Davis Receives Another Letter from HCD on Its Lack of Compliance with the Housing Element

By David M. Greenwald
Executive Editor

Davis, CA – While city staff maintains that there were no new findings in the letter, the city received another “Notice of Violation” from HCD noting that the city’s most recent draft which was submitted way back on February 2, 2023, “does not comply with requirements under State Housing Element Law.”

On April 3, 2023, HCD issued a third findings letter to the City noting “revisions were still necessary for the housing element to be compliant with State Housing Element Law.”

The letter notes a number of consequences for the city’s failure of compliance.

Noncompliance, for example, will lead to “ineligibility or delay in receiving state funds that require a compliant housing element as a prerequisite.”

HCD lists the following:

  • Permanent Local Housing Allocation Program
  • Local Housing Trust Fund Program
  • Infill Infrastructure Grant Program
  • SB 1 Caltrans Sustainable Communities Grants
  • Affordable Housing and Sustainable Communities Program

More ominously, HCD warns, “jurisdictions that do not meet their housing element requirements may face additional financial and legal ramifications. HCD may notify the California Office of the Attorney General, which may bring suit for violations of State Housing Element Law.”

Further, it warns, “state law provides for court-imposed penalties for persistent noncompliance, including financial penalties. For example, Government Code section 65585, subdivision (l)(1 ), establishes a minimum fine of $10,000 per month, up to $100,000 per month. If a jurisdiction remains noncompliant, a court can multiply those penalties by a factor of six.”

HCD adds, “Other potential ramifications could include the loss of local land use authority to a court-appointed agent.”

The city received the letter on August 31 and responded the next day.

The city responded, “It is our understanding that all jurisdictions without a certified Housing Element received the same or similar letter.”

The city noted that it sought to work with HCD to receive certification for its housing element.

“Since receipt of the April letter, the City has been working diligently and in good faith to prepare further revisions to the housing element to address HCD’s April comments,” the response letter reads.

In addition, the City has been “simultaneously implementing housing element programs, processing a myriad of housing project entitlements, and preparing the zoning amendments necessary to accommodate its Regional Housing Needs Assessment (RHNA) allocation.”

The response continues, “The City is working with the goal of bringing both a revised housing element and the zoning amendments to the Planning Commission and City Council before the end of 2023, with all ordinances effective by early 2024.”

This is consistent with the city’s response to Legal Services earlier this summer.

HCD has filed a number of lawsuits against local jurisdictions, most recently settling a lawsuit against San Bernardino.

Legal Services in particular was concerned that the city failed to properly identify land suitable to meet the housing need.

“A jurisdiction must identify an inventory of land suitable and available for residential development to meet the locality’s housing need,” they argue.

In addition to citing potential problems with the Nishi site, they also note, “Housing Element Version 2 still includes the Brixmor/University Commons Project, but the residential component of that project has since been removed. The City must identify other sites to meet the shortfall.”

Legal Services also notes that the city failed to complete its rezone obligation when the “the City failed to submit a compliant adopted housing element by its sixth cycle due date of May 15, 2021. This means that HCD cannot find the City in compliance with Housing Element law until it completes all rezones necessary to accommodate the shortfall of sites.”

The city still believes it can meet these requirements without resorting to peripheral housing would create additional delay as it would require a Measure J vote.

In its letter, the city acknowledges “the housing element cannot be found to be substantially compliant until the City completes these rezoning actions. As such, the City intends to bundle the housing element revisions with the zoning amendments.”

The city then lays out state rezoning law which requires environmental impact analysis under CEQA and two readings.

“The City is acting as quickly as possible while also engaging with the community and ensuring compliance with CEQA and public hearing / notice requirements,” the city maintains.

On Nishi, the city writes, “The element will be revised to further explain the status of the Nishi project development agreement. The development agreement already requires compliance with fair housing laws and does not restrict leases to students. However, the City is adding clarifying language to the development agreement explicitly stating that the project may not restrict leases to students only.”

The city adds that it expects to bring the Nishi project back to the Planning Commission for approval of the remaining design review.

It anticipates that the project will be “fully entitled and ready for construction by early 2024.”

The city also addresses the University Commons Project.

Writes the city, it “plans to revise its site inventory to identify additional sites to accommodate the (revised) shortfall of 485 lower income housing units. The City has already begun the analysis for rezoning approximately 20 sites and has identified unit capacity that exceeds the 485 dwelling unit requirement.”

The city adds, “With these zoning amendments, the City believes it will have planned and zoned for more than the required 2,075 dwelling units called for in our 6th Cycle RHNA, including for the allocated numbers at all income levels.”

The City also notes that “it has 297 apartment units that will be available for occupancy in the near term and 360 additional apartment units that are under construction.”

In addition, “the City is currently processing applications for 479 apartment units under the Downtown Davis Specific Plan, which was adopted in December 2022. At least two of these sites (totaling 338 of the 479 units) in the Downtown Specific Plan area were not assumed in the City’s adopted housing element and represent additional units beyond what was assumed.”

The City writes that it is “confident that the annual progress reports in the coming years will demonstrate that the City is actively approving housing entitlements and that units are being constructed to meet the City’s housing need this Housing Element cycle.”

The city is thus hoping to avoid litigation in this round of RHNA, however, as noted by the Vanguard, the next cycle figures to be much more problematic.

About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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