The audit also recommends legislation to force housing agencies, which implement state housing law and subsidies, to coordinate their activities and resources less wastefully.
The governor appoints the auditor, an independent office, from nominees the legislature’s Joint Legislative Audit Committee submits for a four-year term. As it did unanimously in this case, the joint committee can instruct the auditor to review how effectively state agencies perform.
“State law requires jurisdictions to adopt local housing plans [as part of their General Plans] that include sites that accommodate needed units and actions to address barriers to development,” according to the auditor’s report. But “state law is not strong enough to ensure that local jurisdictions actually mitigate these barriers — even on the sites they identify for affordable housing.”
As The Coast News previously reported, North County cities have in recent years issued far fewer building permits than their housing plans outline. Similarly, the audit finds jurisdictions statewide have only permitted 11% of their planned-for lower-income units, as of June 2019.
The report alleges Encinitas stymied a proposed apartment complex by requiring developer Randy Goodson to furnish “extensive additional information,” including a traffic study, in a way “inconsistent with the streamlined review process state law requires.”
The project, subsequently withdrawn, would’ve gone on a site the city rezoned “specifically to accommodate” affordable housing, according to a February letter from the state’s Department of Housing and Community Development, or HCD.
Encinitas City Council members didn’t comment.
“The city must comply with state law,” but “also ensure that all housing projects are consistent with our General Plan policies” regarding “environmental responsibility, traffic and public safety,” said Lillian Doherty, a city staffer.
The audit recommends the legislature establish “a timely enforcement mechanism,” such as an appeals process for developers “when local jurisdictions fail to approve eligible affordable housing projects.”
SB 744 would’ve established a five-member “Housing Accountability Committee” for this purpose, but it died in committee in 2004, partly due to concerns about constitutionality.
“Only courts have the authority to review whether a legislative body has complied with the law,” according to an assembly committee analysis at the time. “The Housing Accountability Committee would be an example of the executive branch exercising judicial power.”
The auditor also recommends the legislature limit municipalities’ discretionary review of projects on sites identified in their housing plans and increase minimum residential density requirements for affordable housing.
“These are the most significant barriers we identified where clear gaps in state law exist,” the audit says.
In addition to turning the screws on municipalities, the auditor admonishes the state government to put its own house in order.
The state’s various “housing agencies’ misaligned and inconsistent program requirements … can slow development and increase project costs” for affordable housing projects, which “are often more difficult to make financially feasible in the first place.”
Additionally, “the state does not have a clear plan describing how or where its billions of dollars for housing will have the most impact. … The absence of a comprehensive and coordinated plan allowed the mismanagement and ultimate waste of $2.7 billion in [tax-exempt] bond resources to occur with little scrutiny.”
“The state lacks a unified data system across state housing agencies that tracks applications, type and amount of funding awarded, number of units created, and project location for all housing [subsidy] awards.”
The auditor recommends the legislature require housing agencies to standardize eligibility requirements and combine processes for developers to obtain state subsidies; consolidate redundant agencies; create a master list of, and strategic plan for, employing all the state’s financial resources for affordable housing; and articulate a “housing data strategy” to “measure the distribution and impact of state-awarded funds,” among other things.
“HCD appreciates the audit’s suggestions around additional data and scope and we enthusiastically look forward to embarking on that effort,” an HCD spokeswoman said.
The Coast News asked four of North County’s state legislators to comment. They were mostly dubious about recommendations to enhance state authority over local land use control.
Senator Pat Bates (R-Laguna Niguel) said: “Over the past several years, the legislature has sought to limit the ability of local governments to regulate housing development. I recognize we need more affordable housing, but I am skeptical of state efforts to limit local control even further.” The audit is “vague on precisely how to eliminate barriers without also gutting local control.”
Senator Brian Jones (R-Santee) said: “The [auditor’s primary] recommendations seem, in general, worthy of consideration, but clearly some details would need to be worked out with a consensus of stakeholders being the desired goal.”
Assemblywoman Tasha Boerner-Horvath (D-Encinitas) provided a detailed written statement, available online, noting that “economic and regulatory realities at the local level make one-size-fits-all housing policies ineffective. No amount of market-rate housing will be affordable regardless of density. Only subsidized housing will be affordable, which means inclusionary housing, tax credits and state matching grants for local gap funding…”
Boerner Horvath said she supports some of the auditor’s recommendations, but those “for streamlining and eliminating [local] barriers, unfortunately, missed critical information. We cannot [generate affordable housing] by trading it for reduced safety of our roads or harming our environment.”
Assemblywoman Marie Waldron (R-Escondido) said: “California’s burdensome regulations, including CEQA [the California Environmental Quality Act], are major obstacles …. High fees associated with construction add tens of thousands to the costs of new homes. Restricting local control is not an answer, but incentivizing new housing supply is.”