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ABAG Projections - 2007To: Honorable Mayor and City Council Da December 4, 2006 From: Sharon Fierro, Community Development Director ~~ Steve Prosser, Planner I Via: Daniel Rich, City Manager ~ ~-- Subject: ABAG PROJECTIONS 2007 ABAG Projections The Association of Bay Area Governments (ABAG), in conjunction with the Metropolitan Transportation Commission, the Bay Area Air Quality Management District and County Congestion Management Agencies uses demographic and economic forecast data to make the bi-annual projections about population and job growth in the Bay Area. Statistics from the most recent United States Census are the base and are adjusted using information from the California State Department of Finance on new businesses, increases in the employed residents, new housing units completed and vacancy rates for each region of the state. These projections are used by both governmental entities and businesses to predict growth in various sectors of the economy and plan for infrastructure investments and housing and service needs. One key use of these statistics is to determine how much housing is needed in the State of California to meet the demands of our growing population. Housing needs must be addressed in the Housing Element of the General Plan and each jurisdiction must plan to provide its fair share. Projections 2007 and its Relationship to Housing State law mandates that the Housing Element be updated every 5 years; however deadlines for the past two updates were extended by the legislature because the state lacked the ability to pay for this State Mandated program. When Campbell initiates preparation of the Housing Element update next year, we will be required to identify locations to accommodate its fair share of the projected housing needs and to remove barriers that unreasonably constrain its development. Campbell's last fair share for the 2001 Housing Element update was 777 units to be constructed in 7 years. Campbell is very close to meeting that overall goal. While production of affordable units falls short of our goal, the recent adoption of the inclusionary ordinance should make a difference in the next Housing Element Update review. (See attached summary of housing production.) December 4, 2006 ABAG Projections 2007 Page 2 The last section of this memorandum contains a narrative from ABAG's Projections 2005. It explains how the methodology was formulated at that time and used to make predictions of the number of housing units needed to accommodate the projected growth in jobs. The ABAG Board of Directors will be considering new policy issues at their meeting on November 16th that will be used as a base for the preparation of Projections 2007. The new methodology and statistics will be used to allocate each jurisdictions fair share of the HCD in estimating future growth for the ABAG region and allocating our Regional Housing Needs Assessment (RHNA) which is also know as a jurisdiction's "fair share" of housing. ABAG in turn will proportionally allocate a share of the regional number to each local jurisdiction. Draft projection figures were distributed to each jurisdiction in the Bay Area for review and comment. Draft forecasts numbers have been provided for review by local jurisdictions and other interested groups. The preliminary information for our County is attached and has been reviewed by the Community Development Department for accuracy. Staff believes that the assumptions are reasonable based on past historic trends and conservative future forecasts. Vice Mayor Furtado serves on the ABAG Executive Board that reviews this issue and Sharon Fierro has been monitoring it closely. We are in the 60-day window for ABAG to receive comments. METHODOLOGY: The growth predictions involve the following categories: Total Jobs, Households, and Total Population within our jurisdictional boundaries. Policy based projections are shaped by land use policies consistent with local plans and, in the long run, assumed policy changes resulting in higher regional housing production and additional higher density housing near transit. The projections also involve a set of assumptions about the Bay Area and national economies, the labor force, demographic changes, transportation, etc. These factors drive the demand side of the 2007 projection process. The ABAG Executive Board has adopted the assumption that, in the long term, they expect to see a higher proportion of development near transit and as infill in existing urbanized areas. The forecast will still be consistent with local plans, but the emphasis of development, particularly in the long run, would begin to diverge from historical patterns. The information for the 2007 projections has been collected for each local jurisdiction at regular intervals. Specifically, for the 2007 projections, ABAG has begun to collect detailed information from our General Plan and our neighborhood plans. December 4, 2006 ABAG Projections 2007 Page 3 ABAG policy based projections have consistently suggested a regional shift toward better job/housing balance, preservation of open space, and development focus in urban and transit accessible areas. The 2007 projection forecasts are intended to represent expected growth for the region to the year 2030 assuming some policies designed to move development towards infill opportunities and transit-oriented development. The best predictive capacity for the 2007 projections is regional, at best. Local jurisdictions are subject to some uncertainty, particularly in areas undergoing unanticipated changes. How does the 2007 projection affect the Housing Needs Determination? The 2007 projections influence the Housing Needs Allocation; although the Housing Needs Determination and the 2007 Projections are separate and distinct forecasts. The near- term household and job growth forecasts are likely to be important components in assigning local jurisdiction's housing needs.