15 Attachment 7 - November 29, 2023, Planning Commission Staff Report with Exhibits 4PREPARED BY: Erin Walters and Jocelyn Shoopman
Associate Planners
Reviewed by: Planning Manager, Community Development Director, and Town Attorney
110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6872
www.losgatosca.gov
TOWN OF LOS GATOS
PLANNING COMMISSION
REPORT
MEETING DATE: 11/29/2023
ITEM NO: 1
DATE: November 22, 2023
TO: Planning Commission
FROM: Joel Paulson, Community Development Director
SUBJECT: Consider and Make a Recommendation to the Town Council on the Draft
Revised 2023-2031 Housing Element. Location: Town-Wide. General Plan
Amendment Application GP-22-003.
RECOMMENDATION:
Consider the Draft Revised 2023-2031 Housing Element (November 2023) and adopt a
resolution recommending adoption by the Town Council.
EXECUTIVE SUMMARY:
The Town of Los Gatos has prepared a revised 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
Revised 2023-2031 Housing Element is structured for further 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 Revised 2023-2031 Housing
Element (November 2023) is available on the Town’s Housing Element website:
www.losgatosca.govHousingElement.
BACKGROUND:
On October 2, 2023, after the seven-day review period, the Town submitted the Draft Revised
Housing Element (September 2023), in response to the May 30, 2023, California Department of
Housing and Community Development (HCD) findings/comment letter to HCD for review. The
ATTACHMENT 7
PAGE 2 OF 6
SUBJECT: DRAFT REVISED 2023-2031 HOUSING ELEMENT/GP-22-003
DATE: November 22, 2023
BACKGROUND:
documents submitted to HCD can be viewed on the Housing Element update website at:
www.losgatosca.gov/HousingElement.
On November 7, 2023, staff and the consultant met with the Town’s HCD reviewer, received
preliminary feedback, and was subsequently provided with a Draft Preliminary Review Matrix on
the Draft Revised Housing Element submitted to HCD on October 2, 2023.
On November 15, 2023, the Planning Commission reviewed HCD’s preliminary comments and
staff’s responses, asked questions of staff and the Housing Element consultant, received verbal
public comment, and continued the item to a date certain of November 29, 2023, for a special
meeting to continue the public hearing for any additional public comment, deliberation, and a
recommendation.
On November 16, 2023, the Draft Revised Housing Element (November 2023) with
modifications in response to HCD’s Draft Preliminary Review Matrix received by the Town on
November 7, 2023, was made available to the public for a seven-day review as required by
Assembly Bill 215. Written comments on the document can be submitted through November
27, 2023, by 4:00 p.m. HCD requires that a track change copy and a clean copy of the
document be available for viewing during the seven-day review period (available at:
www.losgatosca.gov/housingelement). In addition, an email was sent to all individuals and
organizations that previously requested notice relating to the Town’s Housing Element Update.
The primary purpose of this agenda item is to provide a written recommendation to Town
Council on whether to adopt the Draft Revised Housing Element (November 2023) with
modifications in response to HCD’s Draft Preliminary Review Matrix received by the Town on
November 7, 2023 (Exhibit 2). A draft resolution will be provided in a future Addendum Report
for the November 29, 2023, Planning Commission meeting.
DISCUSSION:
A comprehensive list of the modifications made to the Draft Revised Housing Element, based
on the HCD Draft Preliminary Review Matrix provided on November 7, 2023, is provided is in
Exhibit 3. The following sections illustrate the more substantial modifications made to the
document.
A. Affirmatively Furthering Fair Housing (AFFH)
Appendix A of the Draft Revised Housing Element (November 2023) was modified in yellow
highlight to include additional maps and analysis to analyze available data comparing the
PAGE 3 OF 6
SUBJECT: DRAFT REVISED 2023-2031 HOUSING ELEMENT/GP-22-003
DATE: November 22, 2023
DISCUSSION (continued):
Town to the region on issues such as integration and segregation, disparities in access to
opportunity, and disproportionate housing needs.
B. Implementation Programs
The Implementation Programs in Section 10.6 of Chapter 10 of the Draft Revised Housing
Element (November 2023) were modified in yellow highlight to reflect modified metrics,
timelines, and suggested language as detailed in the HCD Draft Preliminary Review Matrix
(Exhibit 3).
C. Sites Inventory and Regional Housing Needs Allocation (RHNA) Credits/Surplus
The following modifications have been made in yellow highlight to the Sites Inventory and
Appendix D of the Draft Revised Housing Element (November 2023):
1. The removal of site A-2 (101 South Santa Cruz Avenue). Site A-2 had a minimum
capacity of 16 units that were allocated towards fulfilling the above moderate-income
category of the Town’s RHNA. On November 7, 2023, the Town Council introduced an
ordinance to amend the Chapter 29 of the Town Code to replace the Affordable Housing
Overlay Zone with the Housing Element Overlay Zone (HEOZ), as detailed in
Implementation Program AQ of the Draft Revised Housing Element (November 2023).
At the same Town Council meeting, the Town Council continued the item of applying
the HEOZ to the property located at 101 South Santa Cruz Avenue (site A-2) to a time in
which there was more certainty that it will be needed in order to certify the Housing
Element. In order to receive certification of the Housing Element from HCD in an
expeditious manner, staff has removed site A-2 from the Sites Inventory, as HCD will not
certify a Housing Element until all rezonings have been completed.
2. The removal of 96 Senate Bill 9 (SB 9) units that were allocated towards fulfilling the
above moderate-income category of the Town’s RHNA. Due to the request by HCD in
the Draft Preliminary Review Matrix to provide a specific sites analysis for SB 9, as well
as a nonvacant sites analysis demonstrating the likelihood of redevelopment, and in
order to receive certification of the Housing Element from HCD in an expeditious
manner, staff has removed the projection of 96 SB 9 units from the Housing Element.
Opportunities for the Town to monitor, promote, and incentivize SB 9 projects are still
made available through Implementation Programs AO and AV of the Draft Revised
Housing Element (November 2023). Additionally, housing units created through SB 9
are still able to be credited towards fulfilling the Town’s RHNA.
3. The RHNA planning period for the Association of Bay Area Governments (ABAG) region
started on June 30, 2022. Housing units that were finaled, permitted, or approved after
this date, or were under construction as of June 30, 2022, up to January 31, 2023, can
PAGE 4 OF 6
SUBJECT: DRAFT REVISED 2023-2031 HOUSING ELEMENT/GP-22-003
DATE: November 22, 2023
DISCUSSION (continued):
be credited toward the RHNA. The number of units that can be credited towards the
RHNA was reduced from 250 to 25, as staff confirmed that 225 of the 250 units had
previously been reported to the California Department of Finance.
4. The Sites Inventory has been revised to reflect the adjusted RHNA credits for housing
units that were finaled, permitted, or approved after this date, or were under
construction as of June 30, 2022; Accessory Dwelling Units (ADU) projections; and
Pipeline Projects that amount to 416 units. The remaining RHNA that needs to be
accommodated by the Sites Inventory is 1,577 units, as shown in yellow highlight in
Table 10-3 and Table D-2 of the Draft Revised Housing Element (November 2023) and
provided below. The Sites Inventory now accommodates a net capacity of
approximately 1,955 units, a surplus of approximately 24 percent above the remaining
RHNA of 1,577 units, which would equal a capacity of approximately 378 additional
units. These sites, in addition to ADU Projections, and Pipeline Projects have a total, net
capacity of 2,371 units.
Table 10-3 RHNA Credits and Sites Strategies
RHNA Credit
Affordability Credit
Very Low-
Income
Low-
Income
Moderate-
Income
Above-
Moderate
Income
Total
Entitled/Permitted/Under
Construction/Finaled (June 30, 2022, to
January 31, 2023)
- Single-Family Units and Housing Projects 0 0 0 2 2
- ADUs 0 3 11 9 23
Pipeline Projects 0 1 0 190 191
Projected ADUs (1/1/2023-1/31/2031) 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
Housing Element Overlay Zone (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 33% 45% 37% 3% 24%
Source: Town of Los Gatos 6th Cycle 2023-2031 Housing Element (November 2023)
PAGE 5 OF 6
SUBJECT: DRAFT REVISED 2023-2031 HOUSING ELEMENT/GP-22-003
DATE: November 22, 2023
DISCUSSION (continued):
Next Steps
As required by Assembly Bill 215, the Draft Revised Housing Element (November 2023) has been
made available to the public for a seven-day review period prior to the interim resubmittal to
HCD. The seven-day public review period will run from November 17, 2023, until 4:00 p.m. on
November 27, 2023. The Town expects to receive its comment letter from HCD on the Draft
Revised Housing Element (November 2023) by December 1, 2023.
The Planning Commission’s recommendation on the adoption of the Draft Revised Housing
Element is tentatively scheduled for consideration by the Town Council on December 19, 2023.
Should the Town Council adopt the Draft Revised Housing Element, the Town must post the
revision 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 the Draft Revised Housing Element to HCD.
Based on HCD’s review, to be completed by December 1, 2023, it is possible that additional
revisions may be needed before HCD would certify the Housing Element. This means that
additional Planning Commission and Town Council hearings for adoption of a revised Housing
Element may need to be conducted.
ENVIRONMENTAL ASSESSMENT:
An Environmental Analysis was prepared for the Housing Element update. All potentially
significant effects have been analyzed adequately in the Town of Los Gatos 2040 General Plan
Environmental Impact Report (EIR), pursuant to applicable standards including CEQA Guidelines
Section 15168(c)2, because the Housing Element update is consistent with the growth
projections evaluated in the General Plan EIR.
PUBLIC COMMENTS:
Public comments received between 11:01 a.m., Wednesday, November 15, 2023, and 11:00
a.m., Wednesday, November 22, 2023, are included as Exhibit 4.
PAGE 6 OF 6
SUBJECT: DRAFT REVISED 2023-2031 HOUSING ELEMENT/GP-22-003
DATE: November 22, 2023
CONCLUSION:
A. Recommendation
Staff recommends that the Planning Commission:
1. Receive and consider public comments;
2. Consider the Draft Revised Housing Element (November 2023) (Exhibit 2), and the
Environmental Analysis (Exhibit 1); and
3. Adopt a resolution forwarding a recommendation to the Town Council to adopt the
Draft Revised Housing Element (November 2023) (Exhibit 2).
EXHIBITS:
Previously received (available online at: www.losgatosca.gov/HousingElement):
1. Environmental Analysis
2. Draft Revised 2023-2031 Housing Element (November 2023)
3. Response Memorandum to the HCD Draft Preliminary Review Matrix
Received with this Staff Report:
4. Public Comment received between 11:01 a.m., Wednesday, November 15, 2023, and 11:00
a.m., Wednesday, November 22, 2023
Los Gatos Community Alliance
Facts Matter; Transparency Matters; Honesty Matters
www.lgca.town
November 19, 2023
Laurel Prevetti, Town Manager
Town of Los Gatos
110 E Main St
Los Gatos, CA 94050
Via email: LPrevetti@losgatosca.gov
Dear Ms. Prevetti:
The Los Gatos Community Alliance (LGCA) has been made aware that on November 16, 2023,
the Town submitted a newly revised draft 2023-2031 Housing Element (dated November 2023)
to the California Department of Housing and Community Development (HCD) for review. This
latest revision incorporates substantive changes from the prior draft. This revised draft Housing
Element was not reviewed or discussed by the Town’s Housing Element Advisory Board (HEAB)
or the Town’s Planning Commission prior to being submitted to HCD. It also was not made
available to the public prior to submission to HCD.
On November 15, the night before the Town submitted the revised Housing Element draft, the
Planning Commission held a special meeting for which the only agenda item was, “Consider and
Make a Recommendation to the Town Council on the Draft Revised 2023-2031 Housing
Element.” Because the newly revised November draft was not on the agenda and was unknown
to the public at the time, the Planning Commission and the public were denied any opportunity
to review and comment on the draft that was submitted to HCD the very next day.
We remind you of California Government Code Section 65585(b)(3) (annotated copy attached)
which explicitly states, “For any subsequent draft revision, the local government shall post the
draft revision on its internet website and shall email a link to the draft revision to all individuals
and organizations that have previously requested notices relating to the local government’s
housing element at least seven days before submitting the draft revision to the department”
(emphasis added).
The required communications were not made 7 days prior to submitting the newly revised draft
to HCD, in direct contravention of the aforementioned Code section. Instead, the Town posted
the November 2023 Housing Element revision on its website on November 16, 2023, the same
day it was submitted to HCD. Also on that day, the Town sent email links to individuals who had
requested notices.
HCD has stated on every Housing Element comment letter received by the Town, “public
participation in the development, adoption and implementation of the housing element is
essential to effective housing planning.” Furthermore, every HCD comment letter reminded the
Town of the obligatory 7-day public comment period. We direct your attention to appendix E
“Public Participation” on page 11 of HCD’s comment letter of January 12, 2023 (annotated copy
attached), for an example of HCD’s explicit guidance on this topic.
EXHIBIT 4
Laurel Prevetti November 19, 2023 Page 2
Los Gatos Community Alliance
Facts Matter; Transparency Matters; Honesty Matters
www.lgca.town
In addition, on its website at https://www.hcd.ca.gov/planning-and-community-
development/housing-elements, HCD imposes the following requirement for revised
submittals: “in the element or in a cover letter, please indicate compliance with AB 215
requirements to post the draft revision on the local government’s website and to email a link to
all individuals and organizations that have previously requested notices relating to the local
government’s housing element at least seven days before submitting the draft revision to HCD.
Please note, any revisions received during the course of HCD's review are also subject to the
seven-day posting requirement prior to submittal to HCD.”
We therefore request the Town to:
1. provide us via return email with a copy of the cover letter or other materials submitted
to HCD that meet the above-referenced obligation to indicate compliance with the
AB 215 notice requirements
2. advise HCD of the Town’s failure to observe Government Code Section 65585(b)(3) and
inform HCD the Town is rescinding its submission of the draft Housing Element in order
properly to provide the required 7-day public review period and consider public
comment prior to submitting a revised draft Housing Element.
Lastly, this is to inform you that the LGCA plans to submit comments on the November 2023
draft of the housing element once it is made available to the public with the mandated 7 day
public comment period.
Thank you for your attention to this very important matter.
Rick Van Hoesen
Jak Van Nada
Los Gatos Community Alliance
Attachments
HCD comment letter to the Town of Los Gatos dtd Jan. 12, 2023 (annotated)
Cal. Gov. Code § 65585 (annotated)
Copies via email to
Wendy Wood, Town Clerk
Los Gatos Town Council members:
Maria Ristow, Mayor
Mary Badame, Vice Mayor
Matthew Hudes
Rob Moore
Rob Rennie
Joel Paulson, LG Planning Commission
Gabrielle Whelan, Los Gatos Town Attorney
California Department of Housing and
Community Development (HCD)
Paul McDougall
Jose Jaurequi
Los Gatos Community Alliance:
Phil Koen
Cal. Gov. Code § 65585
Section 65585 - Draft element or draft amendment submitted to department
(a) In the preparation of its housing element, each city and county shall consider the
guidelines adopted by the department pursuant to Section 50459 of the Health and Safety
Code. Those guidelines shall be advisory to each city or county in the preparation of its
housing element.
(b)
(1) At least 90 days prior to adoption of a revision of its housing element pursuant to
subdivision (e) of Section 65588, or at least 60 days prior to the adoption of a subsequent
amendment to this element, the planning agency shall submit a draft element revision or
draft amendment to the department. The local government of the planning agency shall
make the first draft revision of a housing element available for public comment for at least
30 days and, if any comments are received, the local government shall take at least 10
business days after the 30-day public comment period to consider and incorporate public
comments into the draft revision prior to submitting it to the department. For any
subsequent draft revision, the local government shall post the draft revision on its internet
website and shall email a link to the draft revision to all individuals and organizations that
have previously requested notices relating to the local government's housing element at
least seven days before submitting the draft revision to the department.
(2) The planning agency staff shall collect and compile the public comments regarding the
housing element received by the city, county, or city and county, and provide these
comments to each member of the legislative body before it adopts the housing element.
(3) The department shall review the draft and report its written findings to the planning
agency within 90 days of its receipt of the first draft submittal for each housing element
revision pursuant to subdivision (e) of Section 65588 or within 60 days of its receipt of a
subsequent draft amendment or an adopted revision or adopted amendment to an element.
The department shall not review the first draft submitted for each housing element
revision pursuant to subdivision (e) of Section 65588 until the local government has made
the draft available for public comment for at least 30 days and, if comments were
received, has taken at least 10 business days to consider and incorporate public comments
pursuant to paragraph (1).
(c) In the preparation of its findings, the department may consult with any public agency,
group, or person. The department shall receive and consider any written comments from
any public agency, group, or person regarding the draft or adopted element or amendment
under review.
(d) In its written findings, the department shall determine whether the draft element or draft
amendment substantially complies with this article.
(e) Prior to the adoption of its draft element or draft amendment, the legislative body shall
consider the findings made by the department. If the department's findings are not available
within the time limits set by this section, the legislative body may act without them.
1
(f) If the department finds that the draft element or draft amendment does not substantially
comply with this article, the legislative body shall take one of the following actions:
(1) Change the draft element or draft amendment to substantially comply with this article.
(2) Adopt the draft element or draft amendment without changes. The legislative body
shall include in its resolution of adoption written findings which explain the reasons the
legislative body believes that the draft element or draft amendment substantially complies
with this article despite the findings of the department.
(g) Promptly following the adoption of its element or amendment, the planning agency shall
submit a copy to the department.
(h) The department shall, within 90 days, review adopted housing elements or amendments
and report its findings to the planning agency.
(i)
(1)
(A) The department shall review any action or failure to act by the city, county, or city
and county that it determines is inconsistent with an adopted housing element or Section
65583, including any failure to implement any program actions included in the housing
element pursuant to Section 65583. The department shall issue written findings to the
city, county, or city and county as to whether the action or failure to act substantially
complies with this article, and provide a reasonable time no longer than 30 days for the
city, county, or city and county to respond to the findings before taking any other action
authorized by this section, including the action authorized by subparagraph (B).
(B) If the department finds that the action or failure to act by the city, county, or city and
county does not substantially comply with this article, and if it has issued findings
pursuant to this section that an amendment to the housing element substantially
complies with this article, the department may revoke its findings until it determines
that the city, county, or city and county has come into compliance with this article.
(2) The department may consult with any local government, public agency, group, or
person, and shall receive and consider any written comments from any public agency,
group, or person, regarding the action or failure to act by the city, county, or city and
county described in paragraph (1), in determining whether the housing element
substantially complies with this article.
(j) The department shall notify the city, county, or city and county and may notify the office
of the Attorney General that the city, county, or city and county is in violation of state law if
the department finds that the housing element or an amendment to this element, or any
action or failure to act described in subdivision (i), does not substantially comply with this
article or that any local government has taken an action in violation of the following:
(1) Housing Accountability Act (Section 65589.5).
(2) Section 65863.
(3) Chapter 4.3 (commencing with Section 65915).
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Section 65585 ... Cal. Gov. Code § 65585
(4) Section 65008.
(5) Housing Crisis Act of 2019 (Chapter 654, Statutes of 2019, Sections 65941.1, 65943,
and 66300).
(6) Section 8899.50.
(7) Section 65913.4.
(8) Article 11 (commencing with Section 65650).
(9) Article 12 (commencing with Section 65660).
(10) Section 65913.11.
(11) Section 65400.
(12) Section 65863.2.
(13) Chapter 4.1 (commencing with Section 65912.100).
(k) Commencing July 1, 2019, prior to the Attorney General bringing any suit for a
violation of the provisions identified in subdivision (j) related to housing element
compliance and seeking remedies available pursuant to this subdivision, the department
shall offer the jurisdiction the opportunity for two meetings in person or via telephone to
discuss the violation, and shall provide the jurisdiction written findings regarding the
violation. This paragraph does not affect any action filed prior to the effective date of this
section. The requirements set forth in this subdivision do not apply to any suits brought for
a violation or violations of paragraphs (1) and (3) to (9), inclusive, of subdivision (j).
(l) In any action or special proceeding brought by the Attorney General relating to housing
element compliance pursuant to a notice or referral under subdivision (j), the Attorney
General may request, upon a finding of the court that the housing element does not
substantially comply with the requirements of this article pursuant to this section, that the
court issue an order or judgment directing the jurisdiction to bring its housing element into
substantial compliance with the requirements of this article. The court shall retain
jurisdiction to ensure that its order or judgment is carried out. If a court determines that the
housing element of the jurisdiction substantially complies with this article, it shall have the
same force and effect, for purposes of eligibility for any financial assistance that requires a
housing element in substantial compliance and for purposes of any incentives provided
under Section 65589.9, as a determination by the department that the housing element
substantially complies with this article.
(1) If the jurisdiction has not complied with the order or judgment after 12 months, the
court shall conduct a status conference. Following the status conference, upon a
determination that the jurisdiction failed to comply with the order or judgment compelling
substantial compliance with the requirements of this article, the court shall impose fines
on the jurisdiction, which shall be deposited into the Building Homes and Jobs Trust
Fund. Any fine levied pursuant to this paragraph shall be in a minimum amount of ten
thousand dollars ($10,000) per month, but shall not exceed one hundred thousand dollars
3
Section 65585 ... Cal. Gov. Code § 65585
($100,000) per month, except as provided in paragraphs (2) and (3). In the event that the
jurisdiction fails to pay fines imposed by the court in full and on time, the court may
require the Controller to intercept any available state and local funds and direct such funds
to the Building Homes and Jobs Trust Fund to correct the jurisdiction's failure to pay. The
intercept of the funds by the Controller for this purpose shall not violate any provision of
the California Constitution.
(2) If the jurisdiction has not complied with the order or judgment after three months
following the imposition of fees described in paragraph (1), the court shall conduct a
status conference. Following the status conference, if the court finds that the fees imposed
pursuant to paragraph (1) are insufficient to bring the jurisdiction into compliance with the
order or judgment, the court may multiply the fine determined pursuant to paragraph (1)
by a factor of three. In the event that the jurisdiction fails to pay fines imposed by the
court in full and on time, the court may require the Controller to intercept any available
state and local funds and direct such funds to the Building Homes and Jobs Trust Fund to
correct the jurisdiction's failure to pay. The intercept of the funds by the Controller for this
purpose shall not violate any provision of the California Constitution.
(3) If the jurisdiction has not complied with the order or judgment six months following
the imposition of fees described in paragraph (1), the court shall conduct a status
conference. Upon a determination that the jurisdiction failed to comply with the order or
judgment, the court may impose the following:
(A) If the court finds that the fees imposed pursuant to paragraphs (1) and (2) are
insufficient to bring the jurisdiction into compliance with the order or judgment, the
court may multiply the fine determined pursuant to paragraph (1) by a factor of six. In
the event that the jurisdiction fails to pay fines imposed by the court in full and on time,
the court may require the Controller to intercept any available state and local funds and
direct such funds to the Building Homes and Jobs Trust Fund to correct the jurisdiction's
failure to pay. The intercept of the funds by the Controller for this purpose shall not
violate any provision of the California Constitution.
(B) The court may order remedies available pursuant to Section 564 of the Code of Civil
Procedure, under which the agent of the court may take all governmental actions
necessary to bring the jurisdiction's housing element into substantial compliance
pursuant to this article in order to remedy identified deficiencies. The court shall
determine whether the housing element of the jurisdiction substantially complies with
this article and, once the court makes that determination, it shall have the same force
and effect, for all purposes, as the department's determination that the housing element
substantially complies with this article. An agent appointed pursuant to this paragraph
shall have expertise in planning in California.
(4) This subdivision does not limit a court's discretion to apply any and all remedies in an
action or special proceeding for a violation of any law identified in subdivision (j).
(m) In determining the application of the remedies available under subdivision (l), the court
shall consider whether there are any mitigating circumstances delaying the jurisdiction from
4
Section 65585 ... Cal. Gov. Code § 65585
coming into compliance with state housing law. The court may consider whether a city,
county, or city and county is making a good faith effort to come into substantial compliance
or is facing substantial undue hardships.
(n) Nothing in this section shall limit the authority of the office of the Attorney General to
bring a suit to enforce state law in an independent capacity. The office of the Attorney
General may seek all remedies available under law including those set forth in this section.
(o) Notwithstanding Sections 11040 and 11042, if the Attorney General declines to
represent the department in any action or special proceeding brought pursuant to a notice or
referral under subdivision (j) the department may appoint or contract with other counsel for
purposes of representing the department in the action or special proceeding.
(p) Notwithstanding any other provision of law, the statute of limitations set forth in
subdivision (a) of Section 338 of the Code of Civil Procedure shall apply to any action or
special proceeding brought by the Office of the Attorney General or pursuant to a notice or
referral under subdivision (j), or by the department pursuant to subdivision (o).
Ca. Gov. Code § 65585
Amended by Stats 2022 ch 657 (AB 2653),s 2.3, eff. 1/1/2023.
Amended by Stats 2022 ch 647 (AB 2011),s 2, eff. 1/1/2023.
Amended by Stats 2022 ch 459 (AB 2097),s 1, eff. 1/1/2023.
Amended by Stats 2021 ch 363 (SB 478),s 2.5, eff. 1/1/2022.
Amended by Stats 2021 ch 342 (AB 215),s 1, eff. 1/1/2022.
Amended by Stats 2020 ch 370 (SB 1371),s 174, eff. 1/1/2021.
Amended by Stats 2019 ch 668 (SB 113),s 3, eff. 10/9/2019.
Amended by Stats 2019 ch 159 (AB 101),s 4, eff. 7/31/2019.
Amended by Stats 2017 ch 370 (AB 72),s 1, eff. 1/1/2018.
Amended by Stats 2016 ch 271 (AB 2685),s 1, eff. 1/1/2017.
Amended by Stats 2000 ch 471 (AB 2008), s 2, eff. 1/1/2001.
5
Section 65585 ... Cal. Gov. Code § 65585
1
November 14, 2023
Dear Members of the Planning Commission,
The Los Gatos Community Alliance is writing to you as a group of concerned residents regarding the draft
Revised 2023-2031 Housing Element. We have specific comments regarding Table 10-3 which is found in
the Staff report for tonight’s meeting.
1 – Single Family and Housing units entitled – June 30, 2022 to January 31, 2023
On D-64 of the Housing Element it is stated that “units that are made available during the RHNA
projection period (June 30, 2022 through January 31, 2031) can be credited toward the RHNA”. Table 10-
3 reflects 227 housing units that the Town claims were “finaled, permitted, or approved after June 30,
2022 or were under construction as of June 30, 2022”. Unfortunately, this does not conform to the
instructions in the comment letter HCD issued to ABAG on January 12, 2022 ( see attachment 2) nor the
HCD comment letter issued to SCAG dated May 21, 2012 (see attachment 3).
According to both HCD comment letters, “local governments may take RHNA credit for “new” units
approved, permitted, or produced to accommodate “new” housing projected since the start date of the
“new” RHNA projection period.” Furthermore, the comment letters state, “units approved, permitted, or
produced before the “new” RHNA projection period relate to the previous housing need and can only be
credited and reported for the previous RHNA and HE update cycle.” For Los Gatos, the “new” RHNA
projection period started June 30, 2022.
Of the 227 units claimed as a credit toward the 6th cycle RHNA, 225 units were permitted prior to the
start date of the projection period of June 30, 2022. This includes the 49 below market rate units on the
North 40 Phase 1 parcel (APN 424-07-100). In addition, all 225 units have been included in the 5th cycle
results (refer to page E-12) and reported in either the 2020, 2021 or 2022 Annual Progress Reports to
HCD. Based on this, all 225 units need to be excluded from Table 10-3 and deducted from the total
credits.
To further remove any doubt about how units “approved, permitted or produced” since the start of the
6th cycle RHNA should be counted, we have attached pages from the adopted and certified 6th cycle
Housing Element for the City of Long Beach (see attachment 4). It is clearly disclosed in Long Beach’s
Housing Element that “housing developments that have been proposed or have received entitlements
but are not expected to be issued building permits until after July 1, 2021 (this is the start date for
SCAG’s 6th cycle projection period) can be credited toward the 2021 – 2029 RHNA”. We find it hard to
imagine that HCD would allow Los Gatos to double count units in both the 5th and 6th cycle while not
allowing other jurisdictions in the State to also do so.
Removing the double counted 225 units reduces the surplus to 490 units from the 715 units shown on
Table 10-3 and will provide a buffer of 39% above the RHNA 1,993 units. Additionally, the surplus of 206
units for very low-income category will be reduced to 157 units or 29% of RHNA 537 very low-income
units.
2
2. Projected ADU Affordability
On D-60 of the Housing Element it is disclosed that the income distribution for ADU’s is 30% very low,
30% low, 30% moderate and 10% above moderate income. This distribution was based on “ABAG’s pre-
approved ADU Affordability Survey.”
We have attached (see attachment 5) the referenced survey which in fact was released as a “draft”
survey prepared by ABAG dated September 8, 2021. While the draft report was reviewed by HCD, HCD
did not formally accept it and did not raise objections to the conclusions. HCD believed the conclusions
were generally accurate and added that jurisdictions should ensure the information reflects local
conditions. To that end, HCD stated jurisdictions should provide opportunity for stakeholders to
comment on any assumptions, including affordability assumptions based on the draft report. ABAG did
not expect to receive any additional guidance from HCD.
The survey does include a recommendation for ADU’s income distribution as discussed in the Housing
Element. However, the survey also recommends a more conservative distribution for jurisdictions with
fair housing concerns, which Los Gatos clearly has. This distribution is 5% very low, 30% low, 50%
moderate and 15% above. This distribution more accurately reflects open market rentals, excluding
units made available to family and friends and has been adopted by other ABAG jurisdictions. This
distribution is further validated by data in the survey which shows the following distribution of ADU
market rate units on the Peninsula – 6% very low, 31% low, 48% moderate and 15% above.
Lastly, the Town’s actual experience for ADUs permitted between June 30, 2022 and January 30, 2023
shows the following income distribution – 0% very low, 12% low, 48% moderate and 40% above. Based
on this we believe a more reasonable income distribution for ADUs would be 5% very low, 30% low, 50%
moderate and 15% above, which was the recommendation for jurisdictions with fair housing concerns.
Furthermore, we find it hard to believe HCD will approve the distribution in Table 10-3 given the fact that
there is no evidence in the record to support the distribution assumption and it was changed from prior
submissions of Table 10-3 made to HCD.
Adopting the distribution recommended for jurisdictions with AFFH concerns, would result in 50 units
deducted from the very low category and 40 units added to the moderate category and 10 units added
to the above category. Making this adjustment would further reduce the 206 surpluses for very low-
income category to 107 units (taking into consideration the 49 units discussed above) which represents
only a 20% buffer above the RHNA 537 very low-income units.
3. Site B-1 adjustment to reflect SB 330 application
On page D-21 there is a description of site B-1, the Los Gatos Lodge. The site inventory programmed this
8.81-acre site for 262 units at a planned development density of 30 DU per acre. The income distribution
of these units is 86 units very low, 86 units low, 62 units moderate and 28 units above.
The property owner has filed a preliminary SB 330 application which vests the development rights of the
parcel, and a final application is expected to be received by January 2, 2024. The SB 330 application calls
for the development of 158 units at a development density of 17.9 DU per acre. It should be pointed out
this development density is materially below the 30 DU minimum density programmed by the HEOZ
zoning. The Housing Element does not discuss the difference in development densities and raises
questions regarding Program AQ – Zoning Code Amendments since there is no mention as to a minimum
3
allowable development density and appears to be inconsistent with Table C-3 - Proposed HEOZ Densities
by underlying Land Use and Zoning Designation.
Based on the SB 330 application, it appears that a reasonable development assumption should be 0 units
very low, 32 units low, 0 units moderate and 126 above for a total of 158 units. This would result in 86
units being deducted from very low units, 54 units being deducted from low units, 62 units being
deducted from moderate, and 98 units being added to above.
4. Site D-1 adjustment to reflect SB 330 application
On page D-35 there is a description of site D-1, North 40 Phase II. The site inventory programmed this
15.6-acre site for 452 net units at a planned development density of approximately 30 DU per acre. The
income distribution of these units is 184 units very low, 89 units low, 92 units moderate and 87 units
above.
The property owner has filed a final SB 330 application which vests the development rights of the parcel.
The SB 330 final application calls for the development of 451 units at a development density of 28.6 DU
per acre. It should be pointed out this development density is below the 30 DU minimum density
programmed by the HEOZ zoning. The Housing Element does not address the difference in development
densities and raises a question regarding Program D – Additional Housing Capacity for the North 40
Specific Plan, Program AQ – Zoning Code Amendment and appears to be inconsistent with Table C-3 -
Proposed HEOZ Densities by underlying Land Use and Zoning Designation.
Based on the SB 330 application, it appears that a reasonable development assumption should be 0 units
very low, 91 units low, 1 unit moderate and 359 above for a total of 451 units. This would result in 184
units being deducted from very low units, 2 units being added to low, 91 units being deducted from
moderate, and 272 units being added to above.
5. Site I-1 adjustment to reflect SB 330 application
On page D-59 there is a description of site I-1, Alberto Way. The site inventory programmed this 2.15-
acre site for 60 units at a planned development density of approximately 27.9 DU per acre. The income
distribution of these units is 0 units very low, 4 units low, 4 units moderate and 52 units above. The site
inventory reflects the preliminary SB 330 application development plan. This is inconsistent with how the
site inventory planned site B-1, which ignored the SB 330 preliminary application.
The property owner has filed a final SB 330 application which vests the development rights of the parcel.
The SB 330 application calls for the development of 52 units at a development density of 24.1 DU per
acre. It should be pointed out this development density is below the 30 DU minimum density
programmed by the HEOZ zoning. The Housing Element does not address the difference in development
densities and appears to be inconsistent with Table C-3 - Proposed HEOZ Densities by underlying Land
Use and Zoning Designation.
Based on the SB 330 application, it appears that a reasonable development assumption should be 0 units
very low, 8 units low, 0 unit moderate and 44 above for a total of 52 units. This would result in 4 units
being added to low, 4 units being deducted from moderate, and 8 units being deducted from above. We
made this adjustment to Table 10-3.
4
Summary and Conclusion
Summing all the adjustments noted above, materially reduces the total credits and HEOZ sites shown in
Table 10-3. On an adjusted basis it is reasonably expected that there will be 2,370 units developed
during the 6th cycle which will provide a 19% buffer above the RHNA 1,993. In addition, reflecting the
above adjustments the income distribution will be 374 very low units, 373 low units, 295 moderate units
and 1,328 above units (see attachment 1).
Given this level of development, the Town will fail to meet the 6th cycle RHNA of 537 very low units and
320 moderate units. This result clearly does not meet the desired outcome of Program AS, which was to
provide adequate sites for housing, RHNA rezoning and lower income households on nonvacant and
vacant sites, while providing a 25% buffer for all income categories. Only the above moderate-income
group meets this program’s goal with a 61% buffer.
The unmistakable conclusion is the Town must identify more parcels to be included in the site inventory
and rezoned as part of the HEOZ to meet the 6th cycle RHNA by income category. If this is not done, it is
unlikely the HCD will certify this fourth submission.
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 certified by HCD as
quickly as possible.
Los Gatos Community Alliance
Part B
Adjusted Table 10-3 RHNA Credits and Site Strategies
Total Credits and HEOZ sites (carry down from Part A)743 421 413 1,131 2,708
Less adjustments:
1) Single Family and Housing Projects units permited and counted in RHNA 5th cycle (49)0 (1)(175)(225)
2) Projected ADU affordability adjustement to reflect market conditions and AFFH Concerns (50)0 40 10 0
3) Site B-1 to conform affordability levels to filed SB 330 application (86)(54)(62)98 (104)
4) Site D-1 to conform affordability levels to filed SB 330 final application (184)2 (91)272 (1)
5) Site I-1 to conform affordability levels to filed SB 330 final application 0 4 (4)(8)(8)
>> Total adjustments (369)(48)(118)197 (338)
Adjusted Total Credits and HEOZ sites 374 373 295 1,328 2,370
RHNA 537 310 320 826 1,993
Surplus/(Deficit) over RHNA (163)63 (25)502 377
% Surplus/(Deficit)(30.4)20.3 (7.8)60.8 18.9
STATE OF CAl !FORNIA -B! JS!NFSS TRANSpORTATION AND HOI !SING AGENCY
DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT
DIVISION OF HOUSING POLICY DEVELOPMENT
1800 Third Street, Suite 430
P. 0. Box 952053
Sacramento, CA 94252-2053
(916) 323-3177/ FAX (916) 327-2643
www.hcd.ca.gov
May 21, 2012
Ms. Huasha Liu
Planning Director, Land Use & Environmental Planning Department
SCAG
818 West ih Street
Los Angeles, CA 90017
RE: Clarification of Housing Element (HE) Planning Period and Due Date, Regional
Housing Need Assessment (RHNA) Projection Period, and Eligibility of Jurisdictions to
Take RHNA Credit
Dear Ms. Liu:
The Department is responding to your recent request, on behalf of some members of the
Southern California Association of Governments (SCAG), for the Department (HCD) to
address (a) specific statutory changes regarding the HE "planning" period and due date
and the RHNA "projection" period applicable to SCAG jurisdictions for the 5th RHNA and
HE update cycle, and (b) jurisdictions' eligibility to take RHNA credit for housing units
approved, permitted, or produced.
The brief answers to your questions are that SCAG's RHNA "projection" period is from
January 2014 through October 2021, whereas the HE due date is October 15, 2013 for the
"planning" period from October 2013 through October 2021. The anomaly of the HE due
date for SCAG jurisdictions (October 2013) preceding the RHNA start date (January 2014)
by three (3) months is due to (a) legislative changes and statutory definitions described
below and (b) the date that SCAG adopted its Regional Transportation Plan. Statutory
changes applicable for the 5th and subsequent HE update cycles specify the HE due date
to be 18 months from the RTP adoption date. The October 2013 HE due date for SCAG
jurisdictions follows 18 months from SCAG's April 5, 2012 RTP adoption date.
Regarding jurisdictions taking RHNA credit, nothing has changed. The jurisdiction
authorized to permit a particular housing development can take RHNA credit for "new"
units approved, permitted, or produced to accommodate "new" housing need projected
since the start date of the "new" RHNA projection period. Units approved, permitted, or
produced before the start of the "new" RHNA projection period relate to the previous
housing need and can only be credited and reported for the previous RHNA and HE update
cycle.
Ms. Huasha Liu
Page 2
Legislative Changes to RHNA Projection Period and HE Planning Period and Due Date
Senate Bill 375 (Steinberg, Chapter 728, 2008 Statutes and Senate Bill 575 (Steinberg,
Chapter 354, 2009 Statutes) added Government Code (GC) Sections defining HE planning
period and due date and RHNA projection period per below italicized text:
RHNA Projection Period
The new projection period shall begin on the date of December 31 or June 30 that most
closely precedes the end of the previous projection period.” [GC 65588(e)(6)]
“Projection Period” shall be the time period for which the regional housing need is
calculated. [GC 65588(f)(2)]
Note: HCD uses January 1 or July 1 dates for RHNA determination start date
purposes as these are the effective dates used by Department of Finance (DOF) in
updating DOF housing estimates and population projections. Also, once HCD has
determined the RHNA, there is no statutory authority to make any revision to the
RHNA projection period or RHNA determination.
HE Planning Period and Due Date
“Planning Period” shall be the time period between the due date for one housing element
and the due date for the next housing element. [GC 65588(f)(1)]
For purposes of determining the existing and projected need for housing within a region
pursuant to Sections 65584 to 65584.08, inclusive, the date of the next scheduled
revision of the housing element shall be deemed to be the estimated adoption date of
the regional transportation plan update described in the notice provided to the
Department of Transportation plus 18 months. [GC 65588(e)(5)]
Note: For HE due dates falling before and after the 15th day of a month, HCD
rounds “up” the HE due date to fall on either the 15th day or last day of a month.
Also, while a change in the “actual” adoption date of the RTP from the “estimated”
adoption date of the RTP (after HCD has determined the RHNA and identified
the HE due date) can subsequently cause a change to the HE due date and
HE “planning” period, it would not change the RHNA determination or “projection”
period.
Ms. Huasha Liu
Page 3
Thank you for the opportunity to address questions raised by SCAG's membership. If
SCAG or its members have questions, please contact Anda Draghici, Housing Policy
Specialist, by email (adraghici@hcd.ca .gov) or telephone (916.327 -2640).
Sincerely, ~~:!~
Acting Deputy Director
Appendix
“This plan needs to address homelessness,
walkability, public transit, job opportunities
near new developments, and neighborhood
protections from the effects of gentrification.”
Long Beach Resident - Housing Element
Community Meeting
7
Appendix | Site Inventory C-3
C
AppendixFebruary 2022
In 2020 SCAG prepared a Regional Accessory Dwelling
Unit Affordability Analysis based on a rent survey of ADUs
across the region. This Affordability Analysis has been
approved by HCD for use in the SCAG region to establish
the potential affordability levels of ADUs expected to be
constructed during the Housing Element planning period.
Long Beach belongs to the Los Angeles County II subregion
in this study, which consists of ADUs with the following
income/affordability distribution:
»Extremely Low Income: 15.0 percent
»Very Low Income: 8.5 percent
»Low Income: 44.6 percent
»Moderate Income: 2.1 percent
»Above Moderate Income: 29.8 percent
C.2.2 Entitled and Proposed Developments
Because the RHNA for this 2021-2029 Housing Element
begins on June 30, 2021, housing developments that
have been proposed or have received entitlements but
are not expected to be issued building permits until after
July 1, 2021 can be credited toward the 2021-2029 RHNA.
Table C-1 lists the projects that have received approval
or entitlement but are not yet permitted. In addition,
pipeline residential projects (proposed or upcoming) are
also included. All of the approved/proposed/pipeline
projects will provide affordable housing units to lower
income households, including those with special needs.
HOME and Housing Asset Funds are used as leverage
to improve the feasibility of these affordable housing
projects. Recent non-residential entitlement projects have
also been reviewed against the inventory, and properties
for which approvals entitling substantial improvements
that have been identified as having the potential to lessen
the likelihood of development have been removed from
the inventory.
Table C-1: Approved, Entitled, and Proposed Developments
Name Address Developer Units Very
Low Low Moderate Upper Target
Population
Approved
Anaheim/
Walnut
1500 E.
Anaheim
Bridge
Housing 88 53 34 1 0 Family
Proposed/Pipeline Projects
Union
Apartments
1401 LB
Blvd
Skid Row
Housing 160 88 71 1 0 Family/
Long Beach
Senior
Housing
901-941 E.
PCH
Mercy
Housing 68 58 9 1 0 Senior
26 Point 2
Apartments
3590 E.
PCH
Excelerate
Housing
Group
77 61 15 1 0 Homeless
The Cove 2121 W.
William St.
Century
Affordable
Development
90 72 17 1 0 Homeless Vet
Armory Arts
Collective
854 E. 7th
Street
Daylight/
Gundry/
Howard
65 14 49 2 0 Family
Subtotal:460 293 161 6 0
Total:548 346 195 7 0
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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%
AN
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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:
x Just under 20% of Bay Area ADUs are made available at no cost to the tenant.
x An additional 16% are rented to friends or family, presumably at a discounted rent,
though the survey did not ask.
x 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:
x Studios 1 person
x 1 Bedrooms 2 people
x 2 Bedrooms 3 people
x 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:
x Very Low Income: 0-7% of market rate units were affordable to very low income
x Low Income: 15-44% of market rate units were affordable to low income
x Moderate income: 40-70% of market rate units were affordable to moderate income
households.
x 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%
O
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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.
DRAFT DRAFT DRAFT DRAFT DRAFT DRAFT DRAFT DRAFT DRAFT
8 DRAFT Affordability of Accessory Dwelling Units
6. Additional Research and Considerations
In general, ADUs are affordable for several reasons:
x 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
x 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)
x 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.
x 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:
x 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
x 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
x 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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