As California continues to grapple with its persistent housing shortage, leading scholars and experts are urging the state legislature to take decisive action in reforming the housing element review process.
A group of University of California professors specializing in land use and housing law led by UC Davis Law Professor Chris Elemendof recently penned a letter to California State Auditor Grant Parks, outlining structural flaws in the Housing Element Law that contribute to the state’s failure to meet its housing targets.
At the heart of the problem, they argue, is a regulatory framework that allows local governments to sidestep their responsibilities, a lack of meaningful oversight from the Department of Housing and Community Development (HCD), and the absence of real consequences for cities that underperform in housing production.
Their letter follows concerns raised by State Senator Steve Glazer, who requested an audit of HCD’s housing element review process. Glazer pointed to “lengthened review timelines,” “inconsistent feedback,” and “unclear requirements” as major obstacles slowing housing development.
The letter from UC scholars identifies three primary weaknesses in California’s Housing Element Law:
- HCD’s Limited Authority
One of the fundamental issues with California’s housing framework is the lack of regulatory power granted to the Department of Housing and Community Development. While HCD is responsible for reviewing cities’ housing plans, its guidelines are only advisory under Gov’t Code § 65585(a).
The scholars argue that HCD’s inability to set binding rules for what constitutes an adequate housing element has led to cities submitting plans that meet legal technicalities but fail to deliver real housing. The lack of enforcement authority means local governments face little pressure to comply with the state’s ambitious housing goals.
- The “Good Sites” Assumption
California law assumes that cities will meet their Regional Housing Needs Allocation (RHNA) by identifying specific sites for housing development. Gov’t Code § 65583.2 requires cities to demonstrate the availability and feasibility of housing sites, but in practice, cities have routinely included sites that are unlikely to be developed during the planning period.
A study co-authored by two of the letter’s signatories found that during the last planning cycle, fewer than 1 in 10 designated housing sites in Bay Area cities were actually developed. At the same time, more than 70% of new housing was built on sites that were not even included in city housing elements.
This discrepancy suggests that cities are gaming the system by assigning housing allocations to sites they know will not be developed, effectively avoiding rezoning efforts that would allow for more dense housing.
- Minimal Consequences for Cities That Fail to Meet Housing Targets
Historically, California’s Housing Element Law lacked any meaningful penalties for cities that failed to meet housing targets. While recent legislation—SB 35 (2017) and SB 423 (2023)—has introduced some measures to streamline housing development, these policies apply only to a limited set of projects.
The letter highlights how even under these new rules, only high-cost, complex developments—those that pay prevailing wages and set aside a share of units as affordable housing—qualify for streamlined approval. This limits the law’s effectiveness and does little to hold cities accountable for underperformance.
Furthermore, failing to meet housing targets does not impact a city’s authority to impose restrictive zoning laws, demand excessive impact fees, or apply burdensome design standards. Nor does poor performance affect a city’s eligibility for state funding.
In response to these systemic problems, the scholars propose a series of legislative reforms to strengthen oversight and enforcement:
- Grant HCD Standard-Setting Authority
To address HCD’s lack of regulatory power, the scholars urge the California Legislature to authorize HCD to issue binding “standards, forms, and definitions” for what constitutes an adequate housing element.
This reform would allow HCD to establish clear benchmarks and eliminate the “guessing game” that cities currently play when submitting housing plans.
- Require Cities to Account for Sites’ Probability of Development
The scholars also propose a major overhaul of how housing capacity is calculated. Instead of assuming that all designated sites will be developed, cities should be required to account for the actual likelihood of a site being developed during the planning period.
Under this approach, the total housing capacity of a city’s housing element would be calculated as:
- (Probability of development per site) x (Net gain in housing units per site).
Cities like San Francisco have already adopted a similar approach, incorporating realistic development probabilities into their housing plans. By implementing a standardized model—such as one developed in collaboration with the UC Berkeley Terner Center or the UCLA Lewis Center—California could ensure that housing elements reflect real-world development patterns rather than political maneuvering.
- Impose Fiscal and Regulatory Sanctions for Poor Performance
To create real incentives for compliance, the scholars advocate for automatic fiscal and regulatory penalties for cities that fail to meet housing targets. Possible consequences include:
- Mandatory upzoning for cities that fail to build their fair share of housing.
- Reduction in impact fees to lower development costs.
- Benchmarking housing production against peer jurisdictions to create a competitive accountability system.
The state of Oregon is already developing a peer-benchmarking model to compare cities’ housing production while controlling for factors beyond local control, such as interest rates and construction costs.
California could adopt a similar approach to ensure that housing targets are fair but also enforceable.
Some cities have pushed back against California’s Regional Housing Needs Allocation (RHNA), arguing that requiring 40% of new housing to be deed-restricted affordable units is unrealistic given limited funding.
The scholars suggest a compromise: granting partial credit toward lower-income RHNA targets for exceeding market-rate housing goals. This would acknowledge that new market-rate housing helps free up existing lower-cost units, a phenomenon known as the “chain-of-moves” effect.
Recent California state laws (SB 1123 and AB 1893) already recognize this principle, and a formalized “RHNA credit system” could incentivize cities to permit both affordable and market-rate housing.
California’s housing crisis is not simply a result of market forces, but a product of local resistance, weak state oversight, and ineffective planning laws, the scholars argue. The UC scholars’ letter underscores how loopholes in the Housing Element Law have allowed cities to evade their housing responsibilities while facing little to no consequences.
To fix this, they call on the California Legislature to grant HCD more regulatory power, force cities to use realistic development projections, and impose real penalties for noncompliance.
With the state facing an acute housing affordability crisis, these reforms could be the key to ensuring that local governments do their part to address the urgent need for housing in California.
As Chris Elmendorf, a UC Davis law professor, summarized in a tweet, “The Leg should: give HCD standard-setting authority, require cities to adjust ‘capacity’ claims by sites’ probability of development, and benchmark cities’ housing production against peer jurisdictions, with builder’s remedy for the worst performers.”
Who are these “scholars” – other than Elmendorf? And are they submitting on behalf of themselves, or do they claim to be representing the university?
Either way, this seems like a reason to support Trump’s UC budget cuts.
But I didn’t realize that there weren’t many consequences for ignoring the state’s “mandates”.
Seems to me that if the state were to actually implement these suggestions, it might be more efficient if the state just completely took over the planning process for each and every city. (Which should also result in the state taking responsibility for the outcome.)
From article: “The scholars suggest a compromise: granting partial credit toward lower-income RHNA targets for exceeding market-rate housing goals. This would acknowledge that new market-rate housing helps free up existing lower-cost units, a phenomenon known as the “chain-of-moves” effect.”
“Recent California state laws (SB 1123 and AB 1893) already recognize this principle, and a formalized “RHNA credit system” could incentivize cities to permit both affordable and market-rate housing.”
(Wow – this really lays bare the motivation – to build market-rate housing.)
Says both affordable and market rate, not just market rate.
Seems like you didn’t read it. Here’s the key phrase:
” . . . granting partial credit toward lower-income RHNA targets for exceeding market-rate housing goals.”
What that means is REDUCING the lower-income targets, if market rate targets are exceeded.
“This would acknowledge that new market-rate housing helps free up existing lower-cost units, a phenomenon known as the “chain-of-moves” effect.””
So again, the low-income housing requirements would be reduced, and replaced by a hoped-for “trickle down” effect.
Again, laying bare what’s actually being proposed here.
You’re the one arguing stuff isn’t get built, people are trying to get stuff built, and then you complain about their efforts without offering anything other than, there’s nothing to see here, no housing crisis. Remember, the state is asking for 40 percent affordable by their numbers, which isn’t going to happen, so allowing a partial offset is a way to put the numbers more in line with reality. You’re so opposed to housing, you’re inventing conspiracies.
You’re attributing things to me which I never said, and are twisting what I have said.
But this isn’t about me, anyway. I’m just pointing out facts, here. And this proposal would result in a REDUCTION of required Affordable housing. That’s not even in dispute, here.
“this proposal would result in a REDUCTION of required Affordable housing. ”
“reduction of required…” What he’s arguing is that while that might be true, it might also increase the actual amount of affordable housing that’s built. That doesn’t mean he’s right and doesn’t mean that’s the right approach, but that’s the argument being made here.
So I can see a situation in which Village Farms, for example, results in the city receiving “partial credit” (a reduction) for Affordable housing that would otherwise be “required”.
That’s a possibility. It might also mean that less overall units have to be built in order to reach 920 affordable units. Again, it’s an idea that’s throwing out, I’m not saying it’s the right solution.
I don’t see how “less overall units” would lead to 920 “Affordable” units under this proposal.
I’m not sure if you’re purposefully misunderstanding this, but this type of proposal would result in more market-rate housing, and less Affordable housing. In other words, fewer than 920 Affordable units required in your example.
And more market-rate housing than is actually called for in a given housing element.
Also, the builder’s remedy itself only requires 20% Affordable units as I recall, and the 40% “requirement” in some housing elements is not all at one “level” of Affordability. There’s subcategories in that 40%.
Could it be that the entire effort is both flawed AND doomed to failure?
Let me throw these numbers out there… 920 is the number of affordable units Davis is required to build. If we assume 20% affordable, that means it would take about 4600 market rate units to get to 920. 20 percent is probably higher than realistic, although that is what Village is suggesting. If you create a system that offers reduction, the top line goes down. THat’s one thought.
Davis isn’t “required” to build any units.
But using your example, you’re stating that this type of proposal would “need” 4,600 market rate units in order to allow for the creation of 920 Affordable units, if the Affordable percentage requirement was reduced.
Whereas under the current system (40%), it would only take half of that number of market rate units (2,300) to accomplish the same thing.
In other words, a doubling of the amount of market-rate units compared to the current system.
Not sure what you’re saying here. What I’m saying is that in order to get to 920, you have to exceed the 2100 market rate units – I’ve pointed this problem out in pieces a number of times.
I have no idea what you’re saying, either.
You’re also introducing a different number at this point (2,100).
Bottom line seems to be that you and Elmendorf support weakening the Affordable percentage requirements.
I’m not making an argument either way on Elmendorf’s proposal.
O.K., but getting back to Elmendorf’s proposal, he’s supporting FEWER required Affordable units as a result of allowing more market-rate housing.
This is a straight-out reduction in the TOTAL number of Affordable units “required” in housing elements. This isn’t even in question.
And he’s justifying that via a trickle-down theory.
We’re going in circles now. I’d rather here from other people at this point.