Two primary objectives of the state’s regional housing needs process are to increase the supply of housing and to ensure that local governments consider the housing needs of persons at all income levels.
The income allocation portion of the Regional Housing Needs Allocation method is designed to ensure that each jurisdiction in the Bay Area plans for housing for people of every income.
The method is based on the region-wide distribution of household income. It also considers existing concentrations of poverty within the region.
The percent of households within the Bay Area that fall within each of the state-defined income categories are:

Very-Low, 23 Percent

Up to 50 percent of Median Income

16 Percent, Low

Between 50 and 80 percent of Median Income

19 Percent, Moderate

Between 80 and 120 percent of Median Income

Once a jurisdiction’s total need is calculated, using the formula listed in the last chapter, those total units are then divided using an income allocation method, based on region-wide income distributions. To address concentrations of poverty, each jurisdiction is given 175 percent of the difference between their 2000 household income distribution and the 2000 region-wide household income distribution.

Income Allocation Formula

The first step in calculating the income distribution of a jurisdiction’s housing need allocation is to determine the difference between the regional proportion of households in an income category and the jurisdiction’s proportion for that same category. Once determined, this difference is then multiplied by 175 percent. The result becomes that jurisdiction’s “adjustment factor.”
The jurisdiction’s adjustment factor is added to the jurisdiction’s initial proportion of households in each income category. The result is the total share
of the jurisdiction’s housing unit allocation for each income category.
Using Oakland as an example: the city’s percent of household in the very low income category is 36 percent. The regional percentage in this category is
23 percent of households. The difference between
23 and 36 is -13. This is multiplied by 175 percent
(the adjustment factor) for a result of -22.75. This number is then added to Oakland’s original distribution of 36 percent, for a total share of about
13 percent.

A similar calculation for Piedmont, which has a relatively low proportion of households in the “very- low” income category, results in their adjustment factor amounting to 24. That amount is added to their proportion of households in the “very-low” income category. When added together, Piedmont’s total percent of housing units in that category then becomes 33 percent. Therefore, 33 percent of their allocation must be affordable to families with very- low income.

42 Percent, Above-Moderate

Above 120 percent of Median Income

Jurisdiction Regional Adjustment Total

City Proportion Proportion Difference Multiplier Factor Share

Oakland 36 23 -13 175% -23 13 Piedmont 9 23 14 175% 24 33

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Every city in the Bay Area has a “sphere of influence” or SOI. The SOI boundary is designated by the county’s Local Area Formation Commission (LAFCO). The LAFCO influences how government
responsibilities are divided among jurisdictions and service districts within a county.
A city’s SOI can be either contiguous with or go beyond the city’s boundary. A city is responsible for planning for all areas within its SOI. The SOI is considered the probable future city boundary.
Spheres of Influence must be considered in the regional housing needs allocation process via a “rule” in the Regional Housing Needs Allocation method, if there is projected growth within a city’s SOI. Most SOI areas within the Bay Area
are anticpated to experience growth.
The primary SOI rule for the RHNA method is that each local jurisdiction with land-use permitting authority over its SOI should plan for all the housing needed to accommodate housing growth, existing employment and employment growth within their SOI.
A 100 percent allocation of the housing need to the jurisdiction that has land use control over the area would ensure that the jurisdiction that plans
for accommodating the housing units also receives credit for any units built during the RHNA period.
There are variations in the Bay Area in terms of whether a city or county has jurisdiction over land use and development within unincorporated SOIs. In response to these variations, the following SOI rules apply:
1. In Napa, Santa Clara, Solano, and Sonoma Counties, the allocation of housing need generated by the unincorporated SOI will be assigned to the cities.
2. In Alameda and Contra Costa Counties, the allocation of housing need generated by the unincorporated SOI will be assigned to the county.

3. In Marin County, 75 percent of the allocation of housing need generated by the unincorporated SOI will be assigned to
the city; the remaining 25 percent will be assigned to the county.
These rules reflect the general approaches to SOIs in each county. Adjustments may be needed to better reflect local conditions. To allow flexibility, the methodology includes the following criteria:
1. Adjustments to SOI allocations shall be consistent with any pre-existing written agreement between the city and county that allocates such units, or
2. In the absence of a written agreement, the requested adjustment would allocate the units to the jurisdiction that has permitting authority over future development in the SOI.
Two requests for SOI allocation adjustments arose during the RHNA revision period. These requests were between the County of Santa Clara and the cities of Palo Alto and Mountain View. The final RHNA numbers, in Appendix A, reflect adjustments made to each city and to Santa Clara County.

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When transfering units, jurisdictions are required to retain some very-low and low income units. Jurisdictions also must maintain the same income distribution as initially allocated when transfering units. Both of these requirements ensure that all jurisdictions in the region provide for their “fair share” of affordable housing. Through a transfer, a city or county may not abdicate its responsibility to provide affordable units.

After the initial allocation, each local jurisdiction may request that it be allowed to transfer units with one or more willing partners. The transfer must take place in a way that maintains the total need allocation amongst all transfer parties, maintains income distribution of both retained and transferred units, and includes a package of
incentives to facilitate production of housing units.
The transfer rule allows for the transfer of housing need between willing jurisdictions in conjunction with financial and non-financial resources.
It maintains the integrity of the state’s RHNA objectives by preventing any jurisdiction from abdicating its responsibility to plan for housing across all income categories.
Request for transfer of RHNA allocations between jurisdictions must adhere to the following provisions:
1. Have at least two willing partners and the total number of units within the group requesting the transfer cannot be reduced.
2. Include units at all income levels in the same proportion as initially allocated.
3. All members of the transfer group must retain some allocation of very low and low income units.
4. The proposed transfer must include a specifically defined package of incentives and/or resources that will enable the jurisdiction(s) receiving an increased allocation to provide more housing choices than would otherwise occur absent the transfer and the accompanying incentives or resources.
5. If the transfer results in a greater concentration of very low or low income units in the receiving jurisdiction, the effect must be offset by findings by the members of the transfer group that address the RHNA objectives.
For example, the findings might include: (a) there is such an urgent need for more housing choices in those income categories that the opportunity to effect more housing choices in these categories offsets the impacts of over-concentration; or (b) the package of incentives and/or resources are
for mixed income projects; or (c) the package of incentives and/or resources are for “transitional” housing for very low or low income households

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being relocated for rehabilitation of existing very low or low income units; or (d) the package of incentives and/or resources are for additional
units that avoid displacement or “gentrification” of existing communities.
6. For the transfer of very low and low income units, there are restrictions that ensure the long- term affordability of the transferred units.

7. Transfers must comply with all other statutory constraints and be consistent with the RHNA objectives.
 

Innovative, Sustainable Micro-Infill

When in doubt about how your city may accommodate its new housing allocation, going small may be an option.

3

The County of San Mateo, in partnership with all twenty cities in the county, formed a subregion. The formation of a subregion, for the purposes of conducting the RHNA, is allowed by state law.
The San Mateo subregion designated the City/ County Association of Governments (C/CAG) as the entity responsible for coordinating and implementing the subregional RHNA process.
Upon the State’s determination of the total regional need, as required by law, ABAG assigned a share
of the regional need to the San Mateo subregion. According to the law, the subregion’s share is to
be “in a proportion consistent with the distribution of households” from 2007-2014 in Projections

2007. San Mateo’s share of units was also assigned by income category. The income distribution was determined by the regional average distribution of income.

San Mateo County’s household growth during the RHNA period, 2007-2014, is estimated at 12,184 households. Household growth in the region over the same period is estimated at 166,060. San
Mateo County’s regional share of household growth is 7.3 percent.
Applying this percent to the total regional housing need of 214,500 units gives San Mateo County a minimum subregional housing need assignment of
15,738 units, or 7.3 percent of the total regional need.

Subregion Allocation Method

The San Mateo subregion was responsible for completing its own RHNA process. Their process paralleled, but was separate from, the Bay
Area’s RHNA process. San Mateo created its own methodology, issued draft allocations, and handled the revision and appeal processes. They also issued final allocations to members of the subregion.
Although the subregion worked independently
of the regional RHNA process, ABAG is ultimately responsible for ensuring that all of the region’s housing need is allocated. Thus, if the subregion were to fail at any point in its attempt to develop a final RHNA allocation for the subregion, ABAG
would have had to complete the allocation process for the members of the subregion.

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The San Mateo subregion housing allocation method mirrored ABAG’s final method. The same factors and weights were used, as documented on page 23 of this report.
Once units were allocated, using the ABAG formula, several cities in San Mateo agreed to transfer units. Transfering cities were subjected to the same rules regarding transfers, as listed on page 37.
Final city-level allocations for the San Mateo
Subregion are listed in Appendix A.

San Mateo Subregion Allocation

Very Low 3,588

Low 2,581

Moderate 3,038

Above-Moderate 6,531

Total 15,738

1 All data in the “San Francisco Bay Area” chapter, except where noted, is from Association of Bay Area Governments, Projections 2007