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BACKGROUND The State of California requires that each city and county government regularly update its General Plan Housing Element. The State also mandates that each Housing Element address its share of its regional housing need for people of all income categories. The total number of new housing targets for each of the State's 31 planning regions is determined by the State Housing and Community Development Department (HCD). The allocation of these housing targets to cities and counties within each planning region is determined by its local Council of Governments (COG). In the case of the San Francisco Bay Area, the Association of Bay Area Governments (ABAG) is the COG and as such, it is responsible for allocating housing targets to the region's cities and counties, including Pleasanton. The final allocation formula must be approved by the HCD which also approves, or certifies, cities' and counties' Housing Elements. The process of allocating new housing targets for all income categories throughout the cities and counties within the State's planning regions is called the Regional Housing Needs Allocation (RHNA) process and it is mandated by State law. Generally, cities and counties work with their local COG to develop a formula for allocating the housing units identified by the State and ABAG for its region. Based on State law, the RHNA process has the following four objectives: (1) Increase the housing supply and the mix of housing types, tenure, and affordability in all cities and counties within the region in an equitable manner, which shall result in each jurisdiction receiving an allocation of units for low and very low income households. (2) Promote infill development and socioeconomic equity, the protection of environmental and agricultural resources, and the encouragement of efficient development patterns. (3) Promote an improved intraregional relationship between jobs and housing. (4) Allocate a lower proportion of housing need to an income category when a jurisdiction already has a disproportionately high share of households in that income category, as compared to the countywide distribution of households in that category from the most recent decennial United States census. To establish an allocation methodology for the current RHNA which runs from 2006 through June 30, 2014, ABAG formed the Housing Methodology Committee (HMC) which reviewed various options for determining housing needs. Mayor Hosterman represented the City on the HMC. The HMC explored numerous options for determining regional housing needs including: • Water and sewer capacity • Land suitable for urban development or conversion to residential use • Protected open space -lands protected by State and federal government • Existing employment, employment near transit and employment growth • County policies to protect prime agricultural land • Distribution of household growth • Market demand for housing Page 2 of 5