On July 25, 2023, the Cupertino City Council received an update on the 6th Cycle Housing Element, 2023-2031. The Housing Element (HE) is one of 8 required elements of every California city or town’s General Plan. Whereas, the General Plan is a kind of long-term roadmap for all kinds of development in a jurisdiction, the Housing Element is the roadmap strictly for housing development, and it is revised and updated multiple times within a single General Plan cycle.
Possible Revisions to the Submitted Housing Element that Might Incline HCD to Approve It
The California Department of Housing and Community Development (HCD) reviews the HE for compliance with current State laws and conducts its own analysis as to whether each jurisdiction has identified sufficient suitable new housing locations. As Cupertino learned from HCD’s comments to the HE Cupertino submitted in February 2023, certain revisions to the draft HE submission may increase the likelihood that HCD would view the HE favorably and grant approval. Hints included:
- Rely less on pipeline (approved but not constructed) projects to satisfy to RHNA obligations
- Choose sites that allow for maximum housing density due to the passage of recent State laws, for example 2022 AB 2011 “Affordable Housing and High Road Jobs Act of 2022” and recent revisions affecting 2006 AB 32/2008 SB 375 (both focused on reducing greenhouse gas emissions)
- Lean into redevelopment of developed sites that are between 0.5 and 10 acres
According to Cupertino Assistant Director of Community Development Luke Connolly, most of Cupertino is recognized by the State as an area of “Highest Resource with Access to Opportunity” because of its proximity to high paying jobs and high performing public schools. As a high opportunity community, the State assigns the City a greater share of the region’s housing development obligation than communities perceived to offer less economic and educational opportunity.
For the 2023-2031 HE Cycle, Cupertino is required to identify 4,588 potential housing locations to accommodate its Regional Housing Need Allocation (RHNA) assignment. Additionally, 2017 SB 166 “No Net Loss” law mandates that jurisdictions must maintain adequate site inventory to accommodate their remaining unmet RHNA by each income category (very low, low, moderate, market rate) at all times. HCD recommends that each city allocate a “RHNA buffer” of an additional 25-30% of the total RHNA obligation, especially for homes for people with low or moderate incomes to ensure that the City would not be required to update its site inventory before the next HE cycle commences.
Cupertino, then, is expected to identify sites for the construction of 5,735 – 5,964 new homes (4,588 RHNA + 25-30% buffer). This equates to approximately 30% of its entire existing housing inventory, to be identified by 2024 and constructed within 8 years.
To note, the World Population Review reports Cupertino has a 2023 population of 55,326, a decline rate of -2.85% annually and -8.31% since the most recent census (60,343 in 2020).
Challenges with Cupertino’s Housing Requirements
Like most high opportunity communities in the region, Cupertino is challenged to identify so many housing sites where most lots are already developed. What sites are vacant/available, close to transit (within 0.5 mile of a bus stop), and sized between 0.5 and 10 acres?
HCD’s comments from the 7/25/2023 Council meeting point to opening up all eligible retail and commercial locations as sites for future housing. Cupertino’s current and dwindling retail and commercial corridors will most likely become candidate sites: Homestead Rd, Stevens Creek Blvd, De Anza Blvd, and to a lesser extent Foothill Blvd, Bubb Rd, Stelling Rd, and Bollinger Rd.
Current retail & commercial along Stevens Creek Boulevard in Cupertino
Cupertino must add 2,635 homes for individuals and families with very low, low, and moderate incomes. However, while the political pressure shifts to cities to approve more housing development, the State and federal government have removed themselves as providers and administrators for most affordable housing. Is it reasonable to expect that the private sector will build and maintain affordable housing, which is not lucrative, when current density bonus laws require developers set aside no more than 10-20% of new multi-family dwellings for people with incomes <50-120% of the area median?
Under current development provisions, would Cupertino need to approve between 13,175 – 26,350 new homes to assure the construction of the 2,635 below market rate homes necessary for the community and to satisfy HCD’s requirements? What if a private property owner were to accept a housing entitlement, but then decide not to build? How does Cupertino satisfy its RHNA requirements when owners of entitled properties decide not to build, or decide to build later?
There is Another Way
Cities are often frustrated when they rely on the private sector and non-profit organizations to build and maintain a public good. Some cities are turning to land banks and community land trusts to meet the RHNA requirements to build the homes that people need today.
The National Housing Policy Guide describes land banks and community land trusts:
Land Banks
“Land banks are created by local jurisdictions – usually as a public entity but occasionally as an independent nonprofit –to hold abandoned, vacant, and tax-delinquent properties for future development. Not only does this provide local jurisdictions with land for future development, it also reduces the number of “problem properties” in a community by creating a process for management and disposition. Land banks are a powerful tool for jurisdictions faced with problems from both the hot and cold ends of the housing market spectrum. In hot markets, land banks allow jurisdictions to make development decisions with less concern about the cost of land because they already have a portfolio of parcels ready for development. In cold markets, land banks reduce blight by acquiring abandoned and/or delinquent properties, clearing title, and then putting the properties back into productive use….”
Community Land Trusts
“Community land trusts (CLTs) are organizations that own land and develop it through an inclusive, community-based process. CLTs develop land according to the community’s needs, which can include anything from open space to a multifamily rental project. Most often, however, CLTs are created to provide affordable homeownership opportunities to low- and moderate-income households. The United States has around 200 community land trusts, and the model has become popular in the UK, as well.
The CLT model is structured around a ground lease. The CLT owns land which is leased to households who purchase the homes that sit on CLT land. Removing the cost of land from the cost of purchasing the home provides a significant subsidy to the households. The ground lease limits the price at which the home can be resold, passing the subsidy on from one homeowner to the next. CLTs also often retain the right to repurchase the home in the case of foreclosure. CLTs are one form of shared equity homeownership.”
Should Cupertino wait on for-profit developers, property owners, and investors to decide what and when to build, when the community needs safe, sustainable, and affordable housing today? Why not support local funding for the development of a Cupertino land bank for the specific purpose of public investment and retention of residential land for the sole purpose of providing long-term affordable for rent and for sale homes for people who need them?
What’s Next
Next steps for Cupertino’s HE include the publication of a revised Draft HE and public outreach for possible zoning changes. Sign-up to receive Housing Element updates from the City of Cupertino here: https://www.cupertino.org/our-city/departments/community-development/housing/housing-element
Note*: The 5 Santa Clara County cities with higher RHNA numbers than Cupertino also report declining populations since 2020:
Milpitas, 2023-2031 RHNA 6,713 new homes, has a 2023 population of 76,535, a decline rate of -1.61% annually and -4.76% since the most recent census (80,363 in 2020).
Mountain View, 2023-2031 RHNA 11,135 new homes, has a 2023 population of 79,670, a decline rate of -1.14% annually and -3.38% since the most recent census (82,455 in 2020).
Palo Alto, 2023-2031 RHNA 6,086 new homes, has a 2023 population of 63,210, a decline rate of -2.64% annually and -7.7% since the most recent census (68,486 in 2020).
San Jose, 2023-2031 RHNA 62,200 new homes, has a 2023 population of 930,862, a decline rate of -2.71% annually and -7.92% since the most recent census (1,010,908 in 2020).
Sunnyvale, 2023-2031 RHNA 11,966 new homes, has a 2023 population of 145,302, a decline rate of -2.31% annually and -6.77% since the most recent census (155,860 in 2020).
References
City of Cupertino. Video Recording of the 7/25/2023 Special Meeting of Council, Agenda Item 1: Study Session and Staff Presentation on the 6th Cycle Housing Element Update: https://cupertino.granicus.com/MediaPlayer.php?view_id=18&clip_id=3271. Accessed August 25, 2023.
City of Cupertino. Slides, Staff Presentation on the 6th Cycle Housing Element Update, 7/25/2023: https://cupertino.legistar.com/gateway.aspx?M=F&ID=ca20968a-4c57-4836-8958-19d88309d090.pdf. Accessed August 25, 2023.
City of Cupertino. Cupertino General Plan: Community Vision 2015-2040: https://www.cupertino.org/our-city/departments/community-development/planning/general-plan. Accessed August 25, 2023.
World Population Review, Cupertino, CA: https://worldpopulationreview.com/us-cities/cupertino-ca-population. Accessed August 25, 2023.
California Legislative Information. 2017 SB 166, “Residential density and affordability”: https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180SB166. Accessed August 25, 2023.
California Legislative Information. 2022 AB 2011, “Affordable Housing and High Road Jobs Act of 2022”: https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220AB2011. Accessed August 25, 2023.
Institute for Local Government. 2022 AB 32/SB 375, “Understanding AB 32 and SB 375: A Legal Analysis for Local Government Officials”: https://www.ca-ilg.org/sites/main/files/file-attachments/resources__Sept_8_AB32-SB375_Webinar_Slides.pdf?1442270849. Accessed August 25, 2023.
California Legislative Information. 2006 AB 32, Amended 2022, “Energy: general plan: building decarbonization requirements”: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202120220SB32. Accessed August 25, 2023.
California Legislative Information. 2008 SB 375, “Transportation planning: travel demand models: sustainable communities strategy: environmental review”: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=200720080SB375. Accessed August 25, 2023.
United States Census. “Urban vs Rural”: https://www.census.gov/programs-surveys/geography/guidance/geo-areas/urban-rural.html. Accessed August 25, 2023.
National Housing Conference. Land Banks and Community Land Trusts: https://nhc.org/policy-guide/land-based-solutions/land-banks-and-community-land-trusts/. Accessed August 25, 2023.