Santa Clara Flounders To Meet State ‘Affordable’ Housing Requirements, Larger Mandates On The Horizon

Santa Clara is behind the eight ball in regard to state mandates for producing below-market-rate housing.

During a study session Tuesday, the City Council got a clearer picture of its Regional Housing Needs Allocation (RHNA), which specifies what the Association of Bay Area Governments (ABAG) expects the City to produce during an eight-year cycle. These numbers detail how much housing the state requires each city to produce in four categories: very low, low, moderate and market rate.

The categories correspond to a percent of area median income, which in Santa Clara is $99,100 for a one-person household. Very low income is up to 60% that number with low being 60% to 80%, moderate between 80% and 120% and market-rate above 120%.

Andrew Crabtree, Director of Community Development, presented to the Council during the housing element study session, detailing how the City performed thus far in the current cycle, which ends in 2022, and gave projections for the upcoming cycle.

The numbers show that the City has floundered to produce even close to the amount of so-called “affordable” housing. So far during the current cycle, the City has only produced 168 of the required 1,050 units for those in the very low-income bracket. The numbers are equally bleak in the low and moderate brackets, with the City having produced 174 of 695 and 57 of 755 units respectively.

Santa Clara only met its total overall RHNA requirement because it far exceeded production of market-rate units, producing 4,423 when only 1,593 were required.

Although Crabtree said there are “no specific penalties” for not meeting ABAG’s requirements, he said continuing to do so could result in the City being put on a four-year cycle instead of an eight-year cycle. However, he also said nearly all cities across the Bay Area are having similar difficulties producing below-market-rate housing.

“There is an acknowledgement that it is very dependent on market conditions that are beyond our control,” Crabtree said. “We certainly want to try to support achieving these numbers, but a lot of it is outside of our control. We really are dependent on a developer or an affordable housing developer coming forward with a project to produce these numbers.”

Council Member Suds Jain said he worries that if the City is not meeting these housing goals, it could lose local control over development.

The numbers for how many units the City has produced do not include projects that are, what Crabtree called, “in the pipeline.” He pointed to the City’s effort in the back half of the current cycle to ramp up below-market-rate housing production as a bright spot.

For the upcoming RHNA cycle, which runs from 2023 to 2031, projections indicate that ABAG will likely expect Santa Clara to 11,632 units. Those projections indicate the City will likely need to produce in the ballpark of 2,872 very-low-income units, 1,653 low-income units, 1,981 moderate-income units and 5,126 market-rate units. The total number of units is nearly three times what the City needed to produce in the current cycle.

To achieve the numbers, Crabtree said something needs to change.

“To really achieve the full number of low or very low or moderate-income units, it would likely be necessary to produce well more than the total of 11,632 following our typical practices, the standard practices available to us,” he said.

Work on area plans that focus on guidelines is key, Crabtree said. Updating the zoning code, reassessing fees charged to commercial developers to offset an uptick in housing, also known as commercial linkage fees, and an increase in accessory dwelling units — additional residential housing located on the same parcel as an existing residence — will also likely play an important role, he added.

Having more concrete, objective design standards would also likely be beneficial, Crabtree said.

Council Member Anthony Becker said he would like to see an increase in the requirements in the affordable housing ordinance. The ordinance requires new developments to have 15% below-market-rate units, but Becker said he would like that percent to be biased toward very low and low-income units.

Jain agreed with Becker’s suggestion, adding that allowing developers to stack density bonuses may also be a viable option.

Dennis Martin, a lobbyist with the Building Industry Association, implored the Council to avoid altering the affordable housing ordinance, saying the ordinance was the byproduct of much collaboration and tinkering with it would likely “threaten development by layering on top additional affordable housing fees.”

Still, most on the Council felt trying to cram housing in areas where there is space simply doesn’t make sense. Several Council Members floated the idea of looking at adding housing density in areas that are currently zoned for industrial use.

Mayor Lisa Gillmor said the City needs to “get creative” and “listen to what the market is telling us.” Otherwise, she said, a “ripple effect” could mean bad news for the quality of life for Santa Clarans.

Council Member Kevin Park expressed a similar sentiment.

“You don’t put ice cream in the closet because that is where you have space,” he said. “Simply putting housing where there is space is not the thing to do.”

One public commenter was not convinced by Crabtree’s forecast or explanation, asking the Council “what is he smoking?”

“This chart shows exactly what the community has been screaming about. There is not a housing shortage. There is a shortage of affordable housing,” said Deborah Bress, a Council mainstay. “People need to be held accountable in meeting objectives, and have these be their job objectives.”

Another member of the public suggested a housing trust fund.

In an e-comment Susan Hinto wrote: “Long term homeowners want stability in exchange for 30-year mortgages while developers want as much cash as they can get and City Council wants expanding tax bases. These things do not go together.”