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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 sixth submitted for this Housing Element cycle. DISCUSSION The Housing Element Annual Progress Report — 2020 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 standardized spreadsheet tables (completed tables are attached to this report). State housing legislation approved in 2017, requiring more detailed reporting and additional data to be submitted as part of the APR, is now in effect and reflected in this Housing Element APR. Some of the new standardized tables required by HCD, particularly Table A2, are difficult to reproduce in a viewer friendly manner. Staff has attempted to make the tables as clear as possible and a link to pdf copies is available upon request or on the City's website. In the past, HCD only required reporting on the number of housing unit permits issued each reporting year. HCD now requires reporting on the number of completed entitlements, housing unit permits issued, and housing permits finaled during the year, including the type of units (single-family, multifamily, etc.), and their affordability categories (very low-, low-, moderate- and above moderate-income). Table B of Attachment 1, shown on the next page, is a summary that tracks building permits issued for each year of the Housing Element's Regional Housing Needs Allocation (RHNA) period (2015-2023). In 2020, entitlements were given for nine new residential housing units, building permits were issued for 45 new residential housing units, and 114 residential units under construction were finaled. The 45 building permits issued in 2020 is a notable decrease from the number issued in 2018 (98) and 2019 (127), and a substantial decrease from the peak of housing construction in 2015 and 2016 when more than 1,200 new units came on-line. Following the peak, there was a steep drop-off once several of the higher density Housing Element opportunity sites were developed, and the number of permits issued had largely stabilized, to around 100 per year. Although the majority of active, larger-scale housing projects in the City are near completion, contributing to the slow-down, the decrease this year may also be attributed to COVID restrictions and the County Shelter-in-Place Order (SIPO), which caused building permits in March through May to only be issued for essential work and limiting the amount of construction during that time. Based on the existing market demand and approvals/entitlements issued in the past years, staff expects the City will issue a similar number (around 50 permits) in 2021 as in 2020. Projects expected to begin construction include the Lund Ranch and Austin- Meadowlark subdivisions, as well as a smaller number of new single-family homes and Accessory Dwelling Units. Page 2 of 4