Part I of “Are Local Housing Plans Making a Difference in Santa Clara County?”

This series of articles examines how well cities and towns across Santa Clara County are doing at meeting the housing needs of all their residents, at all income levels. Our policy team will share about the programs cities are working on to try to increase new homes, improve fair housing and access to opportunity for lower-income residents, and protect tenants from displacement and homelessness. The series includes analysis of progress toward the goals of local Housing Elements, highlighting best practices and opportunities to do better. 

Two years into the current planning cycle, most jurisdictions in Santa Clara County are lagging far behind expected progress on their housing targets- especially for people with lower incomes. Read on to learn how your city is doing!

Two years into the current planning cycle, most jurisdictions in Santa Clara County are lagging far behind expected progress on their housing targets, especially for people with lower incomes. 

Every eight years, the Regional Housing Needs Allocation (RHNA) process is used to assign each city and county in California their “fair share” of the region’s new housing units to make room for future growth and to quell our housing crisis. This process requires all local jurisdictions to create an 8-year plan (known as a Housing Element) to meet the housing needs of their residents, at all income levels. The current RHNA cycle, the state’s 6th, covers the period from 2023 to 2031.

All of the jurisdictions in Santa Clara County had their housing elements certified by the state’s Department of Housing and Community Development (HCD) in 2023 and 2024. Now the hard work is underway, as local jurisdictions implement the programs in this 8-year work plan. Housing Elements lay the foundation and create the conditions for thousands of new homes to be built. How feasible and successful these plans are depends on the involvement of housing advocates like you!

Acknowledging headwinds to development

The moment we are in is a difficult one in so many ways. In the world of housing, we are facing high and escalating costs both to build and to operate housing, not enough funding yet for all the affordable homes we need, construction workforce shortages, and rising income inequality that creates intense pressure on people who don’t make enough money to compete in our high-cost housing market. In this moment of real duress, people need safe, stable, and dignified homes they can afford now more than ever. It will take everyone in our community, including each of you, to make sure we all come through this together.

Are Santa Clara County’s jurisdictions permitting enough new housing at all income levels?

We know we need homes for people at all income levels, and that’s why the RHNA assigns specific targets to cities by income level. 

You can see here that in Santa Clara County, almost as many people have incomes that are at the lower end of the spectrum as incomes that are higher- and these are people who struggle to compete in our high-cost housing market. SV@Home’s work is focused on meeting the housing needs of people in those lower income categories. 

It is important not to reduce progress to a single number representing the percentage of all housing units built in a jurisdiction across income levels, because that leaves out the information we need about who we are- and are not- building for. We need to break it out by income level to understand the full picture of what is happening.

So who are we building for?

Progress toward housing production targets in the first two years of the planning cycle

Cities get credit toward their RHNA when a home is permitted. These homes are fairly far along in the planning process, but are not built yet.

The RHNA covers 8 years, and we are 2 years in, so the purple line in the chart below is where we would expect cities to be a quarter of the way through the cycle. The chart shows the percentage of homes that have been permitted for very and extremely low income residents (the RHNA for these two categories is allocated together, and HCD expects that the target is divided evenly between very and extremely low income).

People in Santa Clara County with extremely low incomes might include a cook, home health aide, childcare worker, or a disabled or older adult living on a fixed income. People with very low incomes might include a retail or grocery worker, or a teacher early on in their career.

You can see that only two jurisdictions in the whole county are meeting or exceeding the progress we would expect them to make by this point in the cycle, with the City of Morgan Hill showing a stunning lead! 

It is important to note that only the jurisdictions with gold-colored bars are reporting that all or most new homes at this income level are deed-restricted. That is really important, as we discuss in a moment.

Here is our progress on homes for low-income families and individuals:

People in Santa Clara County with low incomes might include an office manager, a construction worker, or a firefighter.

Again, Morgan Hill is showing tremendous leadership. However very few jurisdictions are coming close to the purple bar, where we would expect them to be at this point in the RHNA cycle, and only the jurisdictions with gold-colored bars are reporting that all or most new homes at this income level are deed-restricted. 

What does it mean for a home to be deed-restricted affordable?

A deed restriction is what keeps a home affordable to a resident of a certain income. Usually deed restrictions happen when there is some public subsidy of the home, or if a developer of market-rate housing is required by the city where they are building to include a proportion of affordable homes.

HCD allows cities to report a portion of some types of homes as very low income or low income even without deed restrictions, if the city has some type of documentation to show why the rent would be at that level.  

Many of the unrestricted homes reported are accessory dwelling units, or ADUs, sometimes known as a granny cottage or in-law unit. Many cities in our region are using an outdated study that shows that rents for ADUs tend to be distributed among the income categories. This study is used as the rationale to divide the number of reported ADUs permitted in the city among income levels, even if the city does not know what the rents will be- or if they will be rented at all.

Relying on non-deed restricted housing for lower-income residents is really dangerous- even if it is technically allowed- because there is no guarantee of lasting affordability.

Homes for people with moderate incomes

There are many fewer homes that are deed restricted at the moderate income level, but people earning incomes in this range are generally able to compete in our rental market, even if the home they can afford might not be as nice or as new as they would prefer. 

It is still important to make sure we have enough homes for people in this range. 

Homes for people with above-moderate incomes

Finally, this chart shows the new homes for people with above-moderate incomes. These are the homes the market generally wants to build- they do not require any public subsidy; they mostly just need land use and policies that remove barriers to new development. 

We are seeing more cities here exceed or get close to that purple bar where we would expect them to be, but there is still a significant gap in the county, with some cities really struggling.

So what are cities working on to try to improve this progress? 

One of the most critical components of the Housing Element are the Programs- a series of concrete, actionable commitments each city makes to meet the housing needs of its residents. Follow this article series for insights and analysis of progress on Housing Element programs in Santa Clara County’s cities and towns.