Final RHNA Methodology for 2015–2023

Final RHNA Methodology for 2015–2023

On July 19, 2012, the ABAG Executive Board adopted the final Regional Housing Need Allocation (RHNA) methodology for the period between 2014 and 2022. The RHNA methodology consists of two major steps: determining a jurisdiction's total RHNA and identifying the share of the jurisdiction's total RHNA in each income category. The following describes the components of the adopted RHNA Methodology. A detailed explanation of how each jurisdiction's allocation was derived is available in the Step-by-Step Description of the RHNA Methodology and Spreadsheet.

1. Determining a Jurisdiction's Total RHNA
  • Sustainability Component
    The Sustainability Component advances the goals of SB 375 and expands upon the inclusion of compact growth principles that began with the 2007–2014 RHNA methodology. Following the land use distribution specified in the SCS which allocates new housing into PDAs and non-PDA areas, 70 percent of the region's housing need (as determined by HCD) is allocated based on growth in PDAs and the remaining 30 percent is allocated based on growth in non-PDA locations.

    Using the PDA framework from the SCS in the RHNA methodology promotes growth in sustainable locations and is a key to ensuring consistency between the two planning documents. Directing growth to infill locations is a key component of protecting agricultural and natural resources. This methodology also recognizes the multiple benefits for local communities and the region as a whole of encouraging housing, particularly affordable housing, in the neighborhoods near transit that local communities have identified as priorities for development and investment to create complete communities.

  • Fair Share Component
    It is important that jurisdictions with PDAs are not asked to shoulder too much of the responsibility for meeting the region's housing need. PDAs are not the only areas in which housing choices are needed, and the RHNA methodology must ensure that all jurisdictions share responsibility for meeting the regional need for housing. Focusing only on PDAs could mean that jurisdictions that were unable or unwilling to designate any PDAs would not be allocated their "fair share" of the regional housing obligation.

    As noted above, the housing distribution in the SCS directs housing growth to non-PDA locations in the region based on factors that aim to expand housing and transportation options; increase access to jobs, particularly for low-income workers; and promote housing growth in places with high-quality services, such as parks, and schools. The RHNA methodology builds upon this distribution with the inclusion of an explicit "fair share" component that achieves the requirement that all cities and counties in California work to provide a fair share proportion of the region's total housing need for households at all income levels. The Fair Share Component allocates housing need to provide increased access to communities with good transit access and employment opportunities.

    • Upper Housing Threshold: If the SCS projects growth in a jurisdiction's PDAs that meets or exceeds 110 percent of the jurisdiction's expected household formation growth (described in more detail in Appendix B), that jurisdiction is not assigned additional units. This ensures that cities with large PDAs are not overburdened. Also, the total allocation to a jurisdiction cannot exceed 150 percent of its 2007-2014 RHNA.
    • Minimum Housing Floor: Jurisdictions are assigned a minimum of 40 percent of their household formation growth. Setting this minimum threshold ensures that each jurisdiction is planning for housing to accommodate at least a portion of the housing need generated by the population within that jurisdiction.
    • Fair Share Factors: The following three factors were applied to a jurisdiction's non-PDA growth:
      • Past RHNA Performance: Cities that permitted a high number of housing units for very low- and low-income households during the 1999-2006 RHNA cycle receive a lower allocation.
      • 2010 Employment: Jurisdictions with a higher number of existing jobs in non-PDA areas (based on 2010 data) received a higher allocation.
      • Transit: Jurisdictions with higher transit frequency and coverage receive a higher allocation.
  • Sphere of Influence Adjustments
    Spheres of Influence (SOI) must be considered in the RHNA methodology if there is projected growth within a city's SOI. Most SOI in the Bay Area are anticipated to experience growth. Every city in the Bay Area has a SOI which can be either contiguous with or go beyond the city's boundary. The SOI is considered the probable future boundary of a city and that city is responsible for planning within its SOI. The SOI boundary is designated by the county's Local Area Formation Commission (LAFCO). The LAFCO influences how government responsibilities are divided among jurisdictions and service districts in these areas.

    The method for allocating housing need for jurisdictions where there is projected growth within the SOI varies by county. In Napa, San Mateo, Santa Clara, Solano, and Sonoma counties, the allocation of housing need generated by the unincorporated SOI is assigned to the cities. In Alameda and Contra Costa counties, the allocation of housing need generated by the unincorporated SOI is assigned to the county. In Marin County, 62.5 percent of the allocation of housing need generated by the unincorporated SOI is assigned to the city and 37.5 percent is assigned to the county. These rules are based on the premise that each local jurisdiction with land use permitting authority over its SOI should plan for the housing need generated within that area. These rules reflect the fact that each county in the Bay Area is different in terms of whether a city or county has jurisdiction over land use and development within unincorporated SOIs.

2. Allocating Units by Income Category

Two primary objectives of the state's regional housing need process are to increase the supply of housing and to ensure that local governments consider the housing needs of households at all income levels. In addition to identifying each jurisdiction's share of the region's total housing need, the RHNA methodology must also divide this allocation into the four income categories defined by HCD. The income allocation portion of the RHNA method is designed to ensure that each jurisdiction in the Bay Area plans for housing for households of every income. The final RHNA methodology uses the same method for distributing units by income as the 2007-2014 RHNA.

The income allocation method gives jurisdictions that have a relatively higher proportion of households in a certain income category a smaller allocation of housing units in that same category. For example, jurisdictions that already supply a large amount of affordable housing receive lower affordable housing allocations. This promotes the state objective for reducing concentrations of poverty and increasing the mix of housing types among cities and counties equitably.

The income distribution of a jurisdiction's housing need allocation is determined by the difference between the regional proportion of households in an income category and the jurisdiction's proportion for that same category, based on data from the US Census 2005-2009 American Community Survey. Once determined, this difference is then multiplied by 175 percent. The result becomes that jurisdiction's "adjustment factor." The jurisdiction's adjustment factor is added to the jurisdiction's initial proportion of households in each income category. The result is the total share of the jurisdiction's housing unit allocation for each income category.

For example, if a jurisdiction has 36 percent of its households in the very low income category, this would be compared to the regional percentage in this income category, which is 23 percent. The difference between 23 and 36 is -13. This is multiplied by 175 percent (the adjustment factor) for a result of -23. This number is then added to the jurisdiction's original distribution of 36 percent, for a total share of about 13 percent. Therefore, 13 percent of their allocation must be affordable to households with very low income.