Town needs to identify an alternative source of funding for these programs, for example by
charging affordable housing fees to builders of single family homes. Moreover the Town needs
to be specific about how much money will go towards Program N; otherwise the Town could
give a dollar each to three different developments and claim it had satisfied its obligation.
Affirmatively Furthering Fair Housing
As is documented in the Housing Element, Los Gatos is a majority white, high income town.
Affirmatively Furthering Fair Housing (AFFH) is therefore particularly important for the Town.
The listed strategies are inadequate to the task. For AFFH, Los Gatos commits to all the
strategies in the BMP program, plus:
Program A: Establish an annual meeting between staff and developers.
Program U: Continue to support the County of Santa Clara’s Continuum of Care plan. This
“support” doesn’t include any money; the funding source is listed as “County CDBG.”
Program V: Make some zoning changes for people with disabilities. Most of the changes are
required by state law.
Program W: Rental dispute resolution program
Program X: Work with the local and regional partners to provide rental assistance for people
with developmental challenges. This assistance doesn’t include money; the funding source is
listed as “none required.”
Program Y: Supportive Services for the Homeless: Support (in some unspecified way that
doesn’t seem to include money or transfer of property) community and nonprofit organizations,
continue to fund local nonprofits with an annual grant
Program Z: Stabilize rents: The Town commits to nothing specific, merely “study[ing] and
implement[ing] recommendations.”
This is not nearly enough. The Town needs substantial programs to deal with a substantial issue,
and they haven’t provided them.
In the Sites Inventory, the Sites for the biggest amounts of low income housing are all located on
arterials and near freeways (15500 & 16151 Los Gatos Boulevard) or near highway interchanges
where two major freeways meet (14917 & 14925 Los Gatos Boulevard, 110 Knowles, 50 Los
Gatos-Saratoga Road). The pleasant neighborhoods not near loud, polluted freeways and
arterials do not allow denser buildings; people who are not extremely wealthy cannot live in
those neighborhoods. Los Gatos has a minimum lot size, in the flatter, lower fire risk areas, of
8000 square feet, a constraint that the document doesn’t mention. Allowing denser housing on
some of these lots, by for example allowing duplexes everywhere without the SB 9 restrictions,
or reducing the minimum lot size, would be a way to affirmatively further fair housing.
In the Programs section, the Below Market funding programs, and Affirmatively Furthering Fair Housing,
the scale of Los Gatos’ solution does not approach the scale of the problem. To get approval, the Town
needs to offer more.
Sincerely,
Anne Paulson
Los Gatos Community Alliance
Facts Matter; Transparency Matters; Honesty Matters
www.lgca.town
November 27, 2023
Joel Paulson
Community Development Director
Town of Los Gatos
110 E. Main Street
Los Gatos, CA 95030
RE: November revised draŌ of Los Gatos 2023-2031 Housing Element
Dear Mr. Paulson:
The Los Gatos Community Alliance (LGCA) is a group of concerned residents wriƟng to you regarding the
revised draŌ 2023-2031 Housing Element submiƩed to HCD on November 16, 2023 (the “November
draŌ HE”).
Pursuant to AB 215, the Town is required, at least seven days before submiƫng to HCD any draŌ
revisions, to post any proposed revisions on its internet website and to email a link to such revisions to
all individuals and organizaƟons that have previously requested noƟces relaƟng to the Town’s housing
element. In a November 13 email and subsequent clarifying email sent on November 14, 2023 to the
LGCA, Ms. Whelan, Town AƩorney, confirmed that the seven-day public review period did not occur as
required by AB 215. Ms. Whelan also stated that the Town staff would contact HCD to request HCD to
consider the date of the submiƩal to be November 27th rather than November 17th. We have not
received confirmaƟon that the Town has made this request of HCD; however for the purposes of this
public comment leƩer we have assumed such a request was made.
This is not the first Ɵme we have raised concerns regarding the Town’s obligaƟons under Govt Code
SecƟon 65585(b)(1). One of the purposes of the public review process is to allow the Town to discover
public concerns and, when appropriate, to incorporate public comments into its draŌ revised Housing
Elements prior to submission to HCD. In a public comment leƩer dated September 28, 2023 commenƟng
on the September draŌ of the revised 2023-2031, LGCA raised specific concerns regarding double-
counƟng of permiƩed units in both the 5th and 6th cycle. To substanƟate this concern, we submiƩed
Table B from the 2022 Annual Element Progress Report along with a comment leƩer issued by HCD to
ABAG dated January 12, 2022 which discussed this very point. Yet the Town ignored the LGCA comment
and proceeded to submit the September draŌ to HCD on Monday October 2, 2023, the very next
business day aŌer closing the 7-day public comment period on September 29th without disclosing why it
chose to do so.
Then apparently the Town saw the light. In the November draŌ HE the Town revises the figures to
eliminate the inappropriate double-counƟng of permiƩed units. Yet instead of crediƟng the changes to
the comment leƩer provided by LGCA, the Town aƩributes the changes to, “further clarificaƟon from
HCD,” that permiƩed units could not be double counted in both 5th and 6th cycle RHNA. We point this out
to draw your aƩenƟon to the Town’s legal obligaƟon to consider and act, if appropriate, upon public
comments when they are received. The fact that the Town ignored the LCGA comment and submiƩed
the September draŌ double-counƟng permiƩed units in both the 5th and 6th cycle despite the
overwhelming informaƟon provided to the Town that this was not allowed implies that the Town ignored
Town of Los Gatos November 27, 2023 Page 2
Los Gatos Community Alliance
Facts Matter; Transparency Matters; Honesty Matters
www.lgca.town
the comments and filed the Housing Element revision without giving any consideraƟon to the public
comments it received.
The fact that the Town submiƩed the most recent draŌ HE on November 17, and subsequently asked
HCD to consider the submiƩal date to be November 27 appears to formalize the Town’s policy to ignore
public comments. If permiƩed, it would also make it impossible for the Town to comply with HCD’s prior
admonishment to, “summarize all public comments and describe how they were considered and
incorporated into the element.” This comment, among others related to Public Comments, was included
HCD’s comment leƩer of May 30, 2023.
On November 22 we requested of the Town’s aƩorney that the Town rescind its inappropriate
submission of the November draŌ HE, and resubmit it to HCD only aŌer it receives and gives appropriate
consideraƟon to these and any other public comments. As of this wriƟng, the Town has not responded
to that request.
We also note that the Town’s posƟng of the revised Housing Element on November 17 did not include a
copy of the transmiƩal leƩer that accompanied the submiƩal. As we know, HCD has asked that such
transmiƩal leƩers include informaƟon regarding any public comments that have been received, as well
as how the Town has considered and, if appropriate, incorporated such comments into the submiƩal. Of
course it was not possible to include such informaƟon in the submiƩal of November 17 because the
public comment period had not yet commenced.
In light of these facts, and by copy of these comments to HCD, we are requesƟng HCD to reject (or to
require the Town of Los Gatos to rescind) the draŌ revised Housing Element the Town originally
submiƩed to HCD on November 17, and further to direct the Town to give due consideraƟon to these
comments and to any other comments it receives in the public comment period and to, “summarize all
public comments and describe how they were considered and incorporated into the element,” before
resubmiƫng the draŌ Housing Element to HCD.
With this background, LGCA is submiƫng this public comment leƩer regarding the November draŌ of
the revised 2023-2031 Housing Element, even though such draŌ has previously – and inappropriately –
been submiƩed to HCD in violaƟon of Govt Code secƟon 65585 (b) (1).
1. Table 10-3 incorrectly computes the RHNA “buffer” percentage and overstates % RHNA surplus
Table 10-3 in the November draŌ shows a “% Surplus” which is meant to show the surplus or deficit as a
percentage of units above the 6th cycle RHNA by income category. However, the percentage has been
computed using a “Remaining RHNA” figure that reflects “credits” for projected ADU producƟon and
pipeline projects neƩed against the RHNA. By using “Remaining RHNA” the “% Surplus” is materially
overstated (24% vs 19%).
While at first glance this might seem like a minor error, it is important to note HCD has discussed the
importance of having a sufficient “buffer” in percentage terms to ensure sufficient capacity exists in the
Housing Element to accommodate shorƞall of sites to accommodate its remaining RHNA especially in
very low- and low-income categories. This is discussed in Govt Code SecƟon 65863 – No Net Loss Law.
Town of Los Gatos November 27, 2023 Page 3
Los Gatos Community Alliance
Facts Matter; Transparency Matters; Honesty Matters
www.lgca.town
There is no reason to compute the % surplus using a “Remaining RHNA” figure except to mislead the
reader into believing there is a larger surplus buffer percentage than actually exists.
This creates confusion regarding Program AS – Provide Adequate Sites for Housing, RHNA Rezoning,
Lower Income Households on Nonvacant and Vacant Sites Previously IdenƟfied. This program calls for
rezoning sites to accommodate a 25% buffer above RHNA (not “Remaining RHNA”) to allow for
compliance with the No Net Loss Provisions of SB 166.
The following table shows the buffer percentages as presented in the Town’s draŌ revised November HE
submission, as well as the corrected buffer percentages calculated using the appropriate RHNA figures:
As noted in this table, based on the proper calculaƟon, the total surplus buffer of 19% is less than the
25% goal outlined in program AS.
The Town should change the calculaƟon of the % Surplus to reflect the excess or deficit over the RHNA
units by income category and properly reflect this throughout the Housing Element, including Table 10-3.
This will also make Los Gatos consistent with every other ABAG jurisdicƟon’s calculaƟon of a buffer
percentage over RHNA.
2. Projected ADU Affordability is inappropriately opƟmisƟc
On page D-60 of the November draŌ Housing Element it is disclosed that the income distribuƟon for
projected ADU producƟon is assumed to be 30% very low, 30% low, 30% moderate and 10% above
moderate income. This distribuƟon is overly opƟmisƟc with reference to the producƟon of very low-
income and is not supported by the Town’s actual experience of issued building permits for ADUs
Very Low-
Income
Low-
Income
Moderate
Income
Above-
Moderate
Income Total
Single-Family Units & Housing Projects 0 0 0 2 2
ADUs 0 3 11 9 23
Pipeline Projects 0 1 0 190 191
Projected ADUs 60 60 60 20 200
Total 60 64 71 221 416
RHNA 537 310 320 826 1,993
Remaining RHNA 477 246 249 605 1,577
HEOZ Sites 634 357 340 624 1,955
Owner Interest / Conceptual Development Plans 480 283 264 304 1,331
Additional Sites 154 74 76 320 624
Surplus above Remaining RHNA 157 111 91 19 378
% Surplus [vs "Remaining RHNA" as presented in
the Town's November 17 submission]33% 45% 37% 3% 24%
% Surplus [corrected - vs RHNA]29% 36% 28% 2% 19%
Town of Los Gatos November 27, 2023 Page 4
Los Gatos Community Alliance
Facts Matter; Transparency Matters; Honesty Matters
www.lgca.town
between the years 2020 to 2022. Over this Ɵme a total of 98 building permits were issued and none of
them were for very low- or low-income units. This fact is not disclosed in the November draŌ.
If we include the 23 ADU units permiƩed from June 30, 2022 to January 31, 2023 there were zero very
low-income units and 3 low-income units out of a total of 23 issued building permits. That would bring
the total over the 3½ years to 121 ADUs permiƩed with zero being very low income and 3 low-income
units for a total of less than 3%. In light of this history, it does not appear that the Town has adopted a
reasonable assumpƟon that over the 6th cycle, 60% of projected ADU producƟon would be very low- or
low-income units.
LGCA made this same comment on the September draŌ HE, which had the same ADU income
distribuƟon assumpƟon. The Town’s reply was that the ADU income distribuƟon was based on guidance
provided in the, “Using ADUs to SaƟsfy RHNA,” Technical memo provided by ABAG.
However, the technical memo cited by the Town was prepared to help jurisdicƟons jusƟfy the use of
ADUs to help saƟsfy their RHNA requirements by income category. It was not a study of affordability
levels of ADUs. ABAG, however, did complete a study of ADU affordability levels. It published draŌ
results on September 8, 2021 in a technical assistance memo enƟtled, “Affordability of Accessory
Dwelling Units.” We now refer to that study (copy aƩached). This study is highly relevant to establishing
a projecƟon of ADU producƟon by affordability level.
The study included a specific recommendaƟon for income distribuƟon of ADUs for jurisdicƟons with fair
housing concerns, which Los Gatos clearly has. This distribuƟon is 5% very low, 30% low, 50% moderate
and 15% above. This distribuƟon more accurately reflects open market rentals, excluding units made
available to family and friends, and has been adopted by other ABAG jurisdicƟons. This distribuƟon is
further validated by data in the survey showing the following distribuƟon of ADU market rate units on
the Peninsula: 6% very low, 31% low, 48% moderate and 15% above.
By overesƟmaƟng the producƟon of very low-income ADU units, the Town is inappropriately reducing its
6th cycle RHNA requirement for this income category to a level not supported by the evidence. This is
unfair to all other jurisdicƟons in ABAG with similar affordable housing concerns, such as the City of Los
Altos, which adopted the more appropriate income distribuƟon assumpƟon. We hypothesize the Town
used this more aggressive assumpƟon in order to reduce the amount of land required to be rezoned to
achieve the Town’s 6th cycle very low income RHNA units. By our calculaƟon the Town would need to
rezone approximately 10% more land if the study recommendaƟon had been adopted. This is
fundamentally wrong and needs to be corrected.
AdopƟng the distribuƟon recommended for jurisdicƟons with affordable housing concerns would result
in the number of projected ADU units shown in Table 10-3 being adjusted to 10 units for very low
income, 60 units for low income, 100 units for moderate and 30 units for above moderate-income
categories. More importantly the surplus above RHNA for very low-income units would be reduced to
107 units from 157, reducing the buffer over RHNA from 29% to 20%.
Town of Los Gatos November 27, 2023 Page 5
Los Gatos Community Alliance
Facts Matter; Transparency Matters; Honesty Matters
www.lgca.town
Combining the correcƟons from Item 1 above with these adjustments, Table 10-3 should be presented
as follows:
3. SB 330 impact on development densiƟes should be added to SecƟon D. 4 – Appropriate
Density/Default Density
SecƟon D. 4 discusses default density and development trends. The discussion is out of date and fails to
fully disclose the number of SB 330 development applicaƟons that have been filed and the potenƟal
impact on development densiƟes.
Since December 1, 2022 there have been 8 SB 330 pre-applicaƟons filed compared to none over the past
3 years. Two of the 8 applicaƟons (405 Alberto Way-52 units and 14859 Los Gatos Blvd-437 units) were
final applicaƟons as of the date the November draŌ was submiƩed to HCD and a third (50 Los Gatos-
Saratoga Road-158 units) will be finaled by January 4, 2024 before the January 31, 2024, statutory
deadline for rezoning of parcels in the HEOZ. None of the remaining 5 SB 330 applicaƟons will be finaled
by January 31, 2024. All three of the applicaƟons noted above are for parcels included in the Housing
Element Site Inventory.
SB 330 applicaƟons which allow for the development of parcels at densiƟes below those anƟcipated in
the Housing Element act as a constraint to housing development and an impediment to achieving its
RHNA. None of the parcels noted above will be developed at the minimum development density of 30
DU/acre established by the HEOZ. Rather the parcels will be developed at densiƟes ranging from 17.9
DU/acre to 28.8 DU/acre.
As a result of the vested lower densiƟes, these three parcels will reduce the projected development
units from the HEOZ from 1,955 to 1,842 units and the total net capacity will be reduced to 2,258 units
which is RHNA of 1,993 units plus 265 units for a 13.3 percent buffer, not the 24 percent reported in
Table 10-3.
Very Low-
Income
Low-
Income
Moderate
Income
Above-
Moderate
Income Total
Single-Family Units & Housing Projects 0 0 0 2 2
ADUs 0 3 11 9 23
Pipeline Projects 0 1 0 190 191
Projected ADUs 10 60 100 30 200
Total 10 64 111 231 416
RHNA 537 310 320 826 1,993
Remaining RHNA 527 246 209 595 1,577
HEOZ Sites 634 357 340 624 1,955
Owner Interest / Conceptual Development Plans 480 283 264 304 1,331
Additional Sites 154 74 76 320 624
Surplus above RHNA 107 111 131 29 378
% Surplus above RHNA 20% 36% 41% 4% 19%
Town of Los Gatos November 27, 2023 Page 6
Los Gatos Community Alliance
Facts Matter; Transparency Matters; Honesty Matters
www.lgca.town
As a result, Programs AQ and AS will not accomplish the goal to accommodate the Town’s RHNA and a 25
percent buffer by the end of January 31, 2024.
4. No Net Loss Buffer of 33% for Very-Low-income category is wrong and does not comply with Govt
Code SecƟon 65863 – No Net Loss Law
Recent changes to state law require jurisdicƟons to conƟnually maintain adequate capacity in their site
inventories to always meet their RHNA by income category throughout the enƟre planning period. On
page 10-32 the Housing Element discusses the need to maintain a HCD recommended buffer of 15
percent above RHNA to provide a “cushion” if a site is developed below the density projected in the
Housing Element or at a different income than projected. This cushion provides the Town with addiƟonal
sites available to accommodate the remaining balance of the RHNA. Table 10-3 reports a % Surplus of
33% for very-low-income units which we believe is incorrectly determined.
In our September 2023 comment leƩer, we raised concerns regarding the No Net Loss Law. The Town
never responded to that leƩer. In the November draŌ submiƩed to HCD, the Town stated “the Town has
received direcƟon from HCD that No Net Loss Law is only applicable once a project has been approved.
The preliminary and formal SB 330 applicaƟons that the Town has received have not been approved”.
The Town’s posiƟon is based on Govt Code SecƟon 65863 (c) (2) which does address the approval of a
development project resulƟng in fewer units by income. However, Govt Code SecƟon 65863 (a) also
requires the Town “shall ensure that its housing inventory” or “its housing element programs to make
sites available” which “can accommodate at all Ɵmes throughout the planning period, its remaining
unmet share of regional housing need”.
AdopƟng a site inventory, which is an administraƟve acƟon, that is known to be unable to accommodate
the Town’s RHNA units for very low-income category because exisƟng regulatory condiƟons present a
barrier to development violates this requirement. The Town intenƟonally ignores the impact of SB 330
applicaƟons on Program AQ and on sites included in the Housing Element site inventory. The Town fails
to determine if SB 330 sites finaled before January 31, 2024, which are subject to vested development
rights, are sufficient to provide for the Town’s share of RHNA need for all income levels.
We also direct you to the flow chart “No Net Loss Law Decision Flow Chart” in HCD’s No Net Loss
comment leƩer dated October 2, 2019. The flow chart’s first step is to determine what type of acƟon is
being considered. The second step is to determine if the locaƟon of the proposed development is
included in the Housing Element site inventory. The third step is to determine “would approval of the
proposed project result in a lower density than was assumed in the housing element or create a shorƞall
of capacity to accommodate the RHNA by income group”.
Using this flowchart as our basis for analysis, it is clear the SB 330 applicaƟons for 14859 Los Gatos Blvd
(437 units) and 50 Los Gatos-Saratoga Road (158 units) would result in a shorƞall of HEOZ capacity to
accommodate the very low income RHNA category as explained in Program AS. Based on the SB 330
applicaƟons, 14859 Los Gatos Blvd would have 184 less very low income units and 50 Los Gatos-Saratoga
Road would have 86 less very low income units than projected in the site inventory for a total “net loss”
of 270 very low income units.
Town of Los Gatos November 27, 2023 Page 7
Los Gatos Community Alliance
Facts Matter; Transparency Matters; Honesty Matters
www.lgca.town
In comparing the 270 unit “net loss” for very low-income category and adjusƟng for the overstatement
of ADU projecƟon for very low-income units discussed above, the site inventory does not have a 157-unit
surplus or 33% buffer as shown in Table 10-3 but rather has a 163 units shorƞall of capacity for very low-
income category for a deficit of 30%. The “net loss” impact of SB 330 on the projected development of
very low-income units is well known by Staff and was openly acknowledged by the Town’s Housing
Element consultant at the most recent Planning Commission meeƟng held November 15, 2023.
The lack of sites to accommodate the Town’s RHNA represents a fundamental alteraƟon to the Town’s
ability to meet Housing Element Law. To ensure that sufficient capacity exists in the Housing Element to
accommodate the RHNA throughout the planning period, a much larger buffer than 15% of very low-
income sites needs to be created and more importantly the 30% deficit eliminated.
5. Programs I, N, P and AJ create an obligaƟon to provide financial assistance from the Town’s
Affordable Housing Fund (BMP Programs funds) which has over the past three years realized less than
$100,000 “in lieu fees” paid in.
The programs noted above create an obligaƟon for the Town to provide financial assistance, monetary
subsidies, funding of home repairs and purchasing affordability covenants for the 6th cycle which the
Town has not analyzed as to the financial viability of the programs. The only funding source for these
programs is “in lieu fees” that the Town collects only if a developer elects to pay these fees in lieu of
building affordable housing under the Town’s BMP program. In limited circumstances, the Town can
solely determine payment. Over the past 3 years less than $100,000 has been paid into the Towns
Affordable Housing Fund (BMP Program funds) and as of June 30, 2023 the Affordable Housing Fund had
a balance $3.7m.
Without knowing whether these programs are financially viable, it is inappropriate for the Town to
include these programs in the Housing Element. CreaƟng programs where it is unknown whether
sufficient financial resources to implement the programs exist is a meaningless paper exercise and does
not affirmaƟvely further fair housing in the Town.
This issue was raised in another resident comment leƩer dated September 29, 2023. The Town’s
response that “BMP Housing in-lieu fees were allocated as directed by Town Council through the Town’s
annual strategic prioriƟes” does not address the fundamental lack of income received from “in-lieu fees”
to fund the financial obligaƟon created by the above-menƟoned programs. The financial viability of
these programs must be fully analyzed before a commitment can be made.
Summary
Thank you for allowing us to provide our comments. At the end of the day, we all want the same
outcome – a Housing Element that fully complies with State Housing Law and is cerƟfied by HCD as
quickly as possible.
Los Gatos Community Alliance
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1 DRAFT Affordability of Accessory Dwelling Units
DRAFT Affordability of Accessory Dwelling Units
A report and recommendations for RHNA 6
Prepared by the ABAG Housing Technical Assistance Team with Funding from REAP
9/8/2021
1. Overview
Accessory dwelling units (ADUs) are independent homes on a residential property with their
own cooking and sanitation facilities and outside access. They can either be part of or attached
to the primary dwelling or can be free standing/detached from the primary dwelling. Given
their smaller size, typically between 400-1000 square feet (Source: Implementing the Backyard
Revolution), they frequently offer a housing option that is more affordable by design. They also
offer infill development opportunities in existing neighborhoods and a potential supplemental
income source for homeowners. Similar are Junior ADUs (JADUs), which are even smaller living
units enclosed within a single-family structure. JADUs have independent cooking facilities and
outside access, however they may share sanitation facilities with the primary home. Both have
become an increasingly popular housing type in recent years.
Recent California legislation has facilitated policy changes at the local level that encourage ADU
development by streamlining the permitting process and shortening approval timelines. State
law requires jurisdictions to allow at least one ADU and JADU per residential lot. These
legislative and policy changes have increased ADU development across many California
communities.
In 2020, the Center for Community Innovation at the
University of California at Berkeley (UC Berkeley)
undertook a comprehensive, statewide survey of ADUs,
resulting in a document entitled “Implementing the
Backyard Revolution: Perspectives of California’s ADU
Homeowners”, released on April 22, 2021. This memo
uses and extends that research, providing a foundation
that Bay Area jurisdictions may build upon as they
consider ADU affordability levels while developing their
Housing Element sites inventory analyses. This report’s
affordability research has been reviewed by the
California Department of Housing and Community
Development (HCD). While they have not formally
accepted it, in initial conversations they did not raise
objections to the conclusions. Give HCD’s workload, it is
unlikely we will receive additional guidance.
Figure 1: Affordability of ADUs
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2 DRAFT Affordability of Accessory Dwelling Units
Figure 1 presents a summary of ADU affordability and Table 1 presents a recommendation for
assumptions for Housing Elements. See the main body of the report for more information on
methodology and assumptions.
We are recommending a conservative interpretation that assumes more moderate and above
moderate ADUs than the research found. These assumptions represent a floor for most
jurisdictions. If the market conditions in a particular jurisdiction warrant higher assumptions,
then additional analysis can be provided to HCD for consideration.
Table 1: Affordability Recommendations for ADUs for Housing Elements
Income Recommendation
Very Low Income (0-50% AMI) 30%
Low Income (51-80% AMI) 30%
Moderate Income (81-120% AMI) 30%
Above Moderate Income (120+ AMI) 10%
Notes: AMI = Area Median Income. See below for more information on assumptions.
Affirmatively Furthering Fair Housing Concerns
Although ADUs are often affordable, jurisdictions should be cautious about relying on them too
heavily because of fair housing concerns. Many ADUs are affordable to lower and moderate
income households because they are rented to family and friends of the homeowners. If
minorities are underrepresented among homeowners, the families and potentially friends of
the homeowners will be primarily white. Therefore, relying too heavily on ADUs could
inadvertently exacerbate patterns of segregation and exclusion. Additionally, ADUs often do
not serve large families, another important fair housing concern. Conversely, ADUs accomplish
an important fair housing goal by adding new homes in parts of the city that are more likely to
be areas of opportunity.
Jurisdictions with fair housing concerns may want to use more conservative assumptions based
on open market rentals, excluding units made available to family and friends, as summarized
below:
Table 1: Affordability Recommendations for ADUs for Jurisdictions with Fair Housing Concerns
Income Recommendation
Very Low Income 5%
Low Income 30%
Moderate Income 50%
Above Moderate Income 15%
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3 DRAFT Affordability of Accessory Dwelling Units
Further Outreach and Data
Although HCD has reviewed this memo and believes the conclusions are generally accurate, it is
still important for jurisdictions to ensure the information reflects local conditions. As part of
ground truthing the conclusions, jurisdictions should provide opportunity for the stakeholders
to comment on any assumptions, including affordability assumptions based on this memo.
2. UC Berkeley Survey
In the Fall and Winter of 2020, the University of California at Berkeley’s Center for Community
Innovation, in collaboration with Baird + Driskell Community Planning, conducted a statewide
survey of homeowners who had constructed ADUs in 2018 or 20191. Over 15,000 postcards
were mailed to households directing them to an online survey. The overall response rate was
approximately 5%, but Bay Area response rates were higher, up to 15% in some counties. In
total, 387 ADU owners from the Bay Area completed they survey, with 245 of those units
available on the long term rental market.
Key takeaways include:
• Just under 20% of Bay Area ADUs are made available at no cost to the tenant.
• An additional 16% are rented to friends or family, presumably at a discounted rent,
though the survey did not ask.
• Market-rate ADUs tend to rent at prices affordable to low and moderate income
households in most markets.
3. Methodology
ABAG further analyzed the raw data from the UC Berkeley survey, because the authors of
Implementing the Backyard Revolution did not present their results according to income
categories (e.g. very low income, low income, etc.).
This ABAG summary uses the affordability calculator published by the California Department of
Housing and Community Development (link) to define maximum income levels. HCD defines an
affordable unit as one where a household pays 30 percent or less of their annual pre-tax
income on housing.
The definition of affordable rents shifts with income category (Low, Very Low, etc.), household
size/unit size, and geography. The income categories are as follows: Very Low = under 50% of
Area Median Income (AMI), Low Income = 50-60% AMI, Moderate = 60-110% AMI.2
1 A summary is available here - http://www.aducalifornia.org/implementing-the-backyard-revolution/
2 Please note, these assumptions are more conservative than is typically used, but match HCD’s recommendations.
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4 DRAFT Affordability of Accessory Dwelling Units
Because some counties have different median incomes, the results are adjusted accordingly.
2020 AMIs were used because the survey was completed in 2020.
Additionally, ABAG made the following assumptions regarding persons per unit, which matched
HCD’s recommendations:
• Studios 1 person
• 1 Bedrooms 2 people
• 2 Bedrooms 3 people
• 3 Bedrooms 4 people
See the following document for information on HCD’s assumptions.
https://www.hcd.ca.gov/community-development/housing-element/docs/affordability-
calculator-2020.xlsx
4. Summary of ADU Use
Table 2, below, shows the usage of ADUs. Because this report concerns affordability of available
dwelling units, those not available for rent (short term rentals, home office and other) are
excluded from further analysis.
Table 3. Usage of Accessory Dwelling Units
Region
Friend/
Family
Rental
Family -
No Rent
Long Term
Rental
(Open
Market)
Short
Term
Rental
Home
Office Other
East Bay 12% 19% 27% 2% 14% 27%
Peninsula 16% 18% 28% 4% 14% 20%
North Bay 13% 16% 33% 2% 8% 28%
Bay Total (9 Counties) 14% 18% 29% 3% 13% 24%
Statewide Total 16% 19% 30% 2% 12% 21%
Other includes homeowners who live in the ADU, needs repairs, empty, used as extra bedroom, etc. The response rate in San
Francisco was too low for meaningful comparison so it is not presented separately, but is included in the Bay Area total. East
Bay includes Alameda and Contra Costa Counties, Peninsula includes San Mateo and Santa Clara Counties, North Bay includes
Marin, Sonoma and Napa Counties.
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5 DRAFT Affordability of Accessory Dwelling Units
5. Affordability of ADUs
Rental Data
The analysis found that many ADUs are made available to family members, often at no rent.
The survey did not query the rent of family/friend rentals, only asking if rent was charged.
Of those ADUs available on the open market (not rented to family or friends), most charged rents
between $1,200 and $2,200, as shown in in Figure 2.
Assigning ADUs to Income Categories
This report’s affordability analysis has two parts:
1. Market Rate ADUs: Those not rented to friends or family; and
2. Discount Rate ADUs: Those rented to family or friends for discounted or no rent
Market Rate ADUs
Market rate ADUs were usually affordable to low or moderate income households, based on
the methodology identified above. Depending on the part of the region, the ABAG analysis
found:
• Very Low Income: 0-7% of market rate units were affordable to very low income
• Low Income: 15-44% of market rate units were affordable to low income
• Moderate income: 40-70% of market rate units were affordable to moderate income
households.
• Above moderate: 9-15% of market rate units were affordable to above moderate
income households.
10%
31%
25%
15%
8%10%
0%
5%
10%
15%
20%
25%
30%
35%
$700 - $1200 $1201 - $1700 $1701 - $2200 $2201 - $2700 $2701 - $3200 $3200+
Figure 2. Average Monthly Rent
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6 DRAFT Affordability of Accessory Dwelling Units
The data is summarized in the chart below.
Table 4. Affordability of Market Rate Units
Very Low Low Moderate Above Moderate
East Bay 0% 15% 70% 15%
Peninsula 6% 31% 48% 15%
North Bay 7% 44% 40% 9%
This chart only shows ADUs rented on the open market. The response rate in San Francisco was too low for meaningful
comparison so it is excluded from this analysis.
Discount Rate ADUs
Based on previous HCD precedent, this analysis uses actual rents to determine affordability.
The occupant’s relationship to the owner is secondary, the relevant factor is the rent charged.
(Please note the potential fair housing concerns that can arise from this approach). Specifically,
this analysis assigns units made available to family or friends available at no rent as very low
income. Additionally, this analysis assigns units rented to family or friends as low income3.
Combined Market and Affordable ADUs
Table 5, below, combines the information for discounted and market rate ADUs.
The response rate in San Francisco was too low for meaningful comparison so it is not presented separately, but is included in
the Bay Area total.
3 The survey did not ask the rent of units that were rented to family members.
Table 5. Usage of No Rent/Discount Rent ADUs and Affordability - Combined
Region
Friend/
Family
Rental
Family -
No Rent
Very Low
Income
Rents
Low Income
Rents
Moderate
Income
Rents
Above Mod.
Income
Rents
East Bay 20% 33% 0% 7% 33% 7%
Peninsula 24% 28% 3% 15% 23% 7%
North Bay 20% 25% 4% 24% 22% 5%
Bay Total (9
Counties) 22% 28% 2% 14% 26% 7%
State-Wide Total 24% 28% 1% 9% 23% 14%
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7 DRAFT Affordability of Accessory Dwelling Units
Assigning the family/friends ADUs to income categories produces the following results:
This chart combines ADUs made available for free with Very Low Income and ADUs available for a discount with the Low
Income category. The response rate in San Francisco was too low for meaningful comparison so it is not presented as its own
line, but is included in the SF Bay Are Total.
Figure 2 shows affordability levels for the region. It is a graphical representation of the Bay Area
as a whole.
Table 6. Affordability Including Family/Friends Rentals
Region
Very Low
Income
Rents
Low
Income
Rents
Moderate
Income
Rents
Above Mod.
Income
Rents
East Bay 33% 27% 33% 7%
Peninsula 31% 39% 23% 7%
North Bay 29% 44% 22% 5%
Bay Total (9 Counties) 30% 36% 26% 7%
Statewide Total 29% 33% 23% 14%
Figure 2: Results shown for 9-county Bay Area. “Very low” rents
include units available to family or friends at no cost. “Low” rents
include discounted family rentals.
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8 DRAFT Affordability of Accessory Dwelling Units
6. Additional Research and Considerations
In general, ADUs are affordable for several reasons:
• Many units are available for no or low cost rent to family members or friends.
Additionally, a smaller number of owners intentionally rent their ADUs below market
because they believe affordable housing is important. Source: Implementing the
Backyard Revolution
• ADUs tend to be fewer square feet than units in apartment buildings after controlling
for bedroom size, which results in lower prices. Source: Wegmann & Chapple (2012)
• ADU owners tend to prefer their choice of tenant versus maximizing rent. Additionally,
they will often not significantly raise rents once they have a tenant they like. Source:
Baird + Driskell homeowner focus groups.
• ADU owners often do not know the value of their unit so they may underprice it
unintentionally. Source: Baird + Driskell homeowner focus groups.
A number of other studies have found that many ADUs are used as housing for friends or family
for free or very low cost, consistent with the UC Berkeley Report. A selection of these are
outlined below:
• A 2012 UC Berkeley publication entitled “Scaling up Secondary Unit Production in the
East Bay” indicates that approximately half of all secondary dwelling units are available
for no rent.4
• A 2018 report entitled “Jumpstarting the market for ADUs” surveyed ADUs in Portland,
Seattle, and Vancouver and found that approximately 17% of ADUs were occupied by a
friend or family member for free.5
• A 2014 analysis entitled “Accessory dwelling units in Portland, Oregon: evaluation and
interpretation of a survey of ADU owners” found that “18% of Portland ADUs are
occupied for free or extremely low cost.”6
7. Notes
This report was funded by the Regional Early Action Grant, which the state legislature provided to ABAG
and other council of governments. Analysis was conducted by Baird + Driskell Community Planning.
Please contact Josh Abrams, abrams@bdplanning.com for more information.
4https://communityinnovation.berkeley.edu/sites/default/files/scaling_up_secondary_unit_production_in_the_ea
st_bay.pdf?width=1200&height=800&iframe=true 5 http://ternercenter.berkeley.edu/uploads/ADU_report_4.18.pdf
6 https://accessorydwellings.files.wordpress.com/2014/06/adusurveyinterpret.pdf
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