HOUSING ELEMENTS: STATE HOUSING REQUIREMENTS FOUND TO BE IN ERROR BY STATE AUDITOR
How many housing units are actually needed?
The Auditor’s letter suggests a number of fundamental Housing and Community Development (HCD) failures:
– adequate consideration of all factors required by state law
– accurate use of healthy housing vacancy rates
– projection of the number of future households that will require housing units lacks supportive data
– lack of a proper study to support HCD housing numbers required of local communities
Excerpt quoted from Acting California State Auditor’s letter:
“… In reviewing the needs assessments for three regions, we identified multiple areas in which HCD must improve its process. For example, HCD does not satisfactorily review its needs assessments to ensure that staff accurately enter data when they calculate how much housing local governments must plan to build. As a result, HCD made errors that reduced its projected need for housing in two of the regions we reviewed. We also found that HCD could not demonstrate that it adequately considered all of the factors that state law requires, and it could not support its use of healthy housing vacancy rates. This insufficient oversight and lack of support for its considerations risks eroding public confidence that HCD is informing local governments of the appropriate amount of housing they will need.
“HCD’s needs assessments also rely on some projections that the Department of Finance (Finance) provides. While we found that most of Finance’s projections were reasonably accurate, it has not adequately supported the rates it uses to project the number of future households that will require housing units in the State. Although these household projections are a key component in HCD’s needs assessments, Finance has not conducted a proper study or obtained formal recommendations from experts it consulted to support its assumptions in this area. Finance intends to reevaluate its assumptions related to household growth as more detailed 2020 Census data becomes available later in the year, but without such efforts, Finance cannot ensure that it is providing the most appropriate information to HCD.”
Respectfully submitted,
MICHAEL S. TILDEN, CPA
Acting California State Auditor