The City of Cupertino is once again in legal jeopardy over a housing ordinance adopted this week into the city’s zoning code that state officials say fails to adequately incentivize the development of affordable housing as required by state law. The ordinance and a related resolution adopted by the city last December fail to meet the state’s requirements, according to a letter sent by the Department of Housing and Community Development (HCD) to Cupertino City Manager Deb Feng more than 24 hours prior to Tuesday’s meeting. The letter was not reviewed or shared with councilmembers prior to or during the meeting, according to a statement issued by Feng Friday calling the incident a ‘complete oversight.’
AB 2345, signed into law last September, encourages the actual construction of more affordable housing units through a mix of developer incentives and density bonuses. It increases the maximum density bonus from 35 to 50 percent of allowed density depending on share and level of affordable housing, and allows cities to grant additional waivers for projects close to transit and which are 100 percent affordable, and also reduces maximum parking requirements for certain projects. The law is based on a successful program in San Diego which has helped spur a 3.5x annual increase in the number of affordable and market rate homes in the first 20 months of adoption, according to a 2020 report from Circulate San Diego, the local PBS station reported in September.
The law also includes an exemption for programs in jurisdictions currently successful in incentivizing housing development to continue as implemented. However, Cupertino is not one of those jurisdictions.
“The City’s actions on Resolution No. 20-141 and Ordinance No. 21-2226 clearly indicate the City’s intent to implement the exemption process provided in paragraph (s). However, the City’s actions fall short of the successful programs envisioned by the Legislature,” HCD wrote.
Since the ordinance and the resolution are nonbinding and do not require the City to adopt a new policy, but instead offer “merely a statement to the City’s intent to adopt a policy in future,” HCD concludes, “Cupertino must comply with the formulas for density bonuses and concessions and incentives that AB 2345 provides.”
The city’s interpretation was called into question prior to the vote during Tuesday’s meeting by Councilmember Hung Wei, who urged the Council to wait, voicing concern that adopting the resolution would trigger another warning letter from the HCD. “By doing this, are we going to receive that letter and get on the state’s radar again saying that Cupertino is doing something different and not conforming? We don’t have a good reputation already, and I just feel that we don’t want to exacerbate that,” she said.
The city received a letter from HCD in August 2019 putting it on notice for the lack of housing supply that has been a consistent point of contention in recent years, and warning it may be in violation of state law around housing requirements known as the Regional Housing Need Allocation or RHNA.
“We’re not in a dictatorship, we’re not in an autocracy, we are in a system of federalism; there are states with state rights and localities have locality rights,” said Mayor Darcy Paul at Tuesday’s meeting. “If we are demonstrably making these efforts better [to solve the housing crisis], then I’m very proud to support the legislation that we have.”
The letter received this week included explicit instructions to the City, one of which has been violated by Tuesday’s vote in passing the ordinance.
“The City must apply State Density Bonus Law by processing density bonus applications in accordance with AB 2345 and take no further steps to adopt Ordinance No. 21-2226,” HCD said in its letter.
Feng will be meeting with HCD on Monday, May 10 to discuss the letter.