Report 2021-125 Recommendation 5 Responses

Report 2021-125: Regional Housing Needs Assessments: The Department of Housing and Community Development Must Improve Its Processes to Ensure That Communities Can Adequately Plan for Housing (Release Date: March 2022)

Recommendation #5 To: Housing and Community Development, Department of

To ensure that it does not reduce its needs assessments based on inappropriate information provided by councils of governments, by June 2022 HCD should develop a formal process to review the appropriateness of councils of governments' proposed comparable regions, including identifying the criteria it will consider when reviewing councils of governments proposals. HCD should use this formal process and criteria to consistently evaluate the appropriateness of the proposals to ensure that they identify regions with healthy housing markets.

6-Month Agency Response

HCD has established a formal set of criteria and factors that COGs may include in their comparable region analysis, which HCD will use when reviewing the appropriateness of council of governments' proposed comparable regions. This criteria excludes factors that are either identical to or highly correlated with overcrowding and housing cost burden to ensure proposals identify regions with healthy housing markets. This documentation is intended to implement the actions HCD committed to in its March 4, 2022 response to the Auditor's report.

HCD is also planning to go above and beyond the changes the Auditor requested in the 2021-125 Audit. In the coming months, HCD may consult with a panel of experts to get input on the criteria and factors that HCD has developed to assess proposed comparable regions.

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

60-Day Agency Response

HCD will establish a formal set of criteria and factors that COGs may include in their comparable region analysis.

In considering acceptable factors, HCD will exclude factors that are either identical to or highly correlated with overcrowding and housing cost burden.

In establishing formal criteria and factors for comparable region analysis, HCD may consult with a panel of experts to get input on what factors are acceptable as measures of comparability but are not correlated with high rates of overcrowding or cost burden.

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

All Recommendations in 2021-125

Agency responses received are posted verbatim.