State sends Chico back to the drawing board – again Revisions underway on City's eight-year housing plan

by Natalie Hanson
posted June 21

Chico city officials say that after nearly a year, the City’s plan for building new housing under state law — the Housing Element — could be approved this summer. But the process is already far behind schedule, as the state just slapped the latest draft with demands for more revisions for the second time in one year.

The City’s Housing Element has been under scrutiny since almost a year ago when it went before the public and City Council in August. A Housing Element, required of each city in California, must cover the eight-year period from 2022 to June 2030 to ensure that the City complies with state legislation, creating a comprehensive strategy to promote safe, decent and affordable housing. It assesses current and projected housing needs, constraints to housing production, and resources. It then establishes housing goals, policies and actions to meet housing needs over the Housing Element planning period.

The state Housing and Community Development (HCD) rejected the City’s original Element draft earlier this year, requiring revisions.

“Once HCD completes the review of the current version and finds it acceptable, it will be presented to the City Council for adoption,” City Housing Manager Marie Demers said. “We anticipate this will happen sometime this summer.”

There will be some changes to the city code in building requirements, Demers said. HCD said that the Housing Element draft was missing analysis of income concentrations throughout the City, including data on neighborhood conditions, that might show areas of high segregation and poverty.

HCD also wanted an analysis of household demographics, including comparisons between different areas and data on patterns in income concentrations.

The draft Element indicated that 154 units affordable to low-income households have been built, are under construction, or have been approved, but provides no information documenting how the affordability of the units was determined. The City must also fix this issue.

An April 13 letter from Legal Services of Northern California encouraged the City to more quickly develop a public community garden or farmers’ market in an area where lower-income housing is located.

LSNC requested the City identify projects and funding intended for use on public facility and infrastructure projects located in areas of high segregation and poverty.

The City reported that public commenters this spring asked whether there have been enough opportunities for public input on the Housing Element. City Manager Mark Sorensen responded that City staff and consultants reviewed the public comment process and decided internally that it followed state law.

Chico’s draft Housing Element notes a dire need for more affordable housing. The City has a very low vacancy rate for rental units in general, that from 2018 through 2021, is never higher than 3.3%. That rate is 0% at complexes operating as affordable housing. The rate considered “normal” statewide is 5%.

Meanwhile, the median home price in Chico rose from $343,600 to $380,000 from 2018 to 2019, and further increased to $410,000 in 2020.

About one in four Chico renters earn less than $20,000 per year and more than one-third of Chico renters spend more than half their income on housing costs. And the newest Point in Time survey found there were 925 unhoused people in Chico out of 1,237 in Butte County.

Demers said there are 1,411 affordable multifamily homes in the City’s pipeline. The City also released a statement saying 948 affordable homes will be done by the end of the year.

Despite this progress, the City is scrambling to revise the Housing Element for a third time as HCD has again demanded more revisions. In a June 7 email to this reporter, Community Development Director Brendan Vieg said the City and City Council had not been told the new draft had been rejected.

But Demers clarified, writing, “We are responding to a few clarifications requested by HCD and will share those revisions with the public and HCD as soon as we complete them.”

And today Demers said City staffers hope to get the revised Element back to HCD about June 26. “We hope to bring it to Council in August, but can’t confirm until we hear from HCD, hopefully by mid-July,” she added.

City Councilmember Addison Winslow, who has made affordable housing a central part of his platform, commented on the Housing Element process. Winslow recently said the City has not yet provided councilmembers with the new feedback from HCD, but the comments from the state have always been to do with meeting fair housing requirements.

He said the last draft’s revisions were only sent to him via email, and he thinks it is inappropriate that much of the process has been under wraps.

On the one hand, he said the recent City Council decision to consider a “pro-housing” designation after completion of the Housing Element is positive. That designation is related to an incentive-based program for cities that demonstrate dedication to increasing equitable housing stock, providing access to funding for housing credits.

However, he said, “We haven’t really had a discussion on the Council on, ‘Should we do this, or do something else?’”

“I feel like somebody needs to be called in on this whole process,” Winslow added. “We have a state agency exercising oversight on the local gov under state laws which are new and fresh, being interpreted by the moment. It’s sensitive, so it should be acutely overseen by the public.”

Councilmember Tom van Overbeek, a developer, and others on the Council did not respond to a request for comment.

Lawsuits have been filed by nonprofit organizations as well as the administration of Gov. Gavin Newsom against some cities — like Huntington Beach — over Housing Elements that don’t comply with new state laws.

The governor has also launched a Housing Accountability Unit to increase enforcement and oversight over housing in cities that oppose the state’s new measures to increase density and affordability or fail to act quickly.

Winslow said he does not think the City is in a vulnerable position legally as it has not displayed the kinds of “egregious” errors in its Housing Element that appear to have been made by Huntington Beach. But he hopes the City Council will have a state-approved Housing Element presented by Aug. 1, to make its fast-approaching deadline.

The current version of the Housing Element can be accessed on the City’s website.

Natalie Hanson is a contributing writer to ChicoSol.