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Manhattan Beach City Council Approves State-Mandated Housing Plan, Reluctantly

Mar 23, 2022 10:51AM ● By Jeanne Fratello
The Manhattan Beach City Council voted on Tuesday night to approve a state-mandated housing plan that would gradually increase housing density by 774 units - with the caveat that they were voting "under protest" against the requirements from Sacramento.

The city was required to submit the plan, known as the Housing Element and part of what is known as the 6th Cycle of the Regional Housing Needs Assessment (RHNA), to show how Manhattan Beach would meet state requirements for adding new housing.

The requirement to plan for 774 new units was essentially 20 times the requirement outlined for the previous 8-year cycle, when 38 new units were required. Out of those, 487 must be new lower-income units. Many cities around California are struggling with comparably large increases in housing mandates from the state.

The whole exercise has come under fire from councilmembers and many community members as being unrealistic for Manhattan Beach, and an example of state government overreach.

The vote to approve the Housing Element was 3-2, with Mayor Hildy Stern, Mayor Pro Tem Steve Napolitano, and Councilmember Richard Montgomery voting in a "yes" vote that they said they wanted to characterize as "under protest." Councilmembers Joe Franklin and Suzanne Hadley voted "no" on the measure.

Plan Required, 'Whether We Agree or Not'

Napolitano characterized the requirements from the state as "one size fits all" and said they don't make sense in an already densely populated Manhattan Beach. Furthermore, he said, it raises a variety of infrastructure issues that the city would have to deal with such as increased traffic and a need for more open space. "This whole thing is disappointing," he added.

But Stern urged her colleagues to adopt the measure with the acknowledgement that no one was pleased with it, in order to avoid, or at least delay, the range of severe consequences that could come with noncompliance.

"We can lament the decisions that have been made," she said. "We have taken some actions to try to address lack of local control. We did endorse the citizens' initiative that would override state overreach actions. Those type of efforts will help us protect and represent our community."

Mayor Stern continued, "But right now what we’re looking at is a requirement to adopt our housing element, whether we agree or not... We’re still subject to the same implications if we don’t."

Stern added, "I don’t see how not adopting the housing element helps us. I would propose we adopt the resolution and we continue our efforts to represent our city in all the other ways we have available to us."

City Had Missed Earlier Deadline

The city submitted a detailed plan to comply with the requirements for increasing housing density last year. That plan was rejected by the state in October 2021. The city was required to submit a revised plan by February 12 that would show how it would carry out plans to accommodate the additional housing. 

Last month, councilmembers agreed on a 5-0 vote to let the deadline pass, and to continue discussing the plan in a closed session, leaving the risk of legal and financial consequences for missing the deadline.

City staff had prepared an outline of a plan that City Council could pass and be in compliance, and warned councilmembers that noncompliance with the state-mandated deadline could be risky for the city. The revised plan identified many areas around the city, in commercial corridors as well as residential districts, where new housing or mixed-use development, under new zoning rules, could help the city meet the target of 774 new units. 

The consequences of failing to adopt a plan include steep financial penalties of up to $10,000-$100,000 per month. Also, a city could be exposed to litigation from housing rights organizations, developers and the California Department of Housing and Community Development, staff warned.

Additionally, a city could be stripped of its authority to issue any building permits, including for remodeling projects, or to grant zoning changes, with the city's "general plan" deemed invalid.

Regional Housing Needs Assessment Requirements

The nature of the mandate that Manhattan Beach is struggling with now goes back more than 50 years, and filters from state to regional agencies before local targets are set. 

Since 1969, California has required that all local governments (cities and counties) adequately plan to meet the housing needs of everyone in the community. California’s local governments meet this requirement by adopting "housing plans" as part of their “general plan” (also required by the state).

General plans serve as the local government’s "blueprint" for how the city and/or county will grow and develop and include seven elements: land use, transportation, conservation, noise, open space, safety, and housing.

In order to create a housing plan (a.k.a. "housing element") showing it could meet the local housing needs, a jurisdiction must first know how much housing it must plan for (and estimate how much will be needed at a variety of affordability levels in order to match the needs of the people who will live there). This is determined by a process called the regional housing needs assessment.

The California Department of Housing and Community Development (HCD) is responsible for determining the regional housing needs assessment (segmented by income levels) for each region’s planning body known as a “council of governments” (COG). HCD starts with demographic population information from the California Department of Finance and uses a formula to calculate a figure for each region/COG.

Each COG uses its own demographic figures to calculate what it believes the regional housing need is. Each COG then coordinates with HCD — taking into account factors not captured in the calculations — to arrive at a final figure. This final figure is the regional housing needs assessment.

Once HCD and the COG have agreed to the region’s assessment figure (the amount of housing that must be planned for), the COG takes over and is responsible for divvying up the housing need amongst all of the jurisdictions within that region. The COG does this in a Regional Housing Need Allocation Plan (RHNA Plan).

The 6th Cycle RHNA (2021-2029) calls for Manhattan Beach to create 487 new lower-income units, 155 moderate-income units, and 132 above-moderate-income units, for a total of 774 more units.

That number is up dramatically from the 5th Cycle, which called for Manhattan Beach to create only 38 additional units.

In light of the similar challenges faced in this cycle by many cities, a statewide ballot initiative was recently championed by Redondo Beach Mayor Bill Brand and two other civic leaders. The measure aimed at making city zoning laws supreme over state requirements.

The measure was withdrawn last month as it became clear that the campaign could not obtain the required number of signatures to qualify for the November 2022 ballot. Supporters say they will come back and and try to qualify for the November 2024 ballot.

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