What is a Housing Element?

Since 1969, Housing Elements have been mandatory portions of local general plans in California because providing housing for all Californians is considered by the state legislature to be of vital statewide importance. A Housing Element provides an analysis of a community’s housing needs for all income levels, and strategies to respond to provide for those housing needs. It is a key part of the City’s overall General Plan.

State Law establishes that each city accommodates its fair share of affordable housing as an approach to distributing housing needs throughout the state. State Housing Element law also recognizes that in order for the private sector to address housing needs and demand, local governments must adopt land-use plans and implement regulations that provide opportunities for, and do not unduly constrain, housing development by the private sector.

Rules regarding Housing Elements are found in the California Government Code Sections 65580-65589. Unlike the other mandatory general plan elements, the housing element is required to be updated every five years. It is also subject to detailed statutory requirements and mandatory review and approval by a State agency — HCD (Department of Housing and Community Development).

According to State law, the Housing Element must:

• Provide goals, policies, quantified objectives and scheduled programs to preserve, improve and develop housing
• Identify and analyze existing and projected housing needs for all economic segments of the community
• Identify adequate sites that are zoned and available within the 7-year housing cycle to meet the city’s fair share of regional housing needs at all income levels
• Be certified (approved) by the State Department of Housing and Community Development (HCD) as complying with state law
• Be internally consistent with other parts of the General Plan (and meeting this requirement is critical to having a legally adequate General Plan)

If the California Department of Housing and Community Development determines that a Housing Element fails to substantially comply with the State’s Housing Element Law, there are potentially serious consequences that extend beyond the realm of residential land use planning. When a jurisdiction’s Housing Element is found to be out of compliance, its General Plan is at risk of being deemed inadequate, and therefore invalid. If a jurisdiction is sued over an inadequate General Plan, the court may impose requirements for land use decisions until the jurisdiction brings its General Plan—including its Housing Element—into compliance with State law.

A Housing Element is considered out of compliance with State law if one of the following applies:

1. It has not been revised and updated by the statutory deadline, or
2. Its contents do not substantially comply with the statutory requirements. If a Housing Element is certified, there is a presumption that it is adequate, and a plaintiff must present an argument showing that it is in fact inadequate.

Over the years, California has steadily increased the penalties for not having a legally compliant Housing Element, and this trend is expected to continue.

Repercussions include:

1. Limited access to State Funding. Both the California Infrastructure and Economic Development Bank (CIEDB) and the Bay Area’s Metropolitan Transportation Commission (MTC) award funds based on competitions that take into consideration the approval status
   of a community’s Housing Element. See the list below for specific programs.
2. Lawsuits. Developers and advocates may sue jurisdictions if their Housing Element is not compliant with State Law. Recent Bay Area cities that were successfully sued include Corte Madera, Pittsburg, Pleasanton, Alameda, Benicia, Fremont, Rohnert Park, Berkeley, Napa County, and Santa Rosa. There are several potential consequences of being sued, including:
   1. Mandatory compliance – The court may order the community to bring the Element into compliance within 120 days.
   2. Suspension of local control on building matters – The court may suspend the locality’s authority to issue building permits or grant zoning changes, variances or subdivision map approvals.
   3. Court approval of housing developments – The court may step in and approve housing projects, including large projects that may not be wanted by the local community.
   4. Fees – If a jurisdiction faces a court action stemming from its lack of compliance and either loses or settles the case, it often must pay substantial attorney fees to the plaintiff’s attorneys in addition to the fees paid to its own attorneys. These fees can easily exceed $100,000.

In broad terms, affordability is simply the relationship between housing costs and income. The generally accepted measure for housing affordability is spending less than 33% of one’s gross household income on housing costs (including utilities, principle, and interest). Oftentimes, the term workforce housing is also used to describe affordable housing.

In the context of Housing Elements, affordable housing generally focuses on housing for extremely low, very low, low and moderate-income households, but may also address housing for above moderate-income households and are defined as follows:

• Extremely low income:  0-30% of Area Mean Income (AMI)
• Very low income:  31% to 50% of AMI
• Low income:  51% to 80% of AMI
• Moderate income:  81% to 120% of AMI
• Middle income : 121% to 140% AMI