HOUSING ELEMENT ANNUAL PROGRESS REPORT FOR CALENDAR YEAR 2017 HUMAN SERVICES & RENT STABILIZATION DEPARTMENT (Peter Noonan, Acting Director)

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1 PLANNING COMMISSION MARCH 15, 2018 CONSENT CALENDAR SUBJECT: INITIATED BY: HOUSING ELEMENT ANNUAL PROGRESS REPORT FOR CALENDAR YEAR 2017 HUMAN SERVICES & RENT STABILIZATION DEPARTMENT (Peter Noonan, Acting Director) STATEMENT ON THE SUBJECT: The Planning Commission will receive the draft 2017 Annual Progress Report on fulfilling the programs included in the Housing Element of the General Plan. RECOMMENDATION: Receive and file. BACKGROUND / ANALYSIS: The draft progress report on fulfilling programs in the Housing Element is attached for informational purposes. No action is needed. The Progress Report is scheduled for review by the City Council on April 2, 2018 with a request to submit the report to the state in compliance with the California Department of Housing and Community Development (HCD) requirement. The Housing Element is one of the required elements of the General Plan, and establishes the City s goals and programs for housing. Jurisdictions in Southern California update their housing elements every eight years according to a state established planning cycle. The current planning cycle is for 2014 through The City Council adopted the current Housing Element update on December 2, 2013, and the California Department of Housing and Community Development (HCD) certified the document on January 14, Meeting West Hollywood s Housing Need The State requires every jurisdiction to plan for housing needs of its community. In 2015, the California Department of Finance estimated there were 23,012 households in West Hollywood. The estimated income distribution of households is provided in the chart on the following page. The number of households earning above-moderate (also referred to as market-rate) income is on the right. There are an estimated 9,826 households or 42.7% of the community earning above-moderate income. These households have an earning potential adequate for market-rate housing. The other three estimates, for very low, low, and moderate households, represent the percentage and estimated number of West Hollywood households in each affordable income category. Importantly, the largest distribution of affordable income households is in the Low category. In West Hollywood, Low income is earning less than $30,328 for a 1-person household, and $48,525 for a 2-person household. Page 1 of 7 ITEM 9.A.

2 Household Incomes in West Hollywood Low (0-50% AMI) Low (>50 80% AMI) (>80 120% AMI) (>120% AMI) Percent of Households % 15.7% 16.9% 42.7% Estimated Number of Households 5,707 3,613 3,889 9,826 To better illustrate the need for affordable housing in West Hollywood, in the chart above, a box is drawn around the estimated number of households earning very-low, low, or moderate income. Households with the greatest need for affordable housing (very-low and low income households) are estimated to be 9,320, or 40.5% of households in the City. An additional 16.9% of households earn moderate incomes. Engaging the Community The Housing Element Update and housing goals and programs were developed as part of the General Plan Update in 2012 and 2013 through extensive community outreach and involvement. Since adoption of the current Housing Element in 2013, the City has continued to engage the community when designing and implementing housing programs to ensure community input is heard, and, as possible, community needs are addressed. This year, three community conversations on housing were held: on February 1, 2018 at at Plummer Park, the other two on February 15, 2018 and March 7, 2018 at the West Hollywood Park Community Room. Approximately 60 community members attended the meetings in total. The meetings were announced through the City s website, press releases, and at the first City Council meeting in January. Invitations were ed to all City Commissioners and Board Members, and community members who signed up for updates when they participated in the 2012/13 General Plan and Housing Element Update. The winter 2018 rent stabilization newsletter included an article announcing the meetings. Rent stabilization newsletters are mailed to all rent stabilized addresses and all rent stabilized landlords (about 17,000 addresses, 1,900 landlords). Comments received at these community conversations indicated the City s goals and programs continue to address housing needs. Displacement caused by the Ellis Act was a pressing concern, as was addressing homelessness. Participants also expressed a desire for more inclusionary housing and non-profit owned affordable housing, incentives for property owners to maintain existing apartment buildings, and programs to help seniors age in place. Ensuring equal access to housing, and making sure City 1 Southern California of Governments, 5 th Cycle Regional Needs Assessment Final Allocation Plan, 1/1/ /1/2021 Page 2 of 7

3 policies address the housing needs of all socioeconomic members of the community were also raised. State of California Regional Housing Needs Assessment (RHNA) Housing production in West Hollywood is included in the annual report. Housing counts are reported in relation to meeting the City s Regional Housing Needs Assessment (RHNA). California State Housing Element Law enacted in 1980 requires regional councils of government, locally the Southern California Association of Governments (SCAG), to determine existing and projected housing needs for households at all income levels. State legislation and the RHNA process are intended to address projected state and regional population growth, to create a better balance of jobs and housing in communities, and to ensure the availability of decent affordable housing for households at all income levels. SCAG allocates the number of housing units each jurisdiction must plan for in a given RHNA planning cycle at the beginning (the current planning cycle is ). The State then requires each jurisdiction to update its housing element, and if necessary update its zoning code and any other local laws, programs and requirements, to ensure the additional housing can be built. HCD reviews each housing element, and certifies the document if it meets State requirements. West Hollywood s RHNA and to-date building permits issued for new housing for the state planning cycle is provided below. Housing Production in West Hollywood (2014- ) (Building Permits Issued) Low Low RHNA ( ) Housing Produced in Housing Produced to-date ,060 In 2015, the number of building permits issued for new housing units in West Hollywood met and exceeded the City s RHNA for the current planning period. It should be noted, however, that West Hollywood s current RHNA is lower than the City received in the prior planning cycle. The reasons for this are, in part, because housing need estimations for the current RHNA were developed during the most recent recession. To adjust for this, SCAG reduced population growth projections to account for the abnormally high vacancies and unique market conditions due to prolonged recessionary conditions, high unemployment, and unprecedented foreclosures occurring at the time. The region has since rebounded and the need for housing, both affordable and marketrate, is most likely greater than initially estimated. In addition to this, SCAG adjusted how it estimated future population growth, focusing future population growth near mass transit, mainly subway and light-rail lines. 2 The result locally was the City of Santa 2 Draft 2016 Regional Transportation Plan/Sustainable Communities Strategy, Executive Summary Page 3 of 7

4 Monica received the bulk of expected population growth, and housing to plan for through the RHNA as a result of the new Expo light rail line. It further should be noted, the RHNA is not a maximum for housing production. In a memo 3 on RHNA, SCAG encourages jurisdictions to plan for housing above the RHNA minimum. The RHNA is a planning tool developed by the State of California to ensure all jurisdictions plan for anticipated population growth. The RHNA is the minimum number of housing units needed, not a maximum. Housing Production in other Westside Cities For some context, the current RHNA for the other three Westside Cities are provided in the chart below. For regional planning purposes, SCAG (the entity that allocates the RHNA) includes West Hollywood as a member of the Westside Sub-region. The Westside also includes Beverly Hills, Culver City, and Santa Monica. The RHNA for the City of Los Angeles is also provided since the Westside Sub-region is not contiguous and the four member cities are separated by the City of Los Angeles RHNA for Westside Cities and City of Los Angeles 4 Low Low Beverly Hills Culver City Santa Monica West Hollywood Los Angeles, City 20,427 12,435 13,728 35,412 In the current cycle, RHNA was allocated based on mass transit. Locally, this meant the City of Santa Monica received the bulk of anticipated new housing growth, in part, because of the new Expo light rail line. Beverly Hills, in contrast, received only 3 units. Past Housing Production As of the writing of this report, information on housing production in the current planning cycle ( ) was not available for other Westside cities; however information on housing production was available for the prior RHNA cycle ( ). Housing production occurring in the Westside Sub-region during the prior RHNA cycle is provided in the chart below, results for City of Los Angeles are also provided. Based on available information, of these cities, Santa Monica was the only one to meet its RHNA in the prior cycle. In fact, affordable housing production in Santa Monica exceeded the 3 SCAG Memo: Regional Housing Need Assessment Determination, August 17, Southern California of Governments, 5 th Cycle Regional Needs Assessment Final Allocation Plan, 1/1/ /1/2021 Page 4 of 7

5 RHNA. Data was not available for Culver City. 5 Similar to housing production in most Westside Cities, housing production in the City of Los Angeles did not meet the RHNA in the prior cycle. Past Housing Production in Westside Cities and City of Los Angeles June 30, 2006 October 15, 2013 Low Low Beverly Hills Prior RHNA Goal Housing Produced Culver City 6 Prior RHNA Goal Housing Produced Santa Monica Prior RHNA Goal Housing Produced West Hollywood Prior RHNA Goal Housing Produced City of Los Angeles Prior RHNA Goal 27,238 17,495 19,304 48,839 Housing Produced 3,925 2, ,339 Progress on Fulfilling the Housing Programs In addition to reporting on housing production and RHNA, the 2017 Progress Report includes updates on West Hollywood s housing programs. The Housing Element includes six goals and 26 programs developed through an extensive and inclusive community process. The City s housing programs are intended to meet West Hollywood s housing needs over the housing element planning cycle. The Human Services and Rent Stabilization Department and Community Development Department have primary responsibility for fulfilling the programs, and currently are focused on the following: Rent Stabilization and Tenant Eviction Protections. The Rent Stabilization Ordinance (RSO) protects tenants from unlawful eviction and sets a limit on 5 State law requires jurisdictions to prepare an annual progress report each calendar year to detail the implementation of their Housing Element and to submit it to HCD and OPR. Although charter cities are not required to submit the report, all jurisdictions including charter cities must submit annual reports to qualify for certain funding programs. 6 See footnote 7 above; information on housing production in Culver City was not available. Page 5 of 7

6 annual rent increases. The City continues to administer the ordinance and helps tenants know and exercise their rights. Inclusionary Housing. The City continues to require 20-percent of units in new apartment and condominium buildings to be set aside as affordable housing, or in certain instances allows an in-lieu fee. Fees are accumulated in the Affordable Housing Trust Fund and used to provide loans to non-profit housing providers who use the loans as a local match to qualify for addition funding to build affordable housing. Section 8. The Housing Choice Voucher Program (Section 8) in West Hollywood is run by the Housing Authority of the County of Los Angeles (HACoLA). The program assists extremely low and very low income households in making their monthly rent payments by providing a subsidy directly to the participating property owner. Rental Referral List. The City provides a list of available apartments in the City weekly. The list is free to both landlords and prospective tenants. In 2016, the City continued to provide the upgraded rental referral list, which is now mapbased and searchable. Home Secure. In 2017, the City continued the Home Secure Program. The program offers low-income seniors and disabled residents no-cost safety and security devices, such as no-slip strips and bathroom grab bars, and security deadbolts and window locks. Short, removable ramps are also possible. Energy Efficiency and Water Conservation. In 2017, the City continued to provide information and links on energy efficiency and water conservation on its website, and expanded outreach to RSO property owners on HERO financing for energy efficiency upgrades. Seismic Retrofit Program. Recognizing the need to ensure that apartment buildings are seismically secure, the City adopted a mandatory requirement effective April 1, 2018 for soft story buildings. Currently, the Rent Stabilization Commission is reviewing the cost sharing approach in the RSO and those used in other jurisdictions to ensure tenants are protected and landlords receive a fair turn on their investment. Approaches to Promoting Additional Affordability in the Housing Market. In 2017, a study was completed on eight strategies aimed at promoting additional affordability in the housing market, including an analysis of each strategy s advantages and challenges. Affordable Housing Development through Partnerships with Non-Profits. In 2017, the latest affordable housing project in West Hollywood was underway. West Hollywood Community Housing Corporation (WHCHC) is currently constructing a 22 unit building on Detroit Street, north of Santa Monica Boulevard for low/very low income households living with disabilities and for transitional age youth. Page 6 of 7

7 Supporting Legislation. The City actively supports legislation to amend or repeal the Ellis Act and Costa-Hawkins, or would maintain or increase funding for affordable housing. EXHIBIT A Annual Progress Report of Programs in the Housing Element Page 7 of 7