Methods of Demonstrating Substantial Evidence for the Redevelopment of Non-Vacant Housing Sites

As I discussed last week, State law requires that cities that accommodate more than 50% of their housing growth needs on non-vacant land provide “substantial evidence” that the existing uses on each parcel will discontinue within the eight year planning period. The California Department of Housing and Community Development defines substantial evidence as “facts, reasonable assumptions predicated upon facts, and expert opinion supported by facts.” Cities are using a number of methods for showing this substantial evidence.

The most sure-fire way to demonstrate substantial evidence is by providing letters from the property owners stating that they are interested in redevelopment their property for housing. Unfortunately, most property owners are unwilling to provide such a letter, and in fact will stymy attempts to use their property as a housing site or will make unreasonable demands because they think the city is desperate and they can negotiate their way to a windfall profit. Too often, property owner letters are simply not possible or viable to acquire to show substantial evidence.

However, property owner letters are not the only way to show substantial evidence. If cities can show a recent history of non-vacant parcels being redeveloped into housing, then it is possible to make the reasonable assumption that other similar non-vacant parcels will also be redeveloped in the future. This falls under the “reasonable assumptions predicated upon facts” part of the definition of substantial evidence.

Unfortunately, many cities do not have this history of redevelopment to use as substantial evidence of future redevelopment. In this case, the final way cities are meeting their housing goals is by simply not meeting the substantial evidence burden. In these cases, cities simply state that existing buildings are old and outdated, so existing uses are likely to discontinue, without any history of this happening previously in the city. It is unclear how the California Department of Housing and Community Development (HCD) has accepted some of these justifications that cities have used. In any case, relying upon substantial evidence justifications that have successfully been used elsewhere, but don’t meet the letter of the law are unreliable strategies for other cities to pursue.

Many cities have still been able to rely upon the use of government owned surplus land or property still owned by their redevelopment successor agencies to accommodate the majority of their housing growth needs. While many cities still have sufficient land that they own for this to be a viable strategy during the 6th Cycle for housing elements, it is a finite resource that won’t be available during the 7th Housing Element Cycle. In the future, many more cities will be faced with the challenge of providing substantial evidence that non-vacant sites will be used for housing production.

Unless HCD starts accepting other ways to demonstrate substantial evidence, many cities will not be able to show that they can meet their housing production goals in their 7th Cycle Housing Elements. While relatively few cities are faced with this challenge today, it is going to be a challenge for many in a few years.