Beverly Hills City Council Approves Housing Element

The Beverly Hills City Council approved the adoption of a new Housing Element, reaching a milestone in a grueling exercise that determines the city’s housing and development policies for the next eight years. The approved Housing Element calculates that under the city’s existing zoning, the city can develop a potential 8,500 units of housing over the next eight years.

The process saw the city pit itself against the state, accusing the state of a one-size-fits-all approach to addressing the housing crisis.

“I think the process in general–and I said this before–is inherently flawed and in some ways punitive. And so, if you have nothing nice to say it’s probably better to be quiet,” Councilmember John Mirisch, who abstained from the vote in protest of the process, said. “It is what it is.”

Every eight years, cities and jurisdictions in California draw up a new Housing Element, a part of the City’s General Plan that considers the housing needs of the community and anticipates how that need will change. At the center of the Housing Element is the Regional Housing Needs Assessment (RHNA, pronounced “ree-na”) number, an evaluation of the number of housing units needed in the state in the next eight years.

This is how the state comes up with that number. The State Department of Housing and Community Development (HCD) first determines the housing needs in each region of California by examining population data, and economic and demographic trends. The number that HCD calculates gets passed to a local regional planning agency that looks at more local data and distributes the total among its jurisdictions.

In 2019, as cities across California grappled with soaring rents and an ongoing homelessness crisis, HCD announced a high goal of about 3.5 million new units over the next 8 years. Beverly Hills’ allotment: 3,104 units, more than half of which must be affordable. (In comparison, in the last housing cycle, Beverly Hills’ allotment was only three.)

But as Principal Planner Timothea Tway told the Planning Commission at its Sept. 23 meeting, “RHNA represents a planning target for new residential growth and not a building quota.” In order for HCD to certify the city’s Housing Element, it must prove to the state agency that the city’s housing and development policies as detailed in the Housing Element could allow for the development of 3,104 units.

Critics of the RHNA allotment have described the number as far-fetched for a city like Beverly Hills, citing the city’s lack of undeveloped land and high property values as obstacles.

“This process at a high level has some problems associated with it, in particular as regards the RHNA number,” said Mayor Robert Wunderlich at the Oct. 12 City Council Study Session. The process doesn’t “take into account some of the distinctive aspects of Beverly Hills, that we’re a stable community, both in terms of population and in terms of jobs” and that the city is “58% multifamily.”

“The RHNA number really does seem not to take that into account, but it is the number that we have,” Wunderlich said.

Before the city resigned itself to the state directive, it explored many options to challenge the RHNA numbers. The City Council convened an ad hoc committee in October 2020 to consider appealing the city’s RHNA allocation–a longshot, by the admission of city’s own staff. In December, the Council approved a letter to other jurisdictions in the city’s region suggesting a potential legal challenge against HCD. When those two strategies failed to pan out, the City Council voted in support of a letter requesting a six- month extension to the Housing Element adoption deadline.

That plea also fell on deaf ears.

In lieu of underdeveloped property or vacant land, the city had to turn to existing developments on occupied land for its RHNA number. The Housing Element proposes that the city reach its RHNA number through two main sources: mixed-use housing and accessory dwelling units (ADU).

Mixed-use developments allow for both commercial and residential uses. The city passed an ordinance establishing a mixed- use overlay zone in major commercial areas in October 2020. Accessory dwelling units, also known as granny flats or in-law units, are additional units on properties that are detached from the main structure.

In total, the city estimates that it can accommodate up to 8,500 additional units under current zoning rules. The vast majority of that number comes from the mixed-use overlay zone, but the city also estimates construction of 150 ADUs over the next eight years.

The role of mixed-use housing in the Housing Element vindicates arguments made by the city during the passage of the mixed-use ordinance in October 2020. Back then, staff told the Council that passing the mixed-use overlay zone was “mission critical” to getting a certified Housing Element.

The city sent an earlier draft of the Housing Element to HCD, which in turn sent back comments to the city. The agency generally commented on the lack of “discreet timelines for the completion of our programs,” said Principal Planner Tway. The state also wrote that they would like to see additional steps taken for extremely low-income households and special needs households.

In response to these comments, the city made numerous updates to the document to more robustly address concerns around inclusivity in Beverly Hills. The revised Housing Element commits the city to working with a consultant to develop a fair housing action plan by 2023. City staff involved with housing and other relevant departments will receive annual fair housing training under the element. Beverly Hills will also launch a website with information on fair housing resources.

In response to other comments by the state, the city also made changes to encourage construction of more ADUs. Under the Housing Element, the city will allow ADUs above existing garages and create “by right” pre-approved ADU plans. The city will revisit the regulations in 2025 to assess whether more needed to be done, according to the Housing Element.

Although the city has approved the Housing Element, it now goes back to HCD for certification. Staff expressed confidence in the document itself but expressed uncertainty when it came to the process and the chances of approval.

“So, we, as staff, think that we are putting our best foot forward,” Tway said. But she noted key differences between this cycle and earlier rounds. “There’s much more scrutiny. The RHNA number is much higher. We’re relying on our mixed-use ordinance, so we are speculating on what that will look like in the future.”

If HCD declines to certify the Housing Element, Gohlich explained, the agency would return the document to the city with additional comments and give the city another go around. If, even after that, the city does not have a certified Housing Element, “We would potentially be subject to having to update our housing element every four years, instead of every eight, and we would potentially be exposed to legal challenges associated with not having a certified housing element if projects came through for processing,” he said.

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