General Plan Housing Elements - Why Should REALTORS® Care?

All of the cities in southern and eastern Alameda County are starting to update their housing policies - and REALTORS® need to be at the table! The following is a quick overview of the General Plan Housing Element and how it impacts the real estate profession.

The State of California requires every city to adopt a General Plan. Think of the General Plan as a business plan on steroids. It covers just about every issue that effects how a city plans for its needs. The plan covers a 10-year period. By law it must contain the following seven elements:
  • Land Use,
  • Open Space,
  • Conservation,
  • Housing,
  • Circulation,
  • Noise, and
  • Safety
While each of the General Plan elements deal with issues that impact real estate, of special interest to REALTORS is the Housing Element. The Housing Element must contain:
  • A review of the previous Housing Element;
  • An assessment of a communities housing needs;
  • A set of detailed goals, policies and programs for addressing housing needs;
  • An inventory of land that can be developed for residential uses to meet those needs; and
  • A list of constraints that could keep a community from meeting its housing needs.

While the General Plan must be updated every 10 years, the State requires Housing Element updates every five years. The update cycle for cities in the Bay Area begins whit the Association of Bay Area Governments (ABAG) preparing the Regional Housing Needs Assessment (RHNA) for each community. The RHNA uses statistics provided by the California Department of Finance and other sources to identify the number units that must be built in a community for it to meet its housing needs. The total number is further divided into the units needed for very low, low, moderate and above moderate-income households.

The “RHNA” is a critical part of the Housing Element because a community must prove that there is enough land zoned for residential construction to accommodate its “RHNA” housing needs. For instance, how does a community show in its Housing Element that it can meet the housing needs of lower income households? Here’s an example: The state regulations for preparing Housing Elements assume that lower income households will be living in apartments. Therefore, a community with lots of land zoned for high-density residential development can prove that it could meet the housing needs for these types of households. A housing element must include an inventory of sites that could be developed to meet the housing needs of various income levels.

The community doesn’t actually have to build the housing, just show that there are enough sites that such housing could be built. Naturally, this assumes that developers want to build housing and that the community supports the construction of new housing. If a community doesn’t have enough land zoned for residential development, it must include a policy statement that promises to rezone enough land to meet its needs. While the previous example focused on the needs of lower income households, the Housing Element must consider other income levels and housing tenure, too. For instance, many cities include in their Housing Elements goals and policies to increase the percentage of residents that are home owners. These policies have led to the creation and support of city-funded homeownership assistance programs. REALTORS® can use these policies to ask what communities are doing to promote homeownership.

Clearly, the Housing Element can have a major impact on real estate markets through the rezoning of land, production of new housing and support for home ownership. REALTORS® need to be involved in the update process for each city Housing Element. We have the best perspective on housing needs and need to ensure that local cities understand the importance of ownership housing.

Bay East will be actively involved in the Housing Element update process for all of the cities in Southern and Eastern Alameda County. We’ll be attending community meetings and will be sharing our perspective on any Housing Element policies that impact real estate.

Want to get involved in the update process for your city’s Housing Element? Give me a call at (925)730 4068 or send me an email at: Davids@bayeast.org and I’ll put you in touch with the city staff that are working on the Housing Element.

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