May 25 2022

State Auditor Finds Housing and Community Development Errors


How many housing units are actually needed?

The Auditor’s letter suggests a number of fundamental Housing and Community Development (HCD) failures:

– adequate consideration of all factors required by state law

– accurate use of healthy housing vacancy rates

– projection of the number of future households that will require housing units lacks supportive data

– lack of a proper study to support HCD housing numbers required of local communities

Excerpt quoted from Acting California State Auditor’s letter:

“…  In reviewing the needs assessments for three regions, we identified multiple areas in which HCD must improve its process. For example, HCD does not satisfactorily review its needs assessments to ensure that staff accurately enter data when they calculate how much housing local governments must plan to build. As a result, HCD made errors that reduced its projected need for housing in two of the regions we reviewed. We also found that HCD could not demonstrate that it adequately considered all of the factors that state law requires, and it could not support its use of healthy housing vacancy rates. This insufficient oversight and lack of support for its considerations risks eroding public confidence that HCD is informing local governments of the appropriate amount of housing they will need.

“HCD’s needs assessments also rely on some projections that the Department of Finance (Finance) provides. While we found that most of Finance’s projections were reasonably accurate, it has not adequately supported the rates it uses to project the number of future households that will require housing units in the State. Although these household projections are a key component in HCD’s needs assessments, Finance has not conducted a proper study or obtained formal recommendations from experts it consulted to support its assumptions in this area. Finance intends to reevaluate its assumptions related to household growth as more detailed 2020 Census data becomes available later in the year, but without such efforts, Finance cannot ensure that it is providing the most appropriate information to HCD.”

Respectfully submitted,

Acting California State Auditor

Read the complete letter here.

3 Responses to “State Auditor Finds Housing and Community Development Errors”

  1. Thanks for locating and publishing this. I’ve wondered why the California Housing and Community Development projections were so much higher than US Census and other demographic sources. The usual response is we have to offset for existing overcrowding and housing stressed households. So our forecasts are higher than just demographic growth (or declines). Since California has actually been losing population since January 2020, it is increasingly clear that the published RHNAs, besides being arbitrary, are too high. Nevertheless, the assigned 587 units is what Piedmont is stuck with in doing its Housing Element. The RHNA numbers were floated out in draft form in 2019 and do not reflect what actually happened to California’s population since then, and resulting housing needs.

  2. Thanks for sharing this. How do these findings relate to Piedmont and the process in which we’re currently engaged? Thank you.

  3. Hard to tell from the excerpt how the auditors finding affect Piedmont’s projections. The DOF update from later this year sounds important – the best 2020 census data should be used to plan for the next 10 years. Cannot HCD hit the pause button until that occurs?

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