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1. What is a Housing Element?

State law[1] requires each city to adopt a comprehensive, long-term General Plan for its physical development. General Plans include several “elements” that address various topics. The Diamond Bar General Plan[2] was comprehensively updated in 2019 and includes the following elements:

• Land Use and Economic Development
• Community Character and Place Making
• Circulation
• Resource Conservation
• Public Facilities and Services
• Public Safety
• Community Health and Sustainability
• Housing[3]

While most portions of General Plans typically have a time horizon of 20-25 years, State law requires that the Housing Element be updated in 8-year “cycles.” The City is currently preparing a Housing Element update for the 2021 to 2029 planning period, which is referred to as the “6th Housing Element cycle” in reference to the six required updates that have occurred since the comprehensive revision to State Housing Element law in 1980.

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[1] California Government Code Sec. 65300 et seq.

[2] http://www.diamondbargp.com/

[3] The Housing Element was last updated in 2014 and was not part of the 2019 General Plan update

2. What is Housing Element “certification” and why is it important?

The State Legislature has delegated to the California Department of Housing and Community Development (“HCD”) the authority to review Housing Elements and issue findings regarding the elements’ compliance with the law.[1] When HCD issues a letter finding that the Housing Element is in substantial compliance with State law it is referred to as “certification” of the Housing Element.

Housing Element certification is important for two main reasons:

• Local control. The General Plan and its various elements provide the foundation for the City’s land use plans and development regulations, and the Housing Element is part of the General Plan. If the City were challenged in court on a planning or zoning matter and the General Plan were found by the court to be invalid, the court could order changes to City land use plans or regulations and assume control over City land use decisions. HCD certification establishes a “rebuttable presumption of validity”[2] that the Housing Element complies with State law, which would support the City’s legal defense. Recent laws also allow for courts to impose fines on a jurisdiction if it fails to adopt a Housing Element in compliance with State law.[3]
• Eligibility for grant funds. Some State grant funds are contingent upon Housing Element certification. Grants can help to cover the cost of some projects that would otherwise rely on the City’s General Fund.

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[1] California Government Code Sec. 65585

[2] California Government Code Sec. 65589.3.

[3] AB 101 of 2019

3. What are the most important issues that must be addressed in the Housing Element?

The major issues that must be addressed in the Housing Element are: 1) how City policies, plans and regulations help to meet the region’s housing needs for persons and families of all income levels; and 2) how City land use regulations accommodate the special housing needs of those with disabilities or other difficulties.

• Accommodating Regional Housing Needs. Under State law[1] all cities are required to plan for additional housing to accommodate population growth and address existing housing problems such as overcrowding and high housing cost. State law recognizes that cities generally do not build housing, since that is typically the role of private and non-profit developers and builders. However, cities are required to adopt policies, development regulations and standards to encourage a variety of housing types that are affordable for persons of all income levels, such as rental apartments and accessory dwelling units (“ADUs”). The Regional Housing Needs Assessment (“RHNA”) is the method by which each jurisdiction’s share of new housing needs is determined (see #5 below)
• Housing for Persons with Special Needs. Under State law[2] cities must also ensure that their plans and regulations encourage the provision of housing for persons with special needs including:

• Reasonable accommodation for persons with disabilities

• Transitional housing

• Supportive housing

• Emergency shelters and other facilities serving the homeless

• Large (5+) families

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[1] California Government Code Sec. 65583

[2] California Government Code Sec. 65583(a)(5)

4. What is “affordable” housing?

By definition, housing is considered “affordable” when total housing cost, including utilities, is no more than 30% of a family’s gross income. State law describes five income categories, which are based on county median income as shown in Table 1.

Table 1. Household Income Categories
Income Category	% of county median income
Extremely low	Up to 30%
Very low	31-50%
Low	51-80%
Moderate	81-120%
Above moderate	Over 120%
Source: California Government Code Sec. 65584(f)

Affordable housing costs for all jurisdictions in Los Angeles County are determined based on these income categories as shown in Table 2. These incomes, rents and housing prices are based on a 4-person family and are adjusted for different family sizes.

Table 2. Income Categories and Affordable Housing Costs – Los Angeles County
Income Category	Maximum Income	Maximum Affordable Rent	Maximum Affordable Price (est.)
Extremely low	$33,800	$845	*
Very low	$56,300	$1,407	*
Low	$90,100	$2,252	*
Moderate	$92,750	$2,319	$375,000
Above moderate	Over $123,600	Over $3,090	Over $375,000
Assumptions: -Based on a family of 4 and 2020 State income limits -30% of gross income for rent or principal, interest, taxes & insurance plus utility allowance -10% down payment, 3.75% interest, 1.25% taxes & insurance, $300 HOA dues * For-sale affordable housing is typically at the moderate-income level Source: Cal. HCD; JHD Planning LLC

5. What is the “RHNA” why is it important?

Each California city is required to plan for new housing to accommodate a share of regional needs. The Regional Housing Needs Assessment (“RHNA”) is the process established in State law[1] by which housing needs are determined.

Prior to each planning cycle the total new housing need for each region of California is determined by HCD based upon economic and demographic trends, existing housing problems such as overcrowding and overpayment, and additional housing needed to ensure reasonable vacancy rates and replace units lost due to demolition or natural disasters.

Diamond Bar is located within the Southern California Association of Governments (“SCAG”) region, which includes Los Angeles, Orange, Riverside, San Bernardino, Imperial and Ventura counties. The total housing need for the SCAG region is distributed to cities and counties by SCAG based upon objectives and criteria established in State law.[2]

In 2019 HCD determined that the total new housing need for the entire SCAG region in the 6th Housing Element cycle is 1,341,827 units. SCAG is currently finalizing the RHNA plan for the 6th cycle, which must fully allocate the total RHNA to jurisdictions in the SCAG region.[3] SCAG expects to adopt the final RHNA plan by February 2021.

The RHNA also distributes each jurisdiction’s total housing need into four income categories (the extremely-low and very-low categories are combined for RHNA purposes). Diamond Bar’s preliminary 6th cycle RHNA allocation by income category is shown in Table 3.

Table 3. Draft 6th RHNA by Income Category – Diamond Bar
Extremely Low + Very Low	Low	Moderate	Above Moderate	Total
841	432	435	805	2,514
Source: SCAG, 3/5/2020

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[10] California Government Code Sec. 65584 et seq.

[11] California Government Code Sec. 65584(d)

[12] http://www.scag.ca.gov/programs/pages/housing.aspx 

6. Is the RHNA a construction mandate?

The RHNA allocation identifies the amount of additional housing a jurisdiction would need in order to have enough housing at all price levels to fully accommodate its assigned share projected growth over the 8-year planning period. The RHNA is a planning requirement based upon housing need, not a construction quota or mandate. Jurisdictions are not required to build housing or issue permits to achieve their RHNA allocations, but some provisions of State law establish specific requirements when housing production falls short of RHNA allocations. One such requirement is streamlined review and approval of housing development applications that meet specific standards.[1] Other than requirements for streamlined permit processing, there are currently no legal or financial penalties imposed on cities for failing to achieve their RHNA allocations.

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[13] California Government Code Sec. 65913.4 (SB 35 of 2017)

7. What must cities do to comply with the RHNA?

The Housing Element must provide
an evaluation of the city’s capacity for additional housing based on land use
patterns, development regulations, other development constraints (such as
infrastructure availability and environmental conditions) and real estate
market trends. The analysis must be prepared at a parcel-specific level of
detail and identify properties (or “sites”) where additional housing could be
built consistent with City regulations. This evaluation is referred to as the
“sites analysis” and State law requires the analysis to demonstrate that the
city has adequate capacity to fully accommodate its RHNA allocation in each
income category. If the sites analysis does not demonstrate that adequate
capacity exists to fully accommodate the RHNA, the Housing Element must describe
what steps will be taken to increase capacity commensurate with the RHNA –
typically through amendments to land use and zoning regulations that could
facilitate additional housing development. Such amendments typically include
increasing the allowable residential density or allowing housing to be built in
areas that are currently restricted to only non-residential land uses.

Diamond Bar’s new General Plan,
adopted in December 2019, estimates that up to 3,750 new housing units could be
built in the city by 2040, depending on market conditions. It is expected that
much of this growth would occur within the Town Center Mixed Use, Neighborhood
Mixed Use, Transit Oriented Development and Community Core Overlay focus areas,
while most existing residential neighborhoods will experience less growth and
change. While the General Plan identifies potential for significantly more new
housing than the draft 6th RHNA allocation of 2,514 units, the
Housing Element must demonstrate that realistic capacity exists for the amount
of new housing in each income category to be built during the 2021-2029 planning
period based on zoning, site conditions and market trends. This analysis is
expected to be the primary focus of the Housing Element update.

8. Why are cities in high-cost areas expected to have affordable housing? Low-cost housing is not economically feasible here due to high land prices.

State housing laws are based on the premise that every city has an obligation to accommodate a range of housing types for persons at all income levels. Every community is dependent on a variety of low- and moderate-income workers in jobs such as landscaping, building maintenance, child and elder care, medical technicians, personal services, clerical support and retail trade. While the existing housing stock serves the needs of many residents, market rents and prices are higher than some families can afford. In addition, low-wage jobs have increased at a much faster rate than affordable housing is being built.

While cities are not required to build new housing, they must ensure that their land use regulations encourage a full range of housing types. Rental apartments typically provide the majority of affordable housing, but other types of housing such as accessory dwelling units[14] (ADUs) can also help to address this need. Various governmental programs provide funding assistance for affordable housing, but if a city’s development regulations are too restrictive, affordable housing may be infeasible and the housing needs of the local workforce will be shifted to other cities.

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[14] “Accessory dwelling unit” means an attached or a detached residential dwelling unit that provides complete independent living facilities for one or more persons and is located on a lot with a proposed or existing primary residence. It shall include permanent provisions for living, sleeping, eating, cooking, and sanitation on the same parcel as the single-family or multifamily dwelling is or will be situated. (Government Code Sec. 65852.2(j)(1)

9. There is very little vacant land suitable for housing development left in Diamond Bar. Why is the RHNA allocation so high?

SCAG’s 6th cycle RHNA allocation for the entire 6-county region is 1,341,827 units compared to 412,137 units in the 5th cycle. There are two main reasons why the 6th RHNA allocation is so much higher than the 5th cycle.

First, the 5th cycle RHNA allocation was established in 2012 while the severe economic effects of the “Great Recession” were discouraging growth. As a result, the 5th RHNA was uncharacteristically low. For comparison, SCAG’s 4th cycle (2006-2013) RHNA allocation was approximately 700,000 housing units.

Second, for the 6th cycle the State made a major modification to the process for determining RHNA allocations. In prior RHNA cycles, total housing need was based only on projected population growth. However, for the 6th RHNA cycle the State added existing need to the total RHNA calculation. Existing need includes households that are currently overcrowded (defined as more than one person per room) or are overpaying for housing (defined as more than 30% of gross income).

The total 6th cycle RHNA allocation for the SCAG region is comprised of the sum of existing need and projected need, as follows:

Existing need: 577,422 units \ Projected need: 764,405 units

Total need: 1,341,827 units

As seen from this breakdown, if existing need were excluded (as was the case in prior RHNA cycles) the total need would be similar to the 4th cycle RHNA.

With regard to jurisdictional RHNA allocations, the methodology adopted by SCAG for the 6th cycle places greater emphasis on the proximity of jobs and public transit rather than vacant developable land. As a result, the urbanized areas of Los Angeles and Orange counties are assigned much higher housing need as compared to prior cycles even though they generally have much less vacant land than inland areas.

Diamond Bar’s RHNA allocation in the 5th cycle was 1,146 units; therefore, the draft 6th cycle allocation of 2,514 units is about 2.2 times the prior cycle. By comparison, SCAG’s total 6th RHNA allocation is 3.3 times the 5th cycle total.