The California Department of Housing and Community Development (HCD) today published California’s Housing Future 2040: The Next Regional Housing Needs Allocation (RHNA). In this report, HCD recommends to legislators the changes to the RHNA process necessary to effectively plan for the homes that will be needed across the state by 2040.

Since 1969, California has required local governments to adequately plan to meet the housing needs of everyone in their communities. HCD, in consultation with the California Department of Finance and regional planning bodies, reviews data to determine the existing and projected housing needs in each region across all income levels, or the region’s RHNA. Regional governments then allocate the housing need to local governments, who adopt housing plans—known as housing elements—to demonstrate how they will meet local housing need.

Informed by extensive stakeholder engagement, California’s Housing Future 2040 demonstrates that the RHNA process is fundamentally sound but needs to be modified to fully unlock its intended outcomes and sufficiently plan for homes now through the end of the 7th cycle in 2040. The report identifies a mix of recommendations that would require statutory changes, as well as adjustments to processes already under HCD’s administrative authority, to lay the groundwork for creating future homes.

“With half of California renters struggling to afford housing, and a record number of people experiencing homelessness, policymakers need timely and accurate data to design and implement solutions that effectively address these crises,” said Business, Consumer Services and Housing Agency Secretary Tomiquia Moss. “Through the California’s Housing Future 2040 initiative, HCD has identified actions to better capture the full extent of housing need and lay the groundwork to create future homes.”

Since 2017, the Legislature and HCD have made statutory and administrative changes that have increased the effectiveness of RHNA. Additionally, Governor Gavin Newsom has taken a series of landmark steps—including investing more than $5.2 billion in housing and increasing local government accountability—with the end goal of supporting housing development across the state. As a result of these changes, the 6th cycle of RHNA has been successful in laying the groundwork to unlock a variety of housing opportunities across California. Even with these successes, HCD continues to work to improve the RHNA process to better account for the housing needs of all existing and future Californians and ensure government partners are accountable to these goals.

“As we celebrate Fair Housing Month, it is important to remember that RHNA was created as a fair share housing strategy half a century ago, to require all California local governments to plan for housing needs at all income levels,” said HCD Director Gustavo Velasquez. “Decades later, communities across California continue to experience the persistent effects of restrictive local land use and housing policies. The recommendations so thoughtfully developed in this report will strengthen the state’s efforts to affirmatively further fair housing and finally address these lingering impacts.”

Collectively, the RHNA modifications laid out in this report would more accurately account for the housing needs of existing and future residents, promote and streamline housing development, affirmatively further fair housing, advance the state’s climate goals, and substantially address California’s housing shortage.

For more information, please visit the RHNA webpage.