Regional Housing Needs Allocation (RHNA)

The RHNA process refers to the first two steps (Determination and Allocation) of a multi-step process that California governments utilize to plan for housing needs in each region of the state.

Since 1969, California has required that all local governments (cities and counties) adequately plan to meet the housing needs of everyone in the community. This process starts with the state determining how much housing at a variety of affordability levels is needed for each region in the state, and then regional governments developing a methodology to allocate that housing need to local governments. California’s local governments then adopt housing plans (called housing elements) as part of their “general plan” (also required by the state) to show how the jurisdiction will meet local housing needs.

"Current Housing Planning Process"

Determination: Calculating the Housing Need in Each Region

HCD is responsible for determining the regional housing need for each region’s planning body known as a “council of governments” (COG), with input from the Department of Finance (DOF). HCD and the COG consult and compare data related to demographic trends and housing conditions in the region. After this consultation, HCD issues the final regional housing need number for the region, which is broken out by income categories. The final housing need determination must be issued at least two years before the next Housing Element due date.

The determination is required to account for both the existing and projected housing need in each region. Accordingly, in addition to considering DOF data on future population and household growth, HCD also assesses whether additional housing is needed to serve the existing population. For instance, HCD considers data on overcrowding, cost burden, vacancy rates, and jobs-housing imbalances when determining the regional housing need. HCD is also required to consider whether units have recently been lost due to a state of emergency declared by the Governor.

Allocation: Distributing the Need to Cities and Counties

Once HCD has issued the region’s housing need determination figure (the amount of housing that must be planned for), the COG is responsible for allocating the housing need amongst all of the jurisdictions (cities/counties) within that region. The COG must develop a methodology for allocating the regional housing need and submit the methodology to HCD for review. After the methodology is adopted by the COG, they must develop a Regional Housing Need Allocation Plan (RHNA Plan). The RHNA Plan must be adopted by the COG at least one year before the next Housing Element due date. Learn more: Building Blocks: A Comprehensive Housing-Element Guide.

Statute requires that the COG develop a RHNA allocation methodology that furthers five statutory objectives (Gov. Code Section 65584(d)). Overall, the statutory objectives encourage the development of a RHNA allocation plan that promotes more economically and racially integrated communities by allocating housing to high-resource, job-rich areas, while also meeting the state’s greenhouse gas reduction goals by encouraging infill development and the protection of environmental resources. Statute also lays out 13 factors that COGs are allowed to consider when creating the allocation methodology, as well as three criteria that cannot be considered. HCD is charged with developing the RHNA Plan for 20 predominantly rural counties across the state that do not have a COG.

California’s Housing Future 2040: The Next Regional Housing Needs Allocation

AB 101 (2019) directs HCD, in collaboration with OPR and after engaging in stakeholder participation, to develop recommendations related to the RHNA process and methodology. Upon completion of this California's Housing Future 2040 stakeholder engagement initiative, HCD will compile its findings and recommendations, and will submit a report to the Legislature by December 31, 2023.

HCD plans to conduct this stakeholder engagement initiative in the Spring of 2023, which will consist of several opportunities for stakeholder input. HCD is undertaking the CA’s Housing Future 2040 initiative centering the following guiding principles:

  • Ensure RHNA is a fair, transparent, objective, and streamlined process for identifying housing need.
    • Fair in terms of advancing equity, racial justice and inclusion, and environmental justice in a manner that ensures all jurisdictions plan for their fair share of the region’s housing need.
    • Transparent in terms of open and accessible public participation, proactive engagement, and making materials available online.
    • Objective in terms of maintaining a data-driven process.
    • Streamlined in terms of ensuring a logical flow of steps with the most efficient process available to accomplish meaningful outcomes.
  • Strategically plan for the needs of households of all income levels while promoting infill development, the protection of natural resources, and efficient development patterns.
  • Account for future climate risk with the goal of ensuring communities and vulnerable populations are not unduly exposed to climate risks, including but not limited to drought, flooding, sea level rise, and wildfire.
  • Encourage increased development to substantially address California’s housing shortage and affordability issues.
  • Improve compliance and outcomes through incentives and enforcement.
  • Enhance and protect RHNA’s role in Affirmatively Furthering Fair Housing so that all cities plan for their fair share of growth and future planning does not further entrench segregated living patterns.

Below you will find information on upcoming stakeholder engagement events and materials created during this CA’s Housing Future 2040: The Next RHNA initiative. This webpage will be updated as more information becomes available.

Kick-Off Webinar

HCD held a virtual kick-off webinar on Thursday March 9, 2023, giving an overview of the CA’s Housing Future 2040: The Next RHNA initiative and the ways in which the public can engage with CA’s Housing Future 2040. The webinar covered how the current RHNA process works, the scope of CA’s Housing Future 2040, and the topics where HCD is looking for input.

Survey

In order to inform HCD’s recommendations for improving the RHNA process and methodology, HCD is conducted a public survey, alongside other engagement strategies, to receive input and ideas from stakeholders. The survey closed on Friday, May 12, 2023, and HCD staff are now summarizing and analyzing the survey responses. HCD will utilize the survey responses to inform HCD’s recommendations for improving the RHNA process and methodology but will not respond to each survey response.

Sounding Board

HCD is convening a Sounding Board of approximately 30 stakeholders as part of the California’s Housing Future 2040 stakeholder engagement initiative. This Sounding Board will be focused on a series of specific, technical questions where HCD is looking for targeted ideas or feedback to consider when drafting the recommendation report; the Sounding Board will not be a decision-making body. The Sounding Board will be one of the mechanisms for providing feedback on California’s Housing Future 2040: The Next RHNA. All stakeholders will have opportunities to provide feedback throughout the process: 1) Responding to the Survey mentioned above, 2) Providing comments on the topics covered in the Sounding Board meetings, see below, and 3) Providing comments anytime throughout the process to the main email box CAHousingFuture2040@hcd.ca.gov (note HCD appreciates comments by September 15, 2023).

Public Comments

HCD will post Sounding Board agendas on its website one week in advance of Sounding Board meetings. These meetings will not be open to the public, but the public is welcome to submit written public comments regarding the meeting agenda items with the subject line “Sounding Board agenda comment” to CAHousingFuture2040@hcd.ca.gov . HCD recommends that comments be submitted at least 24 hours in advance of meetings, but HCD will continue to consider public comments submitted after the meeting. HCD will review and consider all public comments that are submitted and may share submitted public comments with Sounding Board attendees.

Sounding Board Meeting Agendas & Materials

  Date Topics Materials
Meeting #1 Wednesday May 3, 2023 Kick-off & Regional Housing Needs Determination (RHND)-related Questions: Homelessness, Cost Burden, Jobs/Housing, and Comparable Regions
Meeting #2 Monday May 15, 2023 Affirmatively Furthering Fair Housing (AFFH) & Furthering Statutory Objectives of RHNA
Meeting #3 Wednesday May 31, 2023 Housing + Transportation Planning Alignment & Climate Change
Meeting #4 Monday June 5, 2023 Process Improvements & Overflow from Previous Meetings

Sounding Board Invitees

  • Academic Representatives
    • Ben Metcalf – Terner Center for Housing Innovation at the University of California at Berkeley
    • Chris Elmendorf – Professor of Law at the UC Davis School of Law
    • Dowell Myers – Professor of Policy, Planning, and Demography at the USC Sol School of Public Policy
    • Paavo Monkkonen – Professor of Urban Planning and Public Policy at the UCLA Luskin School of Public Affairs
  • American Planning Association California Chapter (APA California)
  • Assembly Housing Committee
  • Association of Bay Area Governments (ABAG)
  • California Air Resources Board (CARB)
  • California Association of Councils of Governments (CALCOG)
  • California Building Industry Association (CBIA)
  • California Business, Consumer Services, and Housing Agency (BCSH)
  • California Rural Legal Assistance Foundation (CRLAF)
  • California YIMBY
  • Center for Continuing Study of the California Economy (CCSCE)
  • Demographic Research Unit of the California Department of Finance (DOF)
  • Fresno Council of Governments
  • Governor's Office of Planning and Research (OPR)
  • Kennedy Commission
  • Leadership Counsel for Justice and Accountability
  • League of California Cities (Cal Cities)
  • Merced County Association of Governments (MCAG)
  • Public Advocates
  • Public Interest Law Project (PILP)
  • Rural County Representatives of California (RCRC)
  • Sacramento Area Council of Governments (SACOG)
  • San Diego Association of Governments (SANDAG)
  • Senate Housing Committee
  • Southern California Association of Governments (SCAG)
  • Urban Counties of California
  • YIMBY Law

The amount of housing each region must plan to accommodate. 

Other regions not covered above (6th Cycle)

The amount of housing each region must plan to accommodate.

Other regions not covered above (5th Cycle): 2014-2019

HCD values the findings of the California State Auditor’s report on the Regional Housing Needs Assessment (RHNA) process, which found HCD’s needs assessment methodology to be sound. The auditor also identified opportunities for HCD to further promote fairness, accuracy, and transparency in the RHNA. In response to the auditor’s findings, HCD committed to undertaking the following in a timely and comprehensive manner:

  • Improve review documentation and create procedures to further ensure data errors are eliminated.
  • Conduct research and public outreach to determine an equitable, fair, and transparent jobs/housing adjustment factor.
  • Ensure data on units lost during state of emergency is provided, verified, and applied in each determination.
  • Conduct research and public outreach to perform a formal analysis of healthy vacancy rates and historical trends to inform adjustments using the vacancy rate factor.
  • Ensure HCD’s RHNA determination letters describe, in detail, all factors required by GC 65584.01.

HCD has acted quickly to implement the auditor’s recommendations. HCD also committed to undertaking a variety of tasks associated with each recommendation, some of which have been completed and some of which are still in progress. These tasks are summarized below.

Recommendation 1 (QA/QC Data Review): To ensure that its needs assessments are accurate and do not contain unnecessary errors, by June 2022 HCD should institute a process to ensure its staff perform multiple reviews of data included in its assessments, including data that staff input and councils of governments submit.

  • Create checklist which documents the data submitted by the COG, prompts staff to confirm the accuracy of the data submitted, and documents how factors were considered.
  • Include data verification and confirmation checks in the RHNA data workbook.
  • Ensure multiple levels of review, from staff to management, of data inputs and review checklist to ensure completion of checklist and review materials.
  • Consider implementing new data gathering methods, such as utilizing application programming interfaces (API’s) which can reduce errors caused by copy/paste or other manual collection methods.

Recommendation 2 (Jobs Housing Factor and Units Lost): To demonstrate that its needs assessments are complete and address all relevant factors, by September 2022 HCD should establish a formal process to document its consideration of all factors required by state law in its needs assessments.

  • HCD will convene a public process to discuss and identify jobs-housing balance data sources, methodology, and recommended targets. This process shall include a panel of experts with relevant expertise in the field of jobs-housing imbalance, planning, and/or best practices, all as determined, identified, and selected by HCD.
  • To the extent HCD adopts a jobs-housing balance methodology and recommended targets, HCD will apply such targets or methodology to future determinations. HCD shall use reasonable and good faith efforts to ensure that any methodologies deployed are transparent and uniformly applied.
  • If and to the extent necessary and appropriate data is available and reliable, as determined by HCD, HCD will make written determinations on whether each region has a current and/or projected imbalance between jobs and housing.
  • If not provided, HCD will request employment projections from the COG to consider using in any jobs/housing adjustment factor.
  • If not provided, HCD will request that data from the COG related to units lost during a state of emergency be submitted to HCD. HCD will work with Department of Finance and other agencies to verify data submitted by the COG contains a complete accounting of all units lost during the state of emergency and will incorporate the adjustment factor into all determinations in a transparent and equitable manner.
  • To the extent HCD adopts a jobs-housing balance data source, methodology, and recommended targets, HCD will formally incorporate such jobs/housing methodology and recommended targets, along with explanatory notes regarding the same into the Regional Housing Need Determination letter template to be transmitted to the regional councils of government.

Recommendation 3 (Vacancy Rate): To ensure that it adequately supports the vacancy rate adjustments it makes to needs assessments, by February 2023 HCD should perform a formal analysis of healthy vacancy rates and historical trends to inform those adjustments.

  • HCD will conduct research into the academic or industry studies published regarding historical and current vacancy rates, and how they may be used to calculate an accurate vacancy rate to use for the RHNA. If such research is out-of-date or not available, HCD may consider commissioning a study on the topic.
  • HCD will consult with a panel of experts regarding the academic or industry studies available and determine how to best use the relevant information available to form a target adjustment factor to use in the RHNA.
  • HCD will consider both owner and renter vacancy rates going forward and may apply different targets for each based on the conclusions from the research and panel recommendations.

Recommendation 4 (Comparable Region Analysis): To ensure that it does not reduce its needs assessments based on inappropriate information provided by councils of governments, by June 2022 HCD should develop a formal process to review the appropriateness of councils of governments' proposed comparable regions, including identifying the criteria it will consider when reviewing councils of governments proposals. HCD should use this formal process and criteria to consistently evaluate the appropriateness of the proposals to ensure that they identify regions with healthy housing markets.

  • HCD will establish a formal set of criteria and factors that COGs may include in their comparable region analysis.
  • In considering acceptable factors, HCD will exclude factors that are either identical to or highly correlated with overcrowding and housing cost burden.
  • In establishing formal criteria and factors for comparable region analysis, HCD may consult with a panel of experts to get input on what factors are acceptable as measures of comparability but are not correlated with high rates of overcrowding or cost burden.