Pleasanton’s regional housing allocation may double in next cycle

The numbers aren’t finalized yet, but Pleasanton may need to plan for about 4,800 housing units over the next decade and a half — a 2.3-fold increase from its previous allocation — according to a staff update during the City Council’s online meeting last Tuesday.

The city’s housing obligations, including the “need to plan for approximately 4,848 units for the 2023-35 period,” were reviewed in detail before council members engaged in a lengthy discussion and public hearing about planning and development considerations that evening.

Pleasanton is currently underway in the sixth regional housing needs allocation (RHNA) cycle and Housing Element update process, which takes place every eight years at the behest of the state government. As part of RHNA, the state Department of Housing and Community Development (HCD) determines how many new homes the nine-county Bay Area region must build — and how affordable they must be — to meet local housing needs for all income levels.

Known also as the regional housing need determination (RHND), the HCD issued the number to the Association of Bay Area Governments (ABAG)/Metropolitan Transportation Commission in June.

The city’s final allocation will be determined by ABAG, in collaboration with the Housing Methodology Committee, a 35-member group of public officials and staff, labor groups, environmental organizations, housing advocates and other stakeholders from around the region. Pleasanton is participating on the committee as one of two staff representatives for Alameda County (the other from Oakland).

Once the RHNA obligation is announced, Pleasanton will update the Housing Element in its General Plan, as required by the state, and show where development can take place, and the strategies and policies needed to meet local housing demand.

Each jurisdiction’s local draft RHNA will be published in spring 2021 and finalized that summer. After receiving the final RHNA, each local jurisdiction will have until no later than January 2023 to update the Housing Element.

According to community development director Ellen Clark, the most recent RHND for the Bay Area shows a “relatively substantial” increase of 441,176 housing units for the entire region — a 2.35 times proportionate increase from the prior cycle. The previous RHNA cycle from 2015 to 2023 called for 2,067 housing units in Pleasanton.

The “big question” is how that translates to local allocation, according to Clark.

“There’s no exact correlation between the two but it does provide an indicator,” Clark said. “It does seem likely we are likely to receive allocation … of 4,800 to 5,200 units” with about 2,600 of those earmarked lower income.

So-called “jobs-rich” communities like Pleasanton have been initially targeted by the methodology committee for larger RHNA allocations. Councilman Jerry Pentin asked Clark about the designation and how the recent COVID-19 pandemic might affect planning.

“We may be seeing literally this shift in the employment world after COVID, that we don’t have five-day-a-week people driving into town and five-day-a-week people driving out of town to go to jobs,” Pentin said. “Wouldn’t talking about that kind of methodology change the way Pleasanton is viewed as a job-rich community?”

Clark replied the question has come up before and said “ABAG staff is taking into account, in some form or fashion, the potential effects of COVID,” but the regional number is “out the gate” and she did not foresee an adjustment.

“The Housing Element is always, unfortunately, a step behind whatever is happening in the world, and it’s reacting versus attempting to project, but it’s projecting based on recent trends,” Clark added. “We’ve seen that happen over and over and over again in cycles, and this may be one where we don’t catch up with COVID until the next cycle, post-2030.”

Under current law, Pleasanton is not required to build its RHNA-assigned housing units but must adopt a land-use program identifying “specific sites with available infrastructure and suitable physical conditions” to accommodate them. The city will need to “identify and ultimately rezone a number of parcels,” according to staff.

Vice Mayor Kathy Narum asked, “Around zoning of the sites that are identified for the Housing Element to meet the RHNA, do they have to be zoned as part of a submission of the Housing Element to HCD, or can they be zoned at a later date? And if so, what are the advantages or disadvantages of that?”

Clark told Narum, “The sites do not need to be zoned at the time the Housing Element is adopted” and explained there is a three year period during which they must be rezoned.

If the city waits to rezone, Clark said, “We give up no more discretionary review than the state has already sort of taken away in various laws that have passed.

“What really is driving the city’s discretion is what the General Plan says, and under state law, the city has a pretty strict obligation to honor those densities and amounts of development that’s anticipated in the Housing Element,” she added.

Councilwoman Julie Testa inquired about Senate Bill 35, which streamlines housing development in California counties and cities not building enough units to meet their mandate, and any implications.

“RHNA is a process of zoning … but it’s not an expectation of production or building,” Testa said. “I want to understand the consequences, the implications (of SB 35).”

Clark said the city is more susceptible to state intervention, the more poorly it does, and that “very few cities have actually escaped it” since the bill’s adoption in 2017.

“That said, SB 35 has been in place for a number of years, we have not received any applications, even though we are an SB 35 eligible city today, and across the state, it has not seen a huge uptake from the development team either,” Clark added.

Testa asked if cities lose oversight of a project once triggering SB 35 involvement: “You said that this is relevant when a city has failed to meet their production, but we started this with saying RHNA does not require production. Why is that, and how is that? Because RHNA is not supposed to require production.”

Clark called the law “not a mandate to produce, but it’s a stick. It’s a repercussion for not producing.”

“And like you said, really most cities have failed to meet those — and now with this increased RHNA number, it’s going to make it much more difficult,” Testa said. “I do know, have peers at a couple of cities that are dealing with their first SB 35 projects, so it is a concern, and it shouldn’t be taken lightly.”

Like in previous years, identifying higher-density sites for lower-income housing is the current challenge, and the city may also need to identify more sites to accommodate moderate and above-moderate units as well.

Testa said she was “confused that the RHNA cycle is now increasing the above-moderate numbers because it’s pretty well understood that across the state — and certainly Pleasanton is no exception — has overproduced above-moderate. We overproduced 230% of what our RHNA requirement was for above-moderate.”

Noting “a push by the state to do more,” Testa added she would “like to see, but we did 32% on our very-low (income) and 20% on our low (income), which is way better than so many other cities.”

“Can the council identify a priority to truly nonprofit developers, to try and increase that production (of low and very-low)?” she asked.

City Manager Nelson Fialho replied, “Could we create an environment that generates more nonprofit development in order to maximize affordability? The answer is yes, and we could prioritize that in our Housing Element.”

Fialho added the city has done so “on a few occasions” and “it’s generated quite a bit of affordability” — the most recent example being the affordable senior housing complex Kottinger Gardens.

Another staff suggestion to “dovetail the key decision points” of the East Pleasanton Specific Plan with the Housing Element update and sites inventory process prompted Pentin to ask if the Housing Element could be planned without the east side plan.

“In other words, what’s the danger in just saying ‘we see this kind of zoning out there … later on, within two to three years, to do the zoning. Is it a cart and horse type thing?” Pentin said.

Clark replied, “Demonstrating to HCD that we have the momentum and the commitment in the planning process, I think will go a long way to making the case for those sites to be included and counted, if that’s the decision that’s arrived at for East Pleasanton.”

Staff also recommended hiring an outside consultant for assistance, and plans to issue a request for proposals for both planning and California Environmental Quality Act purposes. A lead consultant will be selected to prepare the Housing Element update, and a professional services contract brought to the council for review and approval at a later date.