Report 2020-108 Recommendation 11 Responses

Report 2020-108: California's Housing Agencies: The State Must Overhaul Its Approach to Affordable Housing Development to Help Relieve Millions of Californians' Burdensome Housing Costs (Release Date: November 2020)

Recommendation #11 To: Housing and Community Development, Department of

To ensure that all local jurisdictions make sufficient efforts to provide affordable housing, HCD should, by June 2021, develop and implement procedures for actively monitoring local jurisdictions that are not on track to provide the needed lower-income housing units included in their housing plans. Specifically, HCD should identify local jurisdictions with severe underdevelopment of affordable housing and indications of high need for that housing, and it should initiate reviews of those local jurisdictions that include steps to identify why they are not developing needed affordable housing. HCD should then provide technical assistance or take enforcement actions as necessary to help resolve any issues it identifies.

Annual Follow-Up Agency Response From November 2022

Beyond HCD's complaint-based housing law accountability work, HCD is implementing this audit recommendation around proactive accountability in the following ways: HCD is currently using Annual Progress Report data to track jurisdiction progress in meeting its Regional Housing Need Allocation, which in part displays whether they are on track to meet their lower-income need and also tracks timelines for entitlements and permitting using a sampling methodology.

HCD is working closely with all jurisdictions region by region as they update their housing plans (housing elements), which include historical and forward-looking analyses of local considerations, including indications of high housing need, governmental and non-governmental constraints, and their plan to address these local factors. At this point, housing element reviews for the North State, San Diego, Sacramento, Southern California, and the Bay Area are underway, with the Central Coast and San Joaquin Valley coming due in 2023 and 2024. A jurisdiction's housing element commitments are tracked and monitored to ensure implementation. HCD has current internal tracking and monitoring procedures and is enhancing this tool with assistance from IT; that expansion is expected to be complete in February 2023.

For jurisdictions that are not completing their housing elements in a timely manner, HCD has developed procedures to proactively engage and prepare to escalate accountability as necessary. As an example, HCD sent 17 letters of inquiry in April 2022 and three notices of violation in September 2022 to jurisdictions that have not submitted a housing element. HCD also sent five letters of inquiry in August 2022 to jurisdictions that remain out of compliance with State Housing Element Law. In August 2022, HCD determined further intervention was warranted in the case of San Francisco. HCD initiated the Policy and Practice Review into San Francisco's process for approval of housing.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

HCD provided its current procedures for tracking and monitoring local jurisdictions. It also provided us with examples of a notice of violation and letter of inquiry it sent to local jurisdictions. To the extent that HCD continues to monitor and review local jurisdictions, it will implement our recommendation.

1-Year Agency Response

Since the last report HCD received additional funding in the state's 2021-22 budget allowing the department to officially launch the Housing Accountability Unit with 25 positions. Only three vacancies remain left to fill; four of these positions are attorneys to support Housing Accountability work.

Efforts also continue on the Information Technlogy (IT) solution to track and monitor accountability.

a. Since our last report, mid-level requirement sessions were completed according to schedule on September 29, 2021, and a Request for Information was released. IT is currently in the planning and procurement phase and is in the process of speaking with potential vendors and preparing to review software demos. After completion of the planning and procurement phase in January 2022, functional requirement sessions will be held through March 2022 with build-out of the system to be completed by December 2022.

b. With this IT solution we will be able to implement many of the proactive suggestions identified in the audit:

a) Monitor and identify jurisdictions that are delinquent on housing commitments,

b) Flag jurisdictions that meet certain criteria for follow up investigation, and

c) Track complaints received and their resolution or outcomes.

California State Auditor's Assessment of 1-Year Status: Pending

6-Month Agency Response

HCD is on track with the items reported in the 60 day response.

1) HCD is in the process of developing a hiring plan for the 12 new policy staff and 4 new Legal division staff positions to support the accountability and enforcement in anticipation of the 2021-2022 budget.

2) Scoping for the IT case management solutions is still under development, but HCD will soon release a Dashboard of Housing Element Annual Progress Report Data that will provide insights into jurisdictions' performance and progress in meeting its housing commitments.

3) HCD is developing a system in conjunction with the finalization of the Accountability and Enforcement Business Process to monitor and track outcomes from the 6th Cycle Housing Element Reviews. This system will proactively monitor a) housing element conditional compliances; b) jurisdiction commitments to rezone; c) jurisdiction commitments to remove barriers that constrain housing development; d) commitments to affirmatively further fair housing, among others.

California State Auditor's Assessment of 6-Month Status: Pending

60-Day Agency Response

There are efforts underway to expand the Housing Accountability Unit capacity within HCD to pursue greater accountability and enforcement, including integrating additional proactive efforts, such as those in this recommendation. That will primarily look like:

1) Staff capacity building: Hiring additional staff to monitor, educate, and enforce as necessary, and

2) HCD developing an IT solution to integrate accountability into our current housing element tracking system.

With these improvements we will be able to:

a) Monitor and identify jurisdictions that are delinquent on housing commitments,

b) flag jurisdictions that meet certain criteria for follow up investigation, and

c) track complaints received and their resolution or outcomes.

California State Auditor's Assessment of 60-Day Status: Pending

All Recommendations in 2020-108

Agency responses received are posted verbatim.