What Oregon Might Learn from California's RHNA Process

Brooklyn Lindsey has worked with Ivory Innovations since 2019 at the University of Utah, first as an undergraduate and then as a law student. In 2022, we were pleased to sponsor her research with two Oregon nonprofits, 1000 Friends of Oregon and the Oregon Housing Alliance, both recognized by the 2020 Ivory Prize. You can read a summary of her findings below on what Oregon might learn from California’s housing legislation and how it could be improved “to build housing, not just plan for it.”

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In the 1980s, California added a housing element to each municipality's general plans. This was done to ensure towns, cities, and counties recognized their responsibility in contributing to state housing goals. Before a municipality writes their housing element, a Council of Governments (COG), made up of representatives from multiple counties and cities within a defined region, and the California's Department of Housing and Community Development (HCD) work together to determine the region's housing needs. This number is then divided among the municipalities in the region. When submitting general plans for state approval, the housing element is reviewed by California's Department of Housing and Community Development (HCD). The HCD uses data to create a Regional Housing Needs Assessment (RHNA) in which housing needs, including at affordability levels, are assessed within defined regions. Regions are given this number to plan their housing element. 

California has run into troubles as this has still not properly addressed their housing shortage. The state has passed statutes to improve it but it still needs some work. Oregon is in the beginning phases of a similar regional housing needs analysis program, and this project will help Oregon avoid the pitfalls that CA discovered, and also include what is working from the CA system.

Learning from California’s missteps, Oregon is creating an alternative path to building housing – not just planning for it.

While California has made great strides to alleviate issues within RHNA through statutory and administrative improvements, the next steps must address three mistakes that are “a recipe for perpetuating California’s housing shortage while purporting to do something about it.”[1] According to housing experts Christopher Elmendorf, Nicholas Marantz, and Paavo Monkennen, the following three mistakes are found when measuring the need for housing stock.

First, regions measure their future housing needs based on the difference of projected units and the current number of units in stock. This does not consider a region past and continuous undersupply of housing, which depresses the demand and thus depresses the estimated projected units. The region never catches up the accurate need, and instead, the estimated projection attempts to meet the need of the already undersupplied community.

Second, RHNA does not account for the impact of new market rate housing on the availability of affordable stock. RHNA misses out gathering important data of whether building new market rate housing actually opens up more affordable housing stock to lower income residents.

Finally, California assumes that the developable sites named in a housing element will lead to actual development. In reality, it would be more accurate to assume that only a portion of the identified sites will be developed and thus, a housing element should identify an even greater number of sites to account for the difference of named sites and sites that will actually be developed.

As California implements and gathers information on how the new legislation will impact RHNA and the state’s housing crisis, the prior measurement issues provide a road map for what next needs attention. It is critical for California to accurately measure the state’s housing needs, to use accurate data in making decisions about future growth, and to empower nonprofits, citizens, and the state oversee regions and hold them accountable in implementing their housing elements and facilitating development.

Oregon’s Housing Needs Assessment

As the nation watches California attempt to solve the state’s housing crisis, Oregon is learning from the successes and failures of RHNA.  Oregon’s Housing Needs Assessment (OHNA) methodology recognizes and demonstrates the significance of an accurate top-line number of the housing need.

The OHNA methodology recognizes that first, more than one housing unit is needed to accommodate each new regional household formed. This reflects the reality that a housing market needs additional units to allow for vacancy rates, demolitions, second/vacation homes, and price sorting. By accounting for the missing units and past underproduction, OHNA attempts to circumvent RHNA’s shortfalls in estimated future need.

OHNA’s methodology requires the state of Oregon to track progress toward housing production through total units (including affordable) and publicly funded units available to those who earn less than the median family income. Tracking total units will encourage development at all levels and increase the total production of units, allowing cities to recover from past underproduction while increasing the “rate of downward price/rent filtering.”[2]  Instead of asking cities to identify sites for affordable housing development areas, Oregon’s system will look at regional incomes and have all cities plan for affordable housing, making all neighborhoods “areas of high opportunity” rather than those reserved by the city for affordable housing.

Additionally, OHNA looks at the jobs-housing imbalance. Areas with more jobs will be assigned a higher allocation of housing to balance the jobs to housing ratio. OHNA does not require such a region to assign or select where such housing will be built. Instead, the Oregon communities will complete “housing capacity analyses” to calculate the available zoned capacity within a 20 year period. If the capacity is too low, then the city will adopt higher density development measures and allow for greater urban growth. Oregon is attempting to focus “community attention on producing units (the desired outcome), rather than meeting administrative planning requirements for sit identification that may or may not result in production.”[3]

Learning from California’s missteps, Oregon is creating an alternative path to building housing – not just planning for it. With accountability systems, a flexible set of guiding principles for production, and clear outcomes that cities must make progress toward, OHNA will avoid the pitfalls of RHNA.

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[1] Elmendorf et. al., “A Review of California’s Process for Determining, and Accommodating, Regional Housing Needs.” January 4, 2022.

[2] ECONorthwest, Juntunen, L. and Wilkerson, M. Review of California Regional Housing Needs Allocation critiques, relative to the emerging Oregon Housing Needs Analysis framework, at 3.

[3] Id. at 5.