Sep 27 2022

OPINION: Erroneous Housing Needs Projections Should be Challenged

The City Council is urged to listen to the expertise of residents and take on the challenge – to investigate, question and push back against the ABAG / HCD 587-unit requirement and demand a fair process.

Dear Mayor King and City Council Members,

At the August 1st City Council meeting, in my rush to cover several topics, I was remiss in not thanking all Council Members and Staff for all their efforts to date on the General Plan. I apologize for that omission. In my career, I have served on a few Boards and fully appreciate the time and effort required by that service. Thank you.

Given the limited presentation time available to speakers at the meeting, however, I do feel that it is important to restate my position regarding the Draft Housing Element.

When Piedmont’s Housing Element requirement was initially announced, the Piedmont Planning Staff informed the residents that, even though the requirement of 587 units was nearly 10 times the previous requirement, ‘Piedmont should take on accommodating 587 units AS A CHALLENGE’. There was no mention of Piedmont challenging the 587-unit number despite the extraordinary increase over the previous General Plan requirement (60 units). If that discussion did occur between the Staff and the Council, then those minutes should be made available to clarify the record.

It appears to me that we are at a juncture where the solutions proposed in the Housing Element and the acceptance of some of those solutions by a significant number of residents are at odds. That is why I propose challenging the premise that 587 new units can be accommodated in Piedmont.

Why challenge the State HCD (Housing and Community Development Dept.) requirement?

One reason is that the State Auditor was directed to evaluate the needs assessment process that the HCD uses to provide key housing guidance to local governments. The Auditor’s report, dated March 17,2022, concluded that the HCD does not ensure that it’s needs assessments are accurate and adequately supported.

The Auditor found errors such as; not considering all the factors that State Law requires; no formal review process for the data it uses; the HCD could not support its use of various vacancy rates.

What was the HCD’s response to these very serious findings about their processes and due diligence?

The HCD said they would review their processes over the next year, but they did not commit to reviewing or modifying any of the current cycle of projections. The HCD 6th Cycle projected a need of 2,300,00 housing units for California. However, prior to that, in August 2020, the HCD projected a need of only 1,170,000 units for the same time period – about half the current requirement.

On the Federal side, Freddie Mac’s projected need for 6th cycle housing was 1,320,00 units in February 2020. These wide variations in projected housing need coupled with the State Auditor’s findings about the HCD’s procedures converge to magnify the need to examine the HCD 6th cycle requirement with a very healthy skepticism and to institute a very serious investigation or as some other like-minded cities have done – that is to band together and legally challenge the HCD on their process and projections.

We must remember that the General Plan is on an 8-year cycle and Piedmont will need to submit a Plan again in 2031. The State will likely impose another housing requirement on Piedmont then.

How many units will be required and where will those units go in 2031? What legacy will be left for the City Council of 2031?

All that adds to the urgency in challenging the 587-unit requirement now. To work toward an acceptable compromise of this issue with the HCD, it would also be very important for the City to establish an acceptable and attainable number of units that the planners believe can reasonably be accommodated in the current 6th cycle.

In any negotiation, if Piedmont can emphasize it’s prior compliance with the HCD requirements and exhibit a good faith effort to accommodate a significant new housing increase over prior General Plans ( say a 2-fold or 3-fold increase ) it would go a long way toward establishing the seriousness of Piedmont’s position and commitment.

Nevertheless, based on the uncertainty of the HCD population projection process, it is very important that we and other cities push back and demand more transparency and accuracy from the HCD now.

Another reason – numbers matter. Many of the objections to the Housing Element come down the extraordinary means needed to try to accommodate 587 units while trying to maintain a sense of identity for Piedmont. If, for example, Piedmont’s Housing Element were only a 3-fold increase over the existing requirement and Piedmont need only accommodate 180 new units, I believe that the Housing Element would now be approved and in our rear-view mirror. This is just an example, but it makes the point that numbers do matter – and accuracy and fairness of process also matter.

Another reason – our Fair Share. In the Aug. 1 Council meeting, many residents stated their beliefs that Piedmont should provide its fair share of housing units. I wholeheartedly agree, but how is the fair share derived? I believe that it is vital that our fair share should be derived from a fair and open process given the magnitude of its impact on our City.

There should also be some recognition of Piedmont’s constraints – that it is predominantly built-out and that the City faces reconstruction or new construction of its Essential Services Buildings ( ESB’s ) which could significantly affect some of the few available parcels in the City.

Recent meetings and discussions all expose the fact that the Housing Element, the structural integrity of the ESB’s (which, in my opinion, should be Piedmont’s HIGHEST PRIORITY) and a Master Plan for the Downtown parcels are all intertwined, yet none of these issues has a solid implementable plan. That fact strengthens the position that Piedmont should not proceed with submission of a Housing Element containing 587 units. That is why I strongly urge the City Council to listen to the residents and take on the challenge – to investigate, question and push back against the HCD 587-unit requirement and demand a fair process.

Respectfully submitted,

Donald Chandler AIA Piedmont Resident

Editors’ Note: Opinions expressed are those of the author.

5 Responses to “OPINION: Erroneous Housing Needs Projections Should be Challenged”

  1. I applaud Mr. Chandler for his well written analysis. I do question the likelihood that his appeal solution will change anything. The ABAG and HCD staffs are the authors of these numbers, and thus, they are the defenders of these numbers. The track record of appeals to these agencies is pretty much a zero. Alternatively, as mentioned, several cities have tried another approach, a lawsuit challenging the legitimacy of their RHNA allocations. We will see how that plays out.

    Mr. Chandler correctly points out that the raised RHNA allocations are not based on demographics. The state is losing not gaining population. Rather, the theory is that we must build so much housing to the point where overcrowding is eliminated, and people are no longer rent-stressed, meaning paying more than 30% of their income on housing. While an altruistic goal, it is also speculative when translated into a RHNA for each jurisdiction. It is especially unlikely that if so much housing is produced.that it drives down the overcrowding and rent-stressed individuals to meet the criteria, wouldn’t the profit margins motivating builders to build evaporate?

    I’m resigned to believing that we will just continue to slog along with a fairly imperfect HE draft to ultimately submit to HCD. Then, the HCD response letter will tell us what we need to do to achieve certification. A waste of a million dollars in the process, but that’s how it works.

    There is another solution on the horizon but it won’t help the current situation. Some political pushback is developing. A statewide group, Our Neighborhood Voices is pushing for a ballot initiative in 2024 which is favoring a return to California being a home-rule state, ending the current Sacramento overreach on housing. That could be an interesting battle if they make it to the ballot.

  2. I agree with Michael Henn – The time for appeals is over. Appealing to the state or suing the state at this point has zero chance of success. The most prudent option for Piedmont is to follow the law and submit a draft to HCD for feedback. If we delay, or don’t submit a compliant Housing Element, we will bring more scrutiny, and the potential for the state to take away local control and levy fines.

    I also think it’s really important not to get hung up on the 587 number. As the City’s recently released Fact Sheet makes clear, the 587 is a goal to ZONE for, there is no state requirement to build all 587 units. See:

    States don’t require cities to build their entire allocations, because that is not what the number represents. The number is a target to PLAN for, not to build. By setting such high targets, the state hopes to incentivize cities to change their zoning policies enough to spur increased private development. When Piedmont’s allocation was 60 units, it did not have to change its zoning at all to meet that target, apart from allowing ADUs. Now that its target is higher, it will most likely be compelled to upzone its multifamily and mixed-use zones to higher densities to meet the state targets, among other measures. This doesn’t guarantee, however, that the private owners in the multifamily and mixed-use will actually build the units, and there is no realistic way for the state or city to force them to do so. For better or worse, this is how the Housing Element process is designed to work–by targeting the impediments that prevent adequate housing production (such as zoning) rather than directly proposing housing construction.

  3. Are state-mandated Housing Elements really that hypothetical? I’ve skimmed a few housing elements from other cities ( and they all go to great detail to identify specific sites for new housing. Based on staff’s warnings of the consequences of not meeting the deadline for the HE document, will HCD really be that lenient if those sites are not developed? The 5th cycle is coming to a close – perhaps there is evidence of HCD leniency for missed targets.

    And if it’s all about zoning and not the numbers, why isn’t there a recommendation about zoning in the draft HE? There are proposed changes to density in the multi-family and multi-use zones (“upzoning”) but no direct reference to rezoning the single-family and public zones. In truth the draft HE does indirectly raise the issue of rezoning the single-family zone in that I recall it calls for a study of the impediment that the City Charter presents to housing (ie, voter approval) and I think a study of the impact of single-family zoning on housing development as well.

  4. Garrett, my understanding about the nature of the Housing Element’s high targets comes from UC Davis law professor Chris Elmendorf’s analysis. See this 2022 paper, for example:

    A few relevant sentences from the Executive Summary:

    “4. Setting housing targets requires a lot of guesswork. In doing this guesswork, the state shouldn’t worry much about overshooting the optimal target, but it should be very
    concerned about setting the target too low. The societal costs of a too-high target are minimal because cities aren’t punished if they fail to meet their targets; because nothing
    will change on the ground if cities zone for housing that’s not economically feasible to build; because the Housing Element Law includes protections for cities that lack
    “available resources” to meet their targets; and because other state housing laws such as the Housing Accountability Act and SB 35 protect cities’ authority to apply health,
    safety, and other objective standards to housing projects. On the other hand, the costs of a too-low target are substantial, because California has severe housing shortages in high-demand places, and because cities left to their own devices give short shrift to the important regional and statewide interests in expanding the supply of dense housing in high-demand market.”


    “Kapur et al. (2021) examined development outcomes on 5th cycle inventory sites in 99 cities in the Bay Area. They found that the median city is on track to develop only about 8% of its housing element sites. For nonvacant sites, the redevelopment rate is even lower – approximately 3% in the median city and 8% regionwide). Kapur et al. also discovered
    that most housing development in the Bay Area – both affordable and market rate – occurred on sites that cities hadn’t included in their housing element.”

  5. Thanks for that background, Irene . In a nutshell, they seem to say aim high and do better than you did during the 5th cycle (8%). I don’t see how they speak to the question of HCD leniency. Is there any specific HCD guidance on that? I suspect there wouldn’t be – HCD needs to solve the housing crisis so it wouldn’t be in the agency’s interest to convey leniency.

    Question for you. In the few Housing Elements I’ve skimmed of comparable cities (population 5-10 thousand), I see RHNA allocations that are lower than Piedmont’s, but I haven’t confirmed this with a per capita calculation. Are the allocations purely per capita based? If not, is Piedmont’s allocation higher than comparable cities?

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