By: Claire Sullivan, Associate Lobbyist
State Auditor Recommends Legislative Changes to Improve Housing Planning Outcomes
The California State Auditor’s January 2026 audit finds that the housing element review process during the sixth cycle took significantly longer than in prior cycles, with median approval times exceeding one year. Importantly, the audit concludes that these delays were not caused by HCD missing statutory review deadlines, but rather by the increased complexity of housing element law, sharply higher housing allocations, and the time local jurisdictions needed to revise drafts to address new requirements—particularly those related to sites inventories and Affirmatively Furthering Fair Housing (AFFH). While HCD’s findings letters were generally precise, consistent, and legally grounded, most jurisdictions reported that written feedback alone was insufficient to resolve complex compliance issues.
The audit emphasizes that individualized assistance and timely guidance are critical to compliance, yet HCD’s ability to provide both was constrained by staffing shortages, reviewer turnover, and severe workload spikes caused by overlapping regional deadlines. In several cases, HCD issued comprehensive guidance only after new legal requirements had already taken effect or after early-deadline jurisdictions were required to comply. The report concludes that improving the timing of legislation and guidance issuance—rather than expanding HCD’s legal authority—is essential to shortening approval timelines and improving outcomes.
Legislative Improvements to Strengthen HCD’s Review Process
- Include transition periods for new housing element laws
- Delay the operative date of new requirements enacted mid-cycle to allow HCD time to develop and publish guidance before jurisdictions must comply.
- Require or incentivize timely guidance
- Establish expectations (or statutory targets) that HCD issue guidance on new laws before they take effect, especially for complex analytical requirements like AFFH or sites inventories.
- Further stagger housing element submission deadlines
- Break large regional cohorts (e.g., ABAG and SCAG) into smaller groupings with more evenly distributed deadlines to reduce workload surges at HCD.
- Create incentives for early or proactive submittals
- Offer priority access to housing grants, streamlined review, or enhanced technical assistance for jurisdictions that submit drafts ahead of statutory deadlines.
- Align workload smoothing with staffing capacity
- Pair staggered timelines with budget and staffing decisions informed by workforce analyses to ensure HCD can provide individualized assistance during peak periods.
Actions Local Governments Can Take to Push for Accountability When Guidance Lags
- Formally document timing gaps
- Submit written comments, findings responses, or cover letters noting when statutory requirements took effect before guidance was issued and how that affected compliance.
- Request written clarification or interim standards
- Ask HCD to confirm in writing how it will evaluate compliance in the absence of formal guidance, including whether interim approaches will be accepted.
- Coordinate through councils of governments (COGs)
- Use COGs to elevate shared concerns, request regional briefings, or jointly advocate for delayed enforcement or clearer expectations.
- Raise issues during legislative oversight or audits
- Provide testimony, letters, or data to legislators and oversight bodies documenting how timing misalignments increase revisions, delays, and costs.
- Advocate for statutory transition provisions
- Support legislation that explicitly ties implementation dates to guidance availability, reducing uncertainty and litigation risk for future cycles.
Local government partners stand as critical stakeholders in housing reform implementation, so they need timely guidance and communication about evolving requirements to coordinate community resources.
2024-109 California Department of Housing and Community Development – California State Auditor