Pleasanton may appeal projected regional housing allocation

City leaders are considering an appeal of Pleasanton’s currently estimated regional housing needs allocation (RHNA), following a lengthy discussion on Tuesday during which staff said an adjustment to the number of housing units ultimately assigned for the city is possible, but not to expect significant changes.

Community development director Ellen Clark told the council that “a large shift in the city’s RHNA allocation is unlikely as a result of the appeals process,” but said it’s “important to go through the process” and exhaust available avenues to “get to a number that’s more fair for the city.”

Pleasanton had an estimated RHNA count of 4,900 new residential units for the upcoming Housing Element cycle in September, a 2.3 fold increase since the last housing cycle. But a more recent draft RHNA methodology — submitted last month by the Association of Bay Area Governments (ABAG), which determines the RHNA total for each Bay Area community — projects 5,965 units, nearly triple the number from the last estimate.

The addition of another 1,000 units is based largely on Plan Bay Area 2050 figures, and increases Pleasanton’s very-low and low-income allocations more than 1,600 units, and the above-moderate income category by over 1,700 units.

About 23% of the total allocation of 1,514 units have been produced in the current housing cycle, according to staff. That includes 353 affordable (very-low, low- and moderate-income units), according to city staff.

“In contrast, 1,310 above-moderate (market rate) units have been produced to date, more than twice the RHNA allocation of 553 units,” staff said. “Meeting the RHNA for below-market-rate units, given past production trends and the large increase in these categories, is going to continue to pose a significant challenge.”

A final methodology report was submitted by ABAG several months ago; during that time, ABAG and the Metropolitan Transportation Commission also released the final draft Plan Bay Area 2050, which showed “a significant increase in projected housing growth in the Tri-Valley.”

Councilmember Kathy Narum wondered if other cities are successful pursuing an appeal, whether their numbers could be redistributed to Pleasanton. Clark said, “If it’s sort of a zero-sum game, there’s a total allocation and it gets moved around, so someone has to absorb someone else’s reduction.”

Concerns about the methodology include how it “overlooked issues of significance or jobs production the South Bay, in particular over the past decade, and really seem to fail to allocate the sorts of housing numbers that would cause some communities in South Bay counties to have to build housing to meet the needs of the jobs that they’ve allowed for over the past few years,” Clark said.

On the flip side, she noted that “those same housing units seem to flow out to other parts of the region, and particularly to the East Bay and North Bay” — especially rural and small communities — and show “a pattern of land use that’s really counter to what the state has been attempting to achieve” of concentrating housing near jobs and public transportation.

“The methodology seems to have failed on many of those points. Those are some really compelling arguments to bring to the table in an appeal,” Clark added.

Councilmember Jack Balch asked if a change of 1,000 units is possible, to which Clark replied, “There’s not been a significant shift in the numbers, so a handful to maybe a couple hundred seems like the sorts of order of magnitude that have been granted in appeal.”

During public comment, former councilmember Becky Dennis said she didn’t “buy the state’s numbers about what housing we should build.”

“We should try to fully mitigate our own housing impacts,” Dennis said. “The appeal that we want to make about our numbers, I would really focus on the above moderate-income numbers even. That’s really going to kill our ability to meet state climate goals, so that’s in conflict.”

Dennis added, “It would be better really to take, even if you added numbers in low and very low income housing, and sort of let the above moderate folks take care of themselves. Because if we do manage to convert some commercial properties to housing, we’d be lowering our own housing demand that is shown in our nexus studies.”

Emphasizing the need to maintain a balance between jobs and housing locally, Dennis suggested the city “look for some legal refuge in a superior goal” and base their appeal on that instead of the methodology.

“Which is to say: We aren’t going to be like the communities around us, we are going to take care of our own needs, and that involves X many units of affordable housing in these income levels, and we can prove that all through our nexus study,” Dennis said.

Dennis concluded by suggesting updating the housing fee structure, “because to the extent that we buy the workforce housing that we need, we can basically open that up more to the workforce locally and we can get some good credits for that.”

An appeal is still on the table but staff said only a “very low proportion of (RHNA) appeals are ultimately granted,” and recommended using the most recently published estimate as a working number while the Housing Element update moves forward, to give sufficient time to complete the update.

Review and approval of the RHNA methodology is expected to be completed by the beginning of April, with draft RHNA allocations being issued to local jurisdictions by May. Final allocations will be issued by the end of the year.

Along with the report, the council also approved two contracts related to the Housing Element update on Tuesday night.

Because of “the extensive changes to state law and the strict deadlines posed by these laws,” the city has entered a $302,001 contract with Lisa Wise Consulting, and a $343,170 contract with First Carbon Solutions. The totals include a 15% contingency for general work under each contract.

Most of the cost for both agreements will be paid by approved Local Early Action Planning (LEAP) and Regional Early Action Planning (REAP) grant funding — $300,000 and $61,755, respectively — with the remaining (up to $283,416) to be paid by the lower income housing fund, as the city has done during prior Housing Element updates.

The city also applied for an additional $100,000 in competitive grant funding, which has not yet been approved.