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Within existing city or County infrastructure there is no clear owner who is responsible for achieving RHNA permitting targets. Response: Respectfully, the City of Pinole partially disagrees with Finding 1 because while a single entity is responsible for planning to accommodate RHNA permitting targets, jurisdictions do not undertake the development of housing projects themselves. Instead the Housing Element Update process requires jurisdictions to plan for how to remove governmental and non-governmental barriers to development and accommodate all types of housing based on RHNA allocations. Each jurisdiction's Housing Element specifies which departments are responsible for carrying out the Housing Element's Plans and Programs. In Pinole, the Community Development Department prepares the Annual Progress Report (APR), which is presented before the City Council annually prior to submission to HCD. The APR provides a status update on the jurisdiction’s progress in implementing its housing element on a yearly basis.

City and County officials see no direct path to meet state-mandated regional housing (RHNA) targets. Response: Respectfully, the City of Pinole disagrees with Finding 2 because there are multiple paths to meet the state-mandated regional housing needs allocation RHNA targets. First, at a policy level, cities and the County must identify adequate sites to meet the RHNA targets through their Housing Elements. For example, the City of Pinole’s adopted and certified Housing Element for the 2023-2031 Cycle identifies capacity to accommodate 152% (759 units) of the required RHNA (500 units). In addition, Housing Elements include strategies and programs to encourage housing development in accordance with State Law. The State will not certify a Housing Element that does not accommodate RHNA targets. Second, at an implementation or production level, cities and the County create pathways for others to construct housing but do not construct housing themselves. Cities and the County primarily rely on applicants and the development community, including affordable housing developers, to propose and construct units.

There are currently no measurable penalties if a city or a County does not achieve RHNA targets in an approved housing element plan. Response: Respectfully, the City of Pinole partially disagrees with Finding 3 because while there are generally no legal or financial penalties if the cities and County do not achieve their RHNA targets, qualifying housing projects may take advantage of the streamlined, ministerial process created by SB 35 only if a city or the County has not achieved its RHNA targets. In addition, jurisdictions are subject to penalties if they do not adopt a Housing Element that is certified by the State, including designating adequate sites to accommodate the RHNA targets. For example, jurisdictions may be subject to litigation from individuals, housing rights’ organizations, developers, and/or the State of California Department of Housing and Community Development (HCD). Depending on court decisions, local control may further diminish, beyond that prescribed in State law, including, for example, suspending the jurisdiction’s authority to issue building permits or approve certain land use permits. Cities and the County may also be subject to court-issued fines, court receivership, and streamlined approval processes that remove local discretion. Regardless of the reasons for lack of building permit activities, if jurisdictions do not issue building permits that meet the RHNA targets, developers may choose to use a ministerial process for housing projects that meet specified criteria (i.e., SB 35). In addition, a developer could choose to construct housing on sites that the jurisdiction has not designated for housing.

Data published by ABAG shows that Contra Costa County and most of its cities have missed their current RHNA targets for very low- and low-income housing allocations. The allocation requirements continue to increase (16x for very low-income and 4x for low-income residents). City of Pinole’s Response to Grand Jury Report No. 2306 Response: Respectfully, the City of Pinole partially disagrees with Finding 4. While it is true that many cities and the County as a whole missed their RHNA targets for very low and low-income housing, and that RHNA Allocation for very low- and low-income housing has continued to increase, the increase in RHNA allocation is not to the extent mentioned in this report. RHNA numbers from the past 3 cycles indicate that the current (6th) cycle has had the largest increase of 2.5x from the previous cycle in very low- and low-income housing requirements. Cycle Very Low % permitted Low % permitted Source 1999 - 2006 6,481 44% 3,741 48% link 2007 - 2014 6,512 21% 4,325 24% link 2015 - 2020 5,264 16% 3,086 55% link 2023 - 2031 13,346 n/a 7,685 n/a link

Many obstacles hinder the development of AH at the local level, specifically for very low and low-income housing, including: a. Limited availability of land; b. Restrictive zoning policies specific to AH development; c. Limited developer interest to bring projects forward; d. Limited available funding; e. Lack of community support; f. NIMBY opposition & city council response to NIMBY opposition. Response: Respectfully, the City of Pinole partially disagrees with Finding 5. Despite the challenges listed above that may impede the creation of affordable housing, the City has taken steps to address each issue through our Housing Element programs, policies, and actions, to the best of our ability and in compliance with HCD standards.

Zoning changes are generally addressed only when a project is presented for development. Zoning obstacles include: a. Housing element plans that offer poor land choices for AH development; b. Restrictive height and high-density zoning policies; c. Lack of inclusionary housing ordinance(s) in many cities. Response: Respectfully, the City of Pinole partially disagrees with Finding 6. Most jurisdictions consider changing zoning during the review of the Housing Element and/or updating the General Plan, rather than solely in response to a proposed development project. The following provides specific responses to items a-c, above: City of Pinole’s Response to Grand Jury Report No. 2306 a) Housing Element plans are required by law to provide an inventory of land that addresses the unique conditions of each jurisdiction. Pursuant to Government Code Section 65583.2(b), Housing Element sites must include information on the number of dwelling units that a site can realistically accommodate, the RHNA income category the parcel is anticipated to accommodate, whether the parcel has available or planned and accessible infrastructure, and the existing use of the site, amongst other details. When selecting sites to accommodate the lower income RHNA, HCD provides jurisdictions with best practices to consider factors such as: 1. Proximity to transit 2. Access to high performing schools and jobs 3. Access to amenities, such as parks and services 4. Access to health care facilities and grocery stores 5. Locational scoring criteria for Low-Income Housing Tax Credit (TCAC) Program funding 6. Proximity to available infrastructure and utilities 7. Sites that do not require environmental mitigation 8. Presence of development streamlining processes, environmental exemptions, and other development incentives. However, sites that meet these locational criteria do not always meet the other existing use criteria required by HCD to demonstrate substantial evidence for existing uses to discontinue within the planning period. These include high vacancies, deteriorating conditions, marginally operating businesses, underutilization of sites, etc. These conditions are often directly contrary to access to high performing schools and jobs, amenities, adequate infrastructure, and clear of environmental hazards. In addition to the above requirements and pursuant to AB 686 (Government Code Section 65583(c)(10)), for Housing Elements due on or after January 1, 2021, sites must be identified throughout the community in a manner that affirmatively furthers fair housing (AFFH). AFFH means taking meaningful actions, in addition to combating discrimination, that overcome patterns of segregation and foster inclusive communities free from barriers that restrict access to opportunity based on protected characteristics. Very often the approach to sites selection is to target declining areas for redevelopment. Without tax increment financing as a reinvestment tool, jurisdictions must rely on private investments as catalyst to induce redevelopment in declining neighborhoods. Housing is the best catalyst. For jurisdictions that take a neighborhood revitalization approach to accommodating the RHNA, place-based strategies that focus on public improvements, economic development, prioritization of funding, and targeted outreach are used to complement the sites inventory strategies. For example, the City of City of Pinole’s Response to Grand Jury Report No. 2306 Pinole’s adopted and certified 6th Cycle Housing Element contains Program 19, which commits the City to pursuing programs to increase environmental health and quality of life across Pinole. b) Recent projects in Pinole demonstrate that the existing development standards (including setbacks and height requirements) do not constrain development from meeting, and in many cases exceeding, the maximum allowable density in each zone. According to State Density Bonus Law (SDBL), local agencies are required to allow increased density, reduced standards, and development incentives based on the number and type of affordable housing units proposed in a project. The SDBL applies to housing projects, including mixed-use developments, new subdivisions, or common- interest development. Developers may request incentives and concessions from the jurisdiction’s regulatory or development standards that result in actual and identifiable cost reductions to provide for affordable housing costs or rents. The number of required incentives is based on the percentage of affordable units provided in the qualifying project. For example, developers may ask for increased height above that allowed by the zoning regulations. As such, height and density do not represent a restriction to development. Furthermore, many sites are located in transit-oriented neighborhoods where recent State laws have preempted restrictions on height and density. c) 16 jurisdictions in Contra Costa County have implemented inclusionary housing ordinances. The City of Pinole has an inclusionary housing ordinance that was adopted in 2010. The inclusionary housing ordinance stipulates that, for all rental or ownership developments of four or more units, at least 15 percent of the total units must be constructed and offered for sale or rent as affordable housing units. Of those units, no less than 40 percent (or 6 percent of the total) must be made available to very low- income households. The City has seen recent development not only complying with these standards, but exceeding them. In the last two and a half years the City has entitled development of over 615 new units in Pinole, with 274 of the units being affordable. Two recent projects are one hundred percent affordable projects. The recently approved Pinole Vista project includes inclusionary units which exceeded the required percentage of very low-income units by the inclusionary housing ordinance to take advantage of state density bonus laws. Another recent development includes a subdivision of four units that increased from three to four units to provide one moderate income for-sale unit. This and other recently approved market and affordable housing projects demonstrate that the cumulative regulations have been able to facilitate a variety of new housing development, such that 80% of the City's RHNA could be met with currently approved projects. Recent development trends demonstrate that the City’s inclusionary housing requirements do not constraint development. City of Pinole’s Response to Grand Jury Report No. 2306 The City currently utilizes an incentive-based approach to achieving affordable housing on-site and does not collect in-lieu fees through the City’s inclusionary requirement. Program 7 in the City's Housing Element aims to address the constraints faced by smaller development projects, which often end up providing a higher proportion of affordable units due to their size. One such constraint is the lack of an in-lieu fee option. To create more flexibility for smaller projects and a new funding source for affordable housing initiatives, the City is pursuing the creation of an in-lieu fee alternative for the inclusionary housing requirement. The inclusionary fee will help ensure that the inclusionary requirements do not constrain smaller projects and that smaller projects are providing an equal proportion of affordable units as larger projects.

Penalties directed at cities and the County (financial, loss of control over local planning) are tied to not meeting state deadlines for Housing Element plan approval. Response: Respectfully, the City of Pinole partially disagrees with Finding 7. We agree that there are penalties that are directly related to not meeting the statutory deadline of the Housing Element. Builder’s Remedy, where individuals may apply for a building permit on land that is not designated for housing, is one such penalty that is directly linked to meeting state deadlines for Housing Elements. We partially disagree with Finding 7 because there are other penalties that are not directly tied to the statutory deadline. There are penalties associated with lawsuits, which are rarely brought forward for simply missing the statutory deadline, but more due to a perception of continued inactions. Penalties also include eligibility for funding. As stated in the response to Finding 3, jurisdictions may be subject to litigation from individuals, housing rights’ organizations, developers, and/or HCD. Depending on court decisions, jurisdictions may lose additional local control, such as suspension of authority to issue building permits or approve certain land use permits; and/or cities and the County may be subject to court-issued fines, court receivership, and streamlined approval processes that remove local discretion. In addition, depending on specific programs, eligibility for some state funds requires a certified Housing Element (such as PLHA and State HOME funds). Finally, loss of local control is not limited to jurisdictions that do not meet specified timeframes for a certified housing element. For example, SB 35, the Housing Accountability Act, the No Net Loss Act, Density Bonus Law, and AB 2011/SB 6 specify what types of projects local jurisdictions must approve and where such projects must be approved, regardless of whether jurisdictions meet state deadlines for Housing Elements. City of Pinole’s Response to Grand Jury Report No. 2306

Builder's Remedy and SB35 projects do not address ingrained local obstacles identified in this report that prevent the completion of approved AH projects. Response: Respectfully, the City of Pinole partially disagrees with Finding 8 because while Builder's Remedy and SB35 projects are valuable tools that can expedite affordable housing development, they may not comprehensively address all the ingrained local obstacles identified in this report that hinder the completion of approved AH projects. The effectiveness of these streamlined processes can vary from jurisdiction to jurisdiction, and while they can help overcome certain barriers like restrictive zoning policies and prolonged approval timelines, other challenges mentioned in the report, such as limited available funding, community support, and NIMBY opposition, may continue to persist in diverse degrees in different locations. To achieve the successful completion of approved AH projects and effectively address these obstacles, a multifaceted and jurisdiction-specific approach is required, taking into account the unique circumstances and complexities faced by each locality.

When local Redevelopment Agencies (RDA’s) were discontinued by the state in 2012, the County and cities, did not address the loss of funding for affordable housing or find alternative funding to support affordable housing projects until voters passed Measure X in November 2020. Projects that target very low- and low-income residents were particularly impacted. Response: Respectfully, the City of Pinole partially disagrees with Finding 9 because while the County and cities did not create or find new sources of funds for affordable housing after the State discontinued local RDAs, State law limits local jurisdictions’ ability to create new funding sources. Voters need to approve virtually all new funding or financing mechanisms to generate the revenues or funds needed to preserve existing affordable housing and construct or finance new affordable housing. The Board of Supervisors and Town/City Councils cannot, for example, float bonds any longer without voter approval. While Measure X, the countywide 20-year ½ cent sales tax was approved in November 2020, Measure X is projected to provide up to $12 million annually for “housing and related services” for the entire County (emphasis added). Measure X Affordable Housing funds will be distributed through a Notice of Funding Availability (NOFA) process, a competitive process. The City of Pinole has maintained former RDA assets, and revenues generated from those assets, in a Low- and Moderate-Income Housing Asset Fund that continues to be used to administer and monitor compliance with affordable housing and loan agreements and provide for affordable housing development. For example, the Satellite Affordable Housing Associates (SAHA) development at 811 San Pablo is 33 units on a 0.61 acre previously vacant infill parcel. The development is all lower-income housing units. The project is on city-owned land and the City is contributing over three million dollars in Housing Asset Funds towards the project’s construction in addition to providing the land. The project was entitled in under five months from application submittal and in one hearing with the Planning Commission. A grading permit City of Pinole’s Response to Grand Jury Report No. 2306 was submitted on July 5, 2022 and building permit was submitted on December 12, 2022. Construction began in June 2023. As a part of Program 7 in the City of Pinole’s adopted and certified Housing Element, the City is developing a Housing Successor’s Low and Moderate Income Housing Asset Fund Policy. The policy will set priorities and goals for the use of affordable housing funds in the City as well as investigate the creation of an in-lieu fee as an additional alternative to the inclusionary housing requirement.

Measure X housing funds are not fully dedicated to building AH for very low- and low- income residents. Response: The City of Pinole agrees with Finding 10.

Local funding provided by bonds like Measure X Housing Fund is a critical component of a developer’s overall ability to raise funds for an AH development. Response: Respectfully, the City of Pinole partially disagrees with Finding 11 because while local funding provided by bonds like Measure X Housing Fund in Contra Costa County are a beneficial component to help fund affordable housing construction, the amount of funding available from Measure X is not high enough to be a critical factor in a developer's overall ability to raise funds for an affordable housing (AH) development. Bond funding requires voters’ approval. Depending on the timing (economic conditions and bond measures for other competing interests), bond financing has not been the most significant source of affordable housing financing. Under the Measure X Program Allocation Summary, only $10 million dollars (about 13% of FY 2022-23 funding and about 4.5% of total funding) were allocated to a Local Housing Trust Fund; for FY 2023-24, $12 million dollars were allocated. The Measure X Housing Funds are to be dispersed by the Department of Conservation and Development (DCD) and the Health Services’ Health, Housing and Homeless (HSD-H3) Services and the Housing Authority of the County of Contra Costa. While a contributing factor, Measure X dollars allocated to housing production is not critical to the overall ability of the jurisdictions to meet their RHNA requirements for affordable housing.

Cities that proactively engage citizens, address zoning obstacles, make reasonable zoning concessions, work collaboratively with developers, provide local funding support, and are united in addressing NIMBY opposition, have been successful in attracting AH projects. Response: Respectfully, the City of Pinole partially disagrees with Finding 12 as the City of Pinole agrees that proactive strategies can help attract affordable housing developers and mitigate the barriers to housing production; however, proactive strategies alone do not result in affordable housing projects being constructed. For example, while City of Pinole engages in all of the above, a variety of other obstacles towards affordable housing development exist beyond a local jurisdiction’s control. This includes the gap in financing between constructing City of Pinole’s Response to Grand Jury Report No. 2306 market-rate versus affordable housing, land costs, the land-to-building ratio when a property contains an underutilized building, the cost to upgrade or renovate an existing nonresidential building to accommodate housing, infrastructure costs (on- and off-site), fees for public utilities (particularly for non-municipal utilities), among others.

The latest RHNA targets for cities and unincorporated Contra Costa County show a significant increase in the number of units that are expected to be permitted for very low and low-income housing. Response: Respectfully, the City of Pinole partially disagrees with Finding 13 as it is true that RHNA Allocation for very low- and low-income housing has continued to increase, however, the increase in RHNA allocation is not to the extent mentioned in the report. The overall number of RHNA targets has increased significantly over the last four cycles. The most dramatic increase was from Cycle 5 to Cycle 6, where the overall number of RHNA targets increased over twofold—from 20,630 to 49,043. However, proportionally, there has not been a significant increase in the percentage of very- low and low-income RHNA targets. For example, the proportion of very low-income targets increased by only one percent – from 26% to 27% between Cycles 5 and 6; likewise, the proportion of low-income RHNA targets increased from 26% to 27% during the same period of time. Cycle Total Very Low Low Contra Allocation Percentage Allocation Percentage of Costa of Total Total RHNA RHNA RHNA 3rd: 1999 - 2006 34,710 6,481 19% 3,741 11% 4th: 2007 - 2014 27,072 6,512 24% 4,325 16% 5th: 2015 - 2020 20,630 5,264 26% 3,086 15% 6th: 2023 - 2031 49043 13,346 27% 7,685 16% Grand Jury Recommendations: