Regional Housing Needs Assessment (RHNA)

RHNA Overview

Since 1969, cities and counties in California have been required to plan for future housing needs for all income levels by including a Housing Element in their General Plan. State housing officials have stated that in order to adequately address the housing needs and demand of Californians, local governments must adopt plans and regulations that provide opportunities for (and do not unduly constrain) the private market to develop housing. Every 8 years, housing needs are assessed within the different regions of California. After identifying regional housing needs, the total number of housing units projected to be needed for each income level is distributed among the jurisdictions in the region. This is called the Regional Housing Needs Allocation or “RHNA” (pronounced “reena”). Jurisdictions must then update their Housing Elements to identify policies and specific locations for residential development to provide the opportunity to reach the jurisdiction’s RHNA allocation.

The Bay Area region’s 2023-2032 RHNA process started in October 2019. The draft housing allocation for Saratoga and other jurisdictions is expected by spring 2021 with the final allocation being provided by winter 2021. Jurisdictions will then use their individual RHNA allocation to submit a draft updated Housing Element to HCD in 2022 and to adopt by January 2023.

As background, the following table shows Saratoga’s RHNA allocation for 2015-2023 for each income category together with the number of building permits that the City has issued in each category as of December 31, 2019.  The City has not denied any applications for new residential development in the planning period.

Income CategoryUnits AllocatedPermits Issued
Extremely Low & Very Low Income (0-50% Area Median Income)
147

Low Income (51-80% Area Median Income)
95
63
Moderate Income (81-120% Area Median Income)
104
16
Above Moderate Income (120%+ Area Median Income)
93
27
Total439106

* The number of permits shown above reflects building permits issued authorizing construction, not approval of planning applications.

Housing Needs Allocation for the Bay Area

Based on growth projections from the State Department of Finance, the California Department of Housing and Community Development (HCD), in partnership with a Council of Governments for each region, determines housing needs within each of the 18 regions in the State. Each Council of Government for the different regions is then responsible for divvying up the housing needs among all the jurisdictions within that region. The Council of Government that represents the counties of Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano, and Sonoma is the Association of Bay Area Governments (ABAG).

In June 2020, HCD provided the housing needs allocation for the Bay Area for the 2023-2032 period. The total number of new housing units needed is 441,176. This compares to 187,990 for the prior planning period of 2015-2023 representing a 234% increase in future housing to be planned for in the Bay Area

Allocation of Housing Needs to Bay Area Jurisdictions

The next step in the RHNA allocation process is for the Association of Bay Area Governments (ABAG) to determine individual allocations for each jurisdiction (cities and counties).

The ABAG Executive Board, based on recommendations from ABAG’s Housing Methodology Committee, will adopt a methodology for distributing the total housing needs to each of the jurisdictions in ABAG’s territory. The ABAG Executive Board is comprised of elected officials from throughout the Bay Area who are selected to serve on the Board by fellow elected officials in the different counties. In Santa Clara County, the city representative on the ABAG Executive Board is selected by the Cities Association of Santa Clara County. The Housing Methodology Committee includes 9 elected officials from each of the Bay Area counties, 12 housing or planning staff, 16 stakeholders representing a variety of perspectives, and 1 partner from the State. A Committee roster is available on the ABAG website.

ABAG is required to follow several objectives from the State when deciding each jurisdiction’s share of the total Bay Area housing needs allocation. These include:

  1. Increasing housing supply and mix of housing types, tenure, and affordability in all jurisdictions in a fair manner
  2. Promoting infill development and socioeconomic equity, as well as protection of environmental and agricultural resources, encouragement of efficient development, and supporting the State’s greenhouse gas emission reduction targets
  3. Promoting the relationship between jobs and housing, including improving the balance between the number of low-wage jobs and the number of affordable housing units in each jurisdiction
  4. Reducing the number of units needed in an income category when a jurisdiction has an already high share of households in that income category
  5. Furthering fair housing by reducing patterns of segregation, addressing disparities in housing needs and access to opportunity, transforming racially and ethnically concentrated areas of poverty into areas of opportunity, and fostering and maintaining compliance with civil rights and fair housing laws

Allocation Methodology

As of July 2020, the Housing Methodology Committee is considering two options for allocating housing needs to Bay Area Jurisdictions. These methodologies include the Income Shift Methodology and the Bottom-Up Methodology. ABAG has created a visualization tool to show how many housing units would be allocated to each Bay Area jurisdiction under the two models.

Income Shift Methodology

The Income Shift Methodology first allocates a jurisdiction’s total number of housing units and then allocates those units among the four RHNA income categories. A jurisdiction with a higher percentage of existing households in an income category compared to the region would receive a smaller share of units in that income category.  Similarly, a jurisdiction with a lower percentage of households in an income category compared to the region would receive a higher share of units in that income category.

Bottom-Up Methodology

The Bottom-Up Methodology first divides the entire Bay Area region’s allocation of housing units by income level. Units would then be allocated to individual jurisdictions based on several factors. Currently, the methodology calls for half of the affordable units for the region are allocated to high opportunity areas and the other half of affordable units are allocated based on jobs-housing fit. Half of market-rate units are allocated based on jobs-proximity auto and the other half are allocated based on jobs-housing balance.

Public Input on Methodology

The public may share their thoughts on the methodology during Housing Methodology Committee meetings. To reduce the spread of COVID-19, upcoming meetings are expected to occur virtually via Zoom. The public can also sign up for the RHNA mailing list to receive updates via email.

Housing Element

Once the RHNA allocation to all the Bay Area cities and counties are finalized by the ABAG Executive Board, each jurisdiction will begin updating its Housing Element. The Housing Element is one of several General Plan Elements that cities and counties in California are required to have. The General Plan is a long-term policy document that provides guidance for managing physical, social, and economic resources. The Housing Element describes how a jurisdiction will address housing needs.

The Housing Element includes 7 components:

  • Housing Needs Assessment that provides demographic and housing need information for the City.
  • Constraints Analysis of existing and potential constraints on housing development and how those will be addressed.
  • Evaluation of Past Performance that assesses the City’s progress in implementing the policies and programs in the previous Housing Element
  • Housing Sites Inventory and Analysis that identifies sites available for development or redevelopment and that are appropriately zoned to support housing development
  • Housing Resources that identifies financial and other resources available to support housing development
  • Policies and Programs that are designed to address housing needs in the City.
  • Community Outreach efforts conducted as part of the Housing Element update.

The City of Saratoga’s current Housing Element became effective in 2015 and must be updated by 2023. Development of the 2024-2032 Housing Element will begin in Fall 2021. Following public review and consideration by the Planning Commission and City Council the City must submit a draft of the Housing Element to HCD for its review.  The City must adopt the final Housing Element and submit it to HCD by January 2023.

The Housing Sites Inventory is a key part of the Housing Element.  The inventory must show the specific sites in the City that have zoning adequate to ensure that the number and types of units in the City’s allocation can be built. Recent changes in State law require more detail on these sites than was required for the past Housing Element. Specifically, new state laws require that the siting inventory include:

  • Adequacy of infrastructure to support the site;
  • Adequacy of the site size to accommodate housing for lower-income households as such projects typically require 50-150 units.
  • The RHNA income category the site is expected to serve (if the site is later developed for a different income category the City must then identify a new site or sites for a similar amount of the targeted development type);
  • A discussion of whether the site was included in previous inventories and, if so, why it has not yet been developed;
  • A description of how the sites affirmatively further fair housing (defined as taking meaningful actions that, collectively, address significant disparities in housing needs and in access to opportunity, replacing segregated living patterns with truly integrated and balanced living patterns, transforming racially and ethnically concentrated areas of poverty into areas of opportunity, and fostering and maintaining compliance with civil rights and fair housing laws.
  • For sites that are not vacant, an explanation of why it is reasonable to expect that the site will be redeveloped with housing before 2032. 

State Housing Legislation

In recent years, the State has adopted a number of housing laws that shift more responsibility for development of affordable housing from the market to local jurisdictions and reduce local control over future residential development. The most significant in Saratoga area:

  • Senate Bill 35 (Weiner): requires cities and counties where housing production has not matched the Housing Element targets to use a streamlined, ministerial review process (e.g., not allowing environmental review or any discretionary findings such those used for design review and similar approvals in Saratoga) for qualifying multifamily residential projects.
  • SB 330 (Skinner): prohibits agencies from holding more than five hearings/public meetings concerning residential projects and prohibits adoption zoning or General Plan policies that lessen the intensity of housing.
  • Senate Bill 166 (Skinner): prohibits cities from requiring that sites identified in the Housing Element for affordable housing be developed as affordable housing and requires cities to identify new locations for affordable housing if the affordable housing sites are developed for another use or market-rate housing.

Proposed Legislation

The Saratoga City Council has been monitoring proposed legislation that may have impacts on the City and has adopted the following positions on bills under consideration:

  • Senate Bill 795 (Beall) – Support: this bill would generate $2 billion annually for affordable housing, housing assistance programs, and climate resiliency without impacting funding for schools.
  • Senate Bill 902 (Wiener) – Oppose : this bill would allow zoning changes otherwise prohibited by local measures, like Measure G in Saratoga and allow rezoning to allow up to 10 units per parcel in urban areas where residential development is permitted or in other areas that meet standards in the law.
  • Senate Bill 1120 (Atkins) – Oppose : this bill would require cities to ministerially consider proposed housing developments containing 2 residential units in zones where allowable uses re limited to single-family residential development. Proposed housing could be constructed as a duplex or the lot could be divided into 2 equal lots.

Public Input on Proposed Legislation

The community can subscribe to receive automatic email updates on proposed bills on the California State Legislature website. The public can also share their thoughts on a proposed bill with their State representatives or submit a position letter to the Committee considering the bill using the State’s Position Letter Portal.