Regional Housing Needs Assessments Under Audit

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FHBP Monitoring Housing Developments and Requirements

We are following the housing developments in Orange County to be sure as mandates are handed down to cities regarding housing requirements that they are fair, accurately representing need, and as always following other laws in place.
FHBP follows closely any development of the land for any purpose with the concern for:
  1. Protection of open spaces, plant and wildlife habitat, and recreational areas;
  2. Encouraging new development to be built near existing infrastructure and transit (not in hazardous fire areas at the wild land interface);
  3. Continuing to respect the existing specific plans; and
  4. Protection scenic corridors.

Department of Housing and Community Development & Its
Regional Housing Assessments Inaccurate & Under Review.

On March 17, 2022 the CA State Auditor released a report on the Regional Housing Needs Assessments (RHNA) process. The report found that the housing goals were not supported by evidence. Michael S. Tilden, the Acting California State Auditor, issued a blistering critique of the Department of Housing and Community Development (HCD) and its RHNA. The Auditor found problems in the HCD methodology that may have inflated RHNA requirements by hundreds of thousands of housing units. The Auditor concluded that, “The Department of Housing and Community Development must improve its processes to ensure that communities can adequately plan for housing.” In his letter to the Governor and legislative leaders, the Auditor also stated, “Overall, our audit determined that HCD does not ensure that its needs assessments are accurate and adequately supported. …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.” State Senator Steve Glazer (D-Orinda), was a member of JLAC in 2022.

Audit Requested

On May 14, 2024, the Joint Legislative Audit Committee (JLAC) reviewed 12 requests, including one from Sen. Steve Glazer to audit HCD’s Housing Element Reviews Procedures and Oversight. The Joint Audit Committee is comprised of 7 Assembly and 7 Senate members. A majority of the Assembly and Senate members (4 each) have to vote support the audit for it to be approved; at least 8 of 14 votes in favor. An audit is reliable tool to improve transparency and the quality of government services. 
The goal was to get four Assembly and four Senate members of the Audit Committee to approve Glazer’s request to audit HCD’s Housing Element Reviews Procedures and Oversight.

Senator Steve Glazer submitted a request to audit of CA Dept of Housing and Community Development (HCD) and the Housing Element review process. 
 Cities in Orange County and across the state have spent thousands of hours and tens of thousands of dollars preparing the 6th Cycle Housing Element. It has never been this complicated, time consuming or expensive. 
Sen. Glazer wrote in his request, “Serious concerns have been raised about the timeliness, consistency, and fair application of HCD’s standards and procedures.” 
As such he requested an audit of HCD.

Tuesday, the Joint Legislative Audit Committee approved a request by Senator Glazer to audit HCD related to Housing Element Reviews, Procedures and Oversight.  This is a very important next step if we are going to make a dent in the affordable housing crisis.


OC legislators (Orange):  Avelino Valencia and Dave Min

Audit scope:

It was recommended the State Auditor select no fewer than 10 cities that are diverse in population and geography, and select an equal proportion of cities whose housing elements are in compliance with HCD’s standards, and cities whose housing elements are not in compliance. Adhering to those selection criteria will ensure the audit has a wide breath of data, and the results will better capture the experiences of all cities.

The audit’s scope will include, but is not limited to, the following:
    1. Review and evaluate the laws, rules, and regulations pertinent to the audit’s objectives
    2. Scrutinize clarity of HCD’s standards and regulations for housing elements . Are HCD’s standards and regulations detailed enough for local governments to apply to their housing elements? Is HCD available for assistance when local governments are completing their initial draft and, if so, what is the median amount of time local governments must wait for assistance?
    3. Assess how responsive HCD has been to local governments. What is the median amount of time and full range of time it takes for HCD to return a set of comments to a jurisdiction? What is the median amount of time and full range of time it takes for HCD to approve a housing element? How do these lengths of time compare to the fifth cycle review period? What is the median amount of occasions a jurisdiction can meet with reviewer to ask questions?
    4. Measure how many different reviewers evaluate a jurisdiction’s housing element. Identify median number and full range of reviewers
    5. Determine the consistency of HCD’s comments and reviews. How consistent is the feedback between all reviewers assigned to one jurisdiction? How consistent is the feedback on similar topics across multiple jurisdictions?
    6. Evaluate the clarity of HCD’s feedback. Are the reviewer’s comments precise and measurable? Do the comments follow any specific criteria?
    7. Focus on the Affirmatively Furthering Fair Housing standards and site analysis. In terms of clarity, do the comments related to these standards differ? Are the comments for these new standards precise, measurable, and following specific criteria?
    8. Assess how HCD communicated housing element submission deadlines to local governments. Is there a documented and clear line of communication from HCD on when a local government must submit its housing element for review? How far in advance of the deadline did HCD communicate this, and is it different than past cycles?
    9. Evaluate HCD staffing levels and the turnover rate. Compared to the fifth cycle review period, how many housing element reviewers does HCD have? What is the median amount of time that reviewers work at HCD and how does that compared to the fifth cycle? What is the median amount of time one reviewer stays assigned to the same local government to review their housing element, and how does that compare to the fifth cycle?
    10. Analyze how HCD trains its new and existing staff assigned to review housing elements. How long is a new employee’s initial training and what procedures does training consist of? Does HCD offer additional training to existing staff and, if so, how often? What does the additional training consist of? Does HCD’s training set reviewers up to adequately review housing elements and provide clear comments to local governments?
    11. Review and assess any other issues pertinent to the audit.

State Audit Is Next

Now that the Senator’s request has been approved, it will move to the State Auditor’s Office to conduct the audit and report back to the Legislature.  The timing for the audit will be based on the State Auditor’s currently workload, as well as the depth and breadth of the audit request.  Currently, the State Auditor is still working on audit requests that were made by the Joint Legislative Audit Committee last year, so it will likely be early 2025 before the audit is complete.  In the coming weeks, the State Auditor will update their website and provide an estimated completion date.