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BACKGROUND Section 65400 of the California Government Code requires the City to file an annual report with the State Department of Housing and Community Development (HCD) addressing the status of the General Plan Housing Element and progress made toward implementing its goals and policies. The General Plan Housing Element for the 2015- 2023 planning period was adopted by the City Council on January 6, 2015. This annual report will be the third submitted for this Housing Element cycle. DISCUSSION The Housing Element Annual Progress Report— 2017 is attached for City Council review (Attachment 1). HCD has specific reporting requirements for the Annual Progress Report, including information contained in a series of five standardized tables (completed tables are attached to this report). Preceding the tables are brief introductions and highlights of the City's implementation activities over the past year. Recently approved State housing legislation, requiring more detailed reporting and additional data to be submitted as part of the APR, will go into effect for reporting of 2018 housing data and will thus be reflected in next year's Annual Progress Report. HCD currently requires reporting on the number of housing unit permits issued during the year, including the type of units (single-family, multifamily, etc.), and the affordability categories (very low-, low-, moderate- and above moderate-income). Table B of Attachment 1 tracks building permits issued for each year of the Housing Element's Regional Housing Needs Allocation (RHNA) period (2015-2023). In 2017, building permits were issued for 115 new residential housing units: • Twelve (12) senior living units are part of the Stoneridge Creek by Continuing Life Communities (CLC); • Forty-eight (48) townhome units are part of Andares by Summerhill Homes within Hacienda Business Park; • Twenty-one (21) units are part of Meridian at Ironwood by Ponderosa; • Twenty-one (21) permits were issued for various infill apartments in Downtown; • Eight (8) permits were issued for various single-family homes; and • Five (5) were issued for accessory dwelling units through-out the city. The 115 building permits issued in 2017 is a notable decrease from the 387 permits issued in 2016, and 891 permits issued in 2015. The number has been decreasing as the higher density Housing Element opportunity sites have been developed. Based on the existing market demand and recent approvals, including Irby Ranch, staff expects that the City will issue between 100 and 200 permits in 2018. Table C of Attachment 1 tracks implementation of Housing Element policies and corresponding action programs. Highlights within the last year include the approval of the Irby Ranch project, including an Affordable Housing Agreement that dedicates 1.65 acres of land from the developer to the city, to be used for affordable housing in partnership with Sunflower Hill (a non-profit organization dedicated to providing housing for individuals with special needs). The City also has committed $2.25 million from the Page 2 of 3