STAFF REPORT - CITY COUNCIL/SUCCESSOR AGENCY/PUBLIC FINANCE AUTHORITY

California housing element law requires every jurisdiction to prepare and adopt a housing element as part of their required general plans. It’s typical for each jurisdiction to prepare its own separate general plan and housing element. However, in 2016, 13 of the 16 jurisdictions in Fresno County, including the City of Coalinga, with help from Fresno COG, prepared a multi-jurisdictional 5th cycle housing element. This was unique, and helped a number of local cities become compliant with their housing element for the first time in years. Compliance is important as many grants and funding opportunities require a current housing element.

The 6th cycle housing elements are now underway and must be submitted to the state for certification by the end of 2023. While legislative changes have increased the cost and complexity of the housing element since the 5th cycle, there are some advantages in pursuing a joint effort. Local jurisdictions in Fresno County have again requested Fresno COG hire a consultant to be paid for by participating member agencies.

The housing element is a state required element of the General Plan and is required by law to be completed every 8 years. There are defiantly benefits to making sure the housing element is completed each cycle and in-time such as eligibility for grant funding. Unfortunately, the consequences for inaction reach far and the state has issued specific guidance to Cities on the consequences of falling short in adopting or otherwise complying with housing elements. This ranges from legal suits, loss of permitting authority, financial penalties and court receivership. The attached document by Fresno COG provides in more detail the consequences of non-compliance which could have significant impacts on the City.

Staff has been engaged in the ongoing effort with member agencies to develop a plan to undertake the 6th cycle housing element just like the 5th cycle. As cost is the most significant issue related to this planning document, the MJ approach is the most cost effective way to complete this document. 

Challenges of 6th Cycle Housing Elements

• New legislation increases the level of analysis, community engagement, new requirements for suitable sites inventory, and a robust analysis and requirements related to fair housing
• This leads to a substantial commitment in cost and staff time
• Need to start ASAP (due Dec. 2023, and this typically takes 18-24 months to prepare)
• The housing element update will trigger other required general plan updates: safety element (SB 379) and environmental justice element (SB 1000)

Opportunities with a Multi-jurisdictional Effort

• Economies of scale: the required background report, standardized policies and programs, CEQA compliance, and a combined community engagement effort will save jurisdictions time and money.
• Compliance with housing element law for jurisdictions that may not have the staff or funding to pursue an individual housing element.
• A cohesive approach to addressing new requirements and coordination with HCD, the state agency in charge of certifying the housing element.

It was estimated, through discussions with several consultants, that the total consultant contract is going to be approximately $2 million, with the estimated cost for each of the thirteen small cities approximately $115,000, and $180,000 for the City of Fresno and the County.  Fresno COG will act as a fiscal agent so that participating jurisdictions do not need to provide their share of the funding up front. Fresno COG will begin requesting reimbursement monthly after July 1, 2022 in order for the City to budget for the expense.

On February 3, 2022 the Council directed staff to bring back a formal resolution and MOU (changed to a cost sharing agreement) in order to participate in this effort including submitting a $10,000 deposit to Fresno COG to begin the effort and confirmation of commitment. That will be the only expense prior to the 2023 budget and staff budgeted $15,000 in this fiscal year as it was expected there may be some housing element expenses prior to the FY2023.

Staff has attached a copy of the participating resolution with cost sharing agreement. The updated total contribution from the City, since the last meeting, will be $121,296.00. This amount, minus the $10,000 deposit will be budgeted in the 2023 fiscal year budget. 

• In staffs opinion, there is no alternative other than pursuing the housing element on our own which would be significantly higher in cost and increased staff time, which staff does not recommend, as the MJ approach is far more cost effective and efficient for smaller jurisdictions. The consequences of doing non-compliance will have significant impacts on the City's ability to control land use as well as could have financial impacts beyond that of the cost of the element itself.