Capacity to Deliver Housing

This section addresses both local developer capacity to deliver “affordable housing” as well as challenges related to the delivery and facilitation of additional housing at the local jurisdictional level.

Local zoning regulations, permitting processes, and “not in my backyard” opposition are all contributing factors affecting the production of housing. It has been said that “time is money.” and there are several actions that local jurisdictions can undertake to reduce the amount of time it takes for a developer to obtain the approvals needed to build housing. Once those barriers have been addressed, jurisdictions can also begin to require that developers incorporate or otherwise provide for more affordable housing.

While it may seem contrary to expectations, developers are typically willing to pay for better service because it generally will take less time for them to complete project reviews. Shortened review time frames can also reduce risk from other factors (e.g., increasing material, labor, and land-holding costs) that can both impact project feasibility but also the final cost of housing.

Staffing. Staff capacity remains challenging for most Valley cities and counties. A jurisdiction’s capacity can fluctuate depending on activity and staffing levels. The continually evolving and complex regulatory environment requires staff training and development to ensure effective, efficient, and equitable development application processing. Additionally, ongoing data collection, annual reporting, housing site inventory maintenance, compiling funding applications and encouraging production, all rely on staffing capacity.

The San Joaquin Valley has many small- to medium-sized jurisdictions that have limited staff capacity to specifically address housing needs. Even larger jurisdictions struggle to maintain the staffing levels and expertise needed to address the needs. Staffing capacity is, therefore, a key factor in providing affordable housing.

A key component for delivering housing is to have city or county staff available to complete permit processing functions in a timely manner. One approach is to establish a “pay for service” model that charges developers for the time reviewers spend working on their projects. This enables jurisdictions to both provide and focus staff on permitting review services while providing developers with reasonable expectations for project review time frames. It will also assist jurisdictions in their efforts to meet or exceed requirements of the Housing Accountability Act, Housing Crisis Act, Permit Streamlining Act, and other permit processing obligations. Other methods for creating staff capacity are also identified in the recommendations section that follows.

Streamlining. The most important way to reduce permitting time frames is to allow housing by-right in residential zones (e.g., no conditional use permits). Allowing housing by-right in a residential zone should not be surprising to anyone. This will not only reduce the number of permits required but will also avoid “not in my backyard” opposition. The next step in streamlining is to adopt objective design and development standards that developers, staff, and the public can readily understand and quickly determine if a project complies or not. By contrast, discretionary review processes are more difficult and time-consuming to administer as they typically require at least internal consultation but may also involve referrals to boards and commissions for review and action, all of which add time.

Incentives for affordability. Jurisdictions should also explore other possible incentives that motivate developers to provide affordability. Possibilities include assistance with the provision of infrastructure (perhaps accelerating timing for a planned public project), impact fee deferrals for the entire project, and/or waivers for affordable units.

Requirements for affordability. Once project review time frames have been streamlined and other incentive packages are in place, market-rate housing developers should have some capacity to provide improved housing affordability. The level of affordability needs, however, to be reasonable and not render a project infeasible. Inclusionary housing ordinances are one option; however, there can be challenges in finding the right fit or amount of affordability to require. One of the common challenges with inclusionary ordinances is that jurisdictions typically want to achieve deep affordability in the projects to meet their assigned housing needs for lower-income households but requiring deep levels or amounts of affordability can render projects infeasible. A best practice is to evaluate needs and market feasibility through a nexus study to determine the feasibility of inclusionary requirements such as percentage and level of affordability.

Relevant State Law

Housing Accountability Act – Government Code Section 65589.5

Permit Streamlining Act – Government Code § 65920 – 65964.1

Streamlined Ministerial Approval (SB-35) – Government Code § 65913.4

Survey Results

The city/county survey found that only 18.75 percent of responding jurisdictions find staffing capacity to be of low or slight importance while 68.75 percent of respondents find staffing capacity to be of moderate to extreme importance. It also appears that larger jurisdictions face more intense staffing needs due to the volume of applications received. Conversely, it appears that some smaller cities retain outside staffing assistance when needed.

Stakeholder Interviews

Lack of Staffing. Stakeholders indicated there is a lack of public agency staff to streamline housing applications, encourage production, or put together funding applications. This is largely a result of budget limitations in smaller cities and increasing workloads for larger jurisdictions.

Low Staff Capacity. The limited capacity of local planning agencies was identified as a major impediment to the advancement of housing production. Specific challenges include offices with no or very limited staff, recruitment, retention, and heavy workloads, which make it challenging to complete comprehensive General Plan updates and to meet State requirements for updates to specific elements.

Limited Budgets. It was also noted that many local jurisdictions do not have the budgets to hire consultants to assist with the mandated planning.