CC 10-23-2024 Item No. 1. Statewide Housing Laws_Supplemental Report
CITY COUNCIL STAFF REPORT
SUPPLEMENTAL 1
Meeting: October 23, 2024
Subject
Statewide Housing Laws that Apply to Applications for Housing Development Projects
Recommended Action
Receive report regarding statewide housing laws that apply to applications for housing
development projects in the City of Cupertino
Supplemental Report
Staff’s responses to questions received from councilmembers are shown in italics.
Q1: Cupertino self-certified the 2015-23 Housing Element shortly before the January 31,
2015 deadline. The HCD certified version was later adopted on May 19, 2015 (as I
remember). Many cities self-certify for the last Housing Element. Why the Builders'
Remedy was not an issue in 2015?
Answer: While there are likely many factors contributing to the greater prevalence of builder’s
remedy projects during the 6th cycle housing element, the passage of SB 330 in 2019, which
provides for early vesting of development rights based on the filing of preliminary application, is
likely the most significant change in law that has affected builder’s remedy projects. Housing
element requirements also significantly changed, and HCD’s review was more rigorous, with a
shortage of competent consultants. As a result, cities have had a more difficult time meeting the
housing element update deadlines during the 6th cycle, leading to more widespread
noncompliance.
Q2: A resident sent in this quote from ABAG: "HCD approval is not required for a
housing element to be found substantially compliant with state law. State law provides
that a city or county may adopt its own findings explaining why its housing element is
substantially compliant with state law despite HCD’s findings. (Section 65585(f).)
However, HCD is authorized to refer agencies to the Attorney General if it finds a
housing element out of compliance with state law. (Section 65585(j).)"
(https://abag.ca.gov/sites/default/files/documents/2022-10/Builders-Remedy-and-
Housing-Elements.pdf)
As of January 2024, has the state law changed on the requirement for "a housing element
to be found substantially compliant with state law"?
If the state law has changed in the requirement for "substantially compliant with state
law", please indicate which bill/which year has changed it and please quote the new
state law requirement.
Answer: Despite these provisions of state law, HCD declared in March 2023 that cities could not
“self-certify” and that its approval was required for an adequate housing element. Some trial
courts have accepted HCD’s position, while others have not. AB 1886 (2024; effective January 1,
2025) states that a housing element is not in compliance with state law unless either a court or
HCD finds it in compliance, and also states that this is “declaratory of existing law.” AB 2023
(2024; also effective January 1, 2025) creates a rebuttable presumption of invalidity in any legal
action challenging a local government’s action or failure to act if the HCD finds that the action or
failure to act does not substantially comply with the local government’s adopted housing element
or housing element obligations, among other changes.
Q3: For the last 2015-2023 Housing Element, it seems the city did not have to submit any
version to HCD and then receive comments until HCB is satisfied with the Housing
Element. What changes in the state law have made this process necessary? (Bill
number/which year and a quote would be helpful.)
Answer: The HCD review process has been in place for multiple housing element cycles, but the
relevant statutory provisions in Government Code section 65585 have been amended fourteen
times since 2016.
Q4: Some cities have self-certified their current 2023-30 Housing Element. What cities
have done that in Bay Area? Have they been subjected to any Builders' Remedy projects?
Have lawsuits been filed to challenge their self-certification?
Answer: This question is outside the scope of the noticed agenda item.
Q5: The City submitted a few versions of the draft 2015-2023 Housing Element. As I
remember, (please correct me if I mis-remembered them)
• the first version was submitted on Feb. 2, 2023 (a couple of days late)
• the second version in Oct. 2023
• a revised second version in November 2023
• then a third version in Feb. 2024
• a revised third version in April 2024, and
• The final version in May 2024.
Q5-1: Why did it take almost 8 months to submit the second version? (The new
consultant company was retained by November 2022, as I remember)
Q5-2: Why Cupertino did not self-certify the second or second revised version in
Oct./Nov. 2023, since the changes later do not seem to be affecting the "substantially
compliant" requirements?
Q5-3: Any changes in the third version or later version would make a difference on
whether the housing element is "substantially compliant" or not? If so, did HCD point
out such deficiency in their earlier comment letters so Cupertino can address the issues
earlier?
Q5-4: If Cupertino has adopted a self-certified housing element in Oct/Nov 2023 and
then continue to revise it until it is also certified by HCD, would that have provided the
City more protection from Builders' Remedy project?
Answer: These questions are outside the scope of the noticed agenda item.
Q6: Cupertino had only 5 identified 5 HE sites for the 2015-2023 Housing Element to
mee the RHNA requirement of 1064 sites. These sites are all viable sites and 5 projects
have been approved on them, although construction has not started on some of them for
factors beyond the city's control. Cupertino has done its job as a city for the 2015-2023
Housing Element. Has the HCD given the city any credit for the good performance? If
not, why not?
Answer: This question is outside the scope of the noticed agenda item.
Q7: In the adopted Cupertino 2023-2031 Housing Element, how many pipeline units
were not included, towards meeting the RHNA requirement of 4588 units? What are
these units and why are they not counted?
Q7-1: Is there any state law that forbit these units to be counted? If not, who defines the
criteria on whether or not pipeline units could be counted? Where are such criteria
written?
Q7-2: Have the same criteria for counting pipeline units been applied to all cities
universally? Why and why not?
Answer: This question is outside the scope of the noticed agenda item.
Q8: It seems the two Builders' Remedy projects proposed on R1 sites are proposed in
Feb. 2024, after the settlement with YMIBY Law. Has the settlement agreement with the
YIMBY Law have any impact on the Builders' Remedy projects?
Answer: This question is outside the scope of the noticed agenda item.
Q9: There seems to be different opinions on whether Builders' Remedy projects need to
comply with all other existing city standards, except the zoning. Please provide the
opinions on both sides of the issue.
Answer: The City Attorney’s Office will continue to provide confidential advice on this issue.
Q10: For a Housing Element site, a site zoned for housing, but not an HE site and a
Builders' Remedy site, what are the different requirements in terms of CEQA
requirements?
Q10-1: What's the impact of Cupertino's settlement with YIMBY Law on the CEQA
requirements these projects have to follow?
Answer: Builder’s remedy projects are subject to CEQA, subject to any applicable exemptions.
Certain projects on housing element sites that contain 20 percent lower income housing are
designated as “by right” projects under state law and are not subject to CEQA. The City’s
settlement of the litigation related to the late adoption of its housing element does not affect the
CEQA requirements for builder’s remedy projects.
Q11: The Heart of the City Specific Plan requires a 75% frontage in order to maintain a
continuous commercial strip along Stevens Creek, as that is vital to create viable
shopping environments, so they are connected with other commercial sites. But there are
three proposals (the United Furniture site, the Pizza-Hut/Staple site and the Panera site
seem to be all 100% residential sites. Why are they allowed to not comply with the Heart
of the City Specific Plan? Does this have to do with AB 2011 or other state laws?
Note: Sorry, I am probably not referring to them with the right term. These are the
commercial stores these residential-only projects will replace so it's easier for me and
other residents to understand the location of these projects. Feel free to inform us the
property name for these projects.
Answer: Without referring to any specific project, it is common for developers to seek concessions
under State Density Bonus Law to reduce or eliminate mixed-use requirements on sites zoned for
residential use.
Q12: The state is not supposed to pass down unfunded mandates to the City's. (I heard
that it is a requirement in California Constitution. If so, please point me to the exact
passage.) But the City has spent a lot on adopting the Housing Element and the City has
lost retail sites due to mandates like AB 2011 or the like, how can the City request for
compensation from the state for the expenses for implementing state laws and the loss in
revenue due to state law mandates?
Answer: This question is outside the scope of the noticed agenda item.
Q13: The Housing Element used to be a planning document and the cities report the
progress with the number of permits pulled. The cities can only plan with zoning and
approve projects. The cities are not property owners of any development sites and are
not builders or their investors. But the state law has changed since the last housing
element cycle to add sticks. Which bills have passed to add "sticks" to measure the cities'
performance? Are the performance measured on the number of units approved? Or the
number of units permitted? Why one or the other is used by the state as a performance
measure?
Answer: The City is subject to a requirement to report to HCD annually on progress toward
meeting its regional housing needs allocation (“RNHA”). The City is also subject to no net loss
rules, which could require housing element revisions if the City’s development capacity drops
below its RHNA. Finally, the City is subject to SB 35 (streamlined, ministerial review) at
various levels of affordability depending on the amount of housing constructed at various income
levels.
Q14: In the 2023-2030 Housing Element cycle, what state laws define how the city's
performance will be measured? At what point? What's the expected outcome for each
point? (For Cupertino, how many units by what date specifically?)
What's the consequences for not meeting the expected outcome at specific time?
Answer: See the response to Question No. 13, above.
Q15: Cupertino has identified almost 60 HE sites for the 2023-2030 Housing Element. But
the interest rate is high and the construction and raw material costs are high and labor
costs are high too. In case some of these HE sites are approved , but not built at the end
of the HE cycle in 2023, what rights will be given to these sites?
In case some of these HE sites do not even propose any project, what rights will be given
to these sites?
Will Cupertino be able to count these HE sites in the next HE?
Answer: Under existing law, any rezoning required in the 7th cycle housing element will be based
on the City’s development capacity at that time and the RNHA assigned to the City for the 7th
cycle. That process has not yet begun.
_____________________________________
Prepared by: Christopher D. Jensen, City Attorney
Barbara Kautz, Goldfarb & Lipman LLP
Approved for Submission by: Tina Kapoor, Interim Assistant City Manager
Pamela Wu, City Manager