Report Prepared by: Leah Brown, Management Analyst and Scott McBride Director of Development Services, Development Services
Title
SUBJECT: Adoption of a Resolution Authorizing Participation in the Merced County, Multijurisdictional Housing Element and Cost Sharing Agreement
REPORT IN BRIEF
Authorizes the participation in the Multijurisdictional Housing Element (MJHE) with agencies in Merced County and approving a Cost Sharing Agreement. Total cost of the Multijurisdictional Housing Element is $1,030,743 with the City’s portion being $132,267.
RECOMMENDATION
City Council - Adopt a motion:
A. Adopting Resolution 2022-72, a Resolution of the City Council of the City of Merced, California, hereby authorizing participation in the Merced County Multijurisdictional Housing Element and Cost Sharing Agreement; and,
B. Authorizing the City Manager or Deputy City Manager to execute any related documents necessary to participate in the MJHE.
Body
ALTERNATIVES
1. Approve, as recommended by Staff; or,
2. Approve, subject to conditions other than recommended by Staff (identify specific findings and/or conditions amended to be addressed in the motion); or,
3. Deny; or,
4. Continue to a future meeting (date and time to be specified in the motion).
AUTHORITY
Charter of the City of Merced, Sections 200, 405, and 1105.
CITY COUNCIL PRIORITIES
Fiscal Year 2022/2023 Adopted Goals and Priorities, Housing & Homelessness.
DISCUSSION
California Housing Element law requires every jurisdiction to prepare and adopt a housing element as part of its General Plan. State housing element requirements are framed in Government Code, Sections 65580 through 65589, Chapter 1143, Article 10.6. The law requires the State Department of Housing and Community Development (HCD) to administer the law by reviewing housing elements for compliance with state law and by reporting its written findings to the local jurisdiction. State housing element law mandates that housing elements be updated every eight years. Additionally, a certified housing element is a key requirement to qualify for numerous state grants and funding, some of which are listed in Attachment A. The City of Merced last adopted and submitted a housing element in September 2016, which is in compliance with HCD. The sixth cycle housing elements will cover the planning period of January 31, 2024, through January 31, 2032 and must be adopted and submitted to HCD for certification by February 18, 2024.
Legislative changes have increased the cost and complexity of the housing element since the fifth cycle. The City Council has given support to working on a multijurisdictional approach as part of this housing element cycle. An overview of the approach was provided to the City Council at the October 17, 2022, Council meeting.
Some advantages of this approach include cost savings due to economies of scale and a cohesive approach to addressing new state requirements. Local agencies participating in this MJHE include the Cities of Merced, Atwater, Livingston, Gustine, Los Banos, Dos Palos, and Merced County with Merced County Association of Government (MCAG) acting as the fiscal agent and contract administrator. MJHE’s are most often prepared at a county level with individual sections or plans specific to each participating agency.
One of the new housing element requirements is related to affirmatively furthering fair housing. According to HCD, achieving this objective includes preventing segregation and poverty concentration as well as increasing access to areas of opportunity. This requirement closely matches new General Plan requirements which include the creation of Environmental Justice elements. To better engage residents within disadvantaged communities, the City of Merced anticipates having increased outreach efforts, primarily related to SB 244, resulting in increased costs but better participation by those that may otherwise not be part of the process.
MCAG coordinated with jurisdiction staff to develop a request for proposals for a consultant to develop the sixth cycle MJHE. Proposals were due September 30 and MCAG received one proposal. A consultant selection committee comprised of representatives from each participating jurisdiction evaluated the proposal and is recommending that the Governing Board at its December 15, 2022, meeting approve the contract. The contract was negotiated with Rincon for $1,030,743. The City of Merced’s portion of this is $132,267. Tasks included in the preliminary scope of work are listed below.
PRELIMINARY SCOPE OF WORK
• TASK 1. PROJECT MANAGEMENT
o Project Management
o Working Group
• TASK 2. DATA GATHERING AND ASSESSMENT
• TASK 3. COMMUNITY ENGAGEMENT
• TASK 4. MULTI-JURISDICTIONAL HOUSING ELEMENT PREPARATION
o Countywide Housing Element Components
o Jurisdiction-Specific Housing Element Components
• TASK 5: DRAFT HOUSING ELEMENTS AND REVIEW
• TASK 6: ENVIRONMENTAL COMPLIANCE
• TASK 7: FINAL DOCUMENTS AND ADOPTION
A kickoff meeting with the consultant and participating jurisdictions will be scheduled for January 2023. While the statutory deadline for the Merced region sixth cycle housing element update is February 18, 2024, there is a 120-day grace period. It’s anticipated that all work will be completed by June 18, 2024.
The deadline to provide MCAG the signed resolution authorizing participation in the MJHA is early December, and the monetary deposit to participate will be due by December 30, 2022. MCAG staff will request the Governing Board to authorize the MCAG Executive Director to enter into an agreement with the preferred consultant at the December 15, 2022, meeting.
Relationship to the Regional Housing Needs Allocation Plan (RHNA)
The Regional Housing Needs Allocation Plan (RHNA) directly influences the housing element. The Plan is required by the State and identifies the specific number and income level of housing units which should be provided by having adequately zoned sites within a jurisdiction’s boundaries. The City’s requirement under RHNA is only to demonstrate adequately zoned sites not to produce them.
The MJHE will include individual plans for each jurisdiction addressing housing needs to be certified by the state. Due to timeline constraints, it is anticipated that any required rezone or adoption of other programs which provide for adequate sites to accommodate RHNA would be included as a program in the participating jurisdiction’s housing element to be completed after adoption.
The State of California Department of Housing and Community Development (HCD) approved the RHNA methodology. The Draft RHNA Plan was created and made available for a 45-day public comment period concluding on October 31, 2022. On November 17, 2022, a public hearing was held by the MCAG Governing Board and they approved the RHNA Plan. The next step would be to submit the plan to HCD which has thirty days to take final action to approve.
Relationship to SB244 Analysis - Disadvantaged Unincorporated Communities
The City Council has prioritized updating the current SB 244 analysis to assist in the identification of Disadvantaged Unincorporated Communities (DUC’s). As part of the housing element update, the SB 244 analysis will be completed. The City is also required to undertake this process if it is contemplating an amendment to the City’s Sphere of Influence (SOI), a comprehensive General Plan Update including the land use section, or a new Housing Element. Concurrent with the housing element update, the City will be moving forward with a comprehensive General Plan Update and it may include amendments to the SOI.
As noted in the October 17, 2022, Council Meeting, SB 244 does not require the physical extension of public services to residents within an identified DUC. It only requires an analysis of the specific services listed within the legislation. It also requires identification of potential funding mechanisms but does not directly provide any financial support to extend services or pay for connection costs. Many areas which may be identified in the SB 244 analysis may be candidates for grant funding and other support programs within the County prior to any future annexation of the areas into the City.
City representatives have heard concerns from many residents in areas which likely meet the criteria designating their areas as a DUC. As part of that discussion, there was a commitment to conduct additional public education and outreach on both SB 244 and the housing element update. As part of the MJHE, the City anticipates executing supplemental work to be performed by the consultant to help engage residents in areas that may meet the designation as a DUC. Additional costs are not included in the current City portion of the project.
IMPACT ON CITY RESOURCES
The City has set aside $125,000 in the Fiscal Year 2022-2023 budget for the Housing Element. Jurisdictions will be responsible for a portion of their share of the MJHE. The consultant’s contract is $1,030,743. $480,000 of MCAG’s REAP 1.0 funding will go towards the joint effort. In addition, MCAG is requesting $35,000 for staff time to manage the contract and assist with project coordination. MCAG has coordinated with local jurisdictions to develop a draft cost sharing agreement for the balance which is included as Attachment B. The City’s portion is currently $132,267. There is adequate funding in the Planning budget for professional services to cover the City’s entire portion of the cost sharing agreement.
ATTACHMENTS
1. MJHE Info Sheet
2. Cost Sharing Agreement
3. Resolution 2022-72