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BACKGROUND Recent approvals of new housing have been in response to the ongoing and serious challenge of housing availability and affordability in the State, summarized in a 2017 HCD report "California's Housing Future — Opportunities and Challenges." The report documents the state's historic underproduction of housing relative to needs, which has exacerbated the "affordability crisis" and contributed to related issues such as increased homelessness, traffic congestion, and falling rates of homeownership. The State has deployed a range of strategies over recent years in an effort to address housing needs: these include the increasing stringent mandates of the Housing Element and the Regional Housing Needs Allocation (RHNA) process; as well as in legislation intended to incentivize affordability and provide streamlining to remove regulatory constraints. The State's recent rounds of 2017 and 2018 housing legislation, discussed later in this report, reflects many of those same approaches. Regional Housing Need Allocation All California cities and counties are required to accommodate their "fair share" of regional housing need, as determined through a Regional Need Housing Allocation (RHNA) process. HCD determines the share of the state's housing need for each region, which is then allocated by the regional council of governments (COG) to each local jurisdiction. The Association of Bay Area Governments (ABAG) is the COG for the nine- county Bay Area. Following the RHNA, local jurisdictions must update their Housing Element (and typically identify opportunity sites and rezone property) to demonstrate that there is an adequate amount of land zoned, at appropriate density, to achieve its RHNA for the current planning period. RHNA Cycles & Income Levels The RHNA is based on various factors, including population and other demographic projections from the California State Department of Finance, and attempts to take account of market conditions such as the recent recession. In the most recent RHNA cycle (for the 2014-2022 period) HCD established that the Bay Area had to plan for 187,990 new housing units during the current RHNA cycle, across four income categories: very low; low; moderate; and above moderate income. The city of Pleasanton's 2014-2022 RHNA allocations are shown in Table 1.1 Housing Element and Annual Progress Report (APR) The Housing Element is one of nine mandated elements in a city's General Plan. At the local level, the Housing Element allows the local jurisdiction to approve a community- specific (local) approach to "how" and "where" housing needs will be addressed. A jurisdiction's Housing Element must be updated every eight years. Pleasanton adopted its most recent Housing Element in 2015, with the next update required in 2023. Housing affordability levels are based on a percentage of"Area Median Income"(AMI),ranging from 30%AM1 for Very-Low-income housing,to over 150%AMI for Above-Moderate Income units. Page 2 of 7