Each year, HCD requires that jurisdictions submit Annual Progress Reports (APRs), detailed summaries of annual housing production. Last year’s APRs illustrate a bleak story: Across San Mateo County, housing development ground to a halt in 2023.
Though cities recently updated their housing elements with more pro-housing policies, many did not account for the impact of rising interest rates. More policy changes may be necessary in coming years to restart the housing development pipeline.
Top: An APR from San Carlos suggesting not a single lower-income unit was proposed in the city in 2023. Bottom: An excerpt from Foster City’s APR suggesting just four homes were proposed in 2023, all ADUs, none of which are likely to actually be rented on the open market at an affordable rate.
Every city in San Mateo County faces similar trends. San Carlos and Foster City are not particularly unique, just examples shared with HLC by local advocates.
Even some of San Mateo County’s most pro-housing cities have seen affordable housing production stall out. In Redwood City, at least four proposals for affordable housing brought forward under the city’s Gatekeeper process have stalled or died entirely. Most substantially, a proposal to redevelop Sequoia Station with as many as 631 new homes has collapsed, with the prior owner selling off the property and abandoning their plans for deeply affordable homes and extensive and expensive transportation improvements.
Policy choices, just as much as the economic environment, continue to define housing outcomes. Several cities in the Bay Area, like Mountain View and Emeryville, saw a more normal rate of development in 2023, each approving more than 300 new homes. Through their housing elements, these cities rezoned for substantially more homes and streamlined their entitlement process faster than any jurisdiction in San Mateo County.
Though San Mateo County cities recently updated their housing elements with more pro-housing policies, many did not account for the impact of rising interest rates. As a result, many housing elements made changes around the edges of their planning processes but did not pursue wholesale reform. Receiving entitlements can still take years; even after a city council approves a development, behind-the-scenes staff work can also take months or years; impact fees continue to rise, all leading to an intolerable degree of uncertainty in a high-interest-rate environment.
Moving forward, San Mateo County jurisdictions can choose to eliminate or reduce the barriers that make building housing more difficult, going beyond the moderation of their housing elements. Eliminating arbitrary restrictions like Floor Area Ratios or maximum lot coverage requirements can increase flexibility for developers. Reducing fees increases the spectrum of what can be built. And approving more projects ministerially, reducing need for time-consuming public hearings and the expensive burden they impose on staff, can ensure builders quickly move from entitlement to development.
If local jurisdictions are not on track to meet their Regional Housing Needs Allocation goals by 2027, approvals for housing automatically become ministerial. HLC remains committed to help cities maintain their local control by adequately planning for housing on their own.