AGENDA TITLE:
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Receive and File an Informational Report Regarding Corrections to the City's 2024 and 2025 Housing Element Annual Progress Reports (CD)
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MEETING DATE:
June 17, 2026
PREPARED BY:
Cynthia Marsh, Interim Community Development Director
recommendation
RECOMMENDED ACTION:
Receive and File an Informational Report Regarding Corrections to the City's 2024 and 2025 Housing Element Annual Progress Reports
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BACKGROUND INFORMATION:
California Government Code Section 65400 requires all jurisdictions in the State of California to prepare and submit an Annual Progress Report (APR) regarding implementation of their adopted Housing Element. The APR is a standardized reporting document developed and maintained by the California Department of Housing and Community Development (HCD) and completed annually by every city and county in the state.
The APR is not a City-created report. Rather, it is a state-mandated reporting form consisting of multiple Excel tables, formulas, and macros established by HCD. Jurisdictions are required to report housing entitlement applications received, entitlements approved, building permits issued, Certificates of Occupancy issued, and progress toward implementation of Housing Element programs. Due to the complexity of the reporting workbook and the extensive use of formulas and macros, it is common for jurisdictions to identify and correct data discrepancies following annual submittals.
Following City Council approval on March 18, 2026, and submission of the 2025 Housing Element Annual Progress Report, staff conducted additional reconciliation of residential permit data while reviewing Housing Element reporting information. During that process, staff identified discrepancies between the residential permit activity reported in the APR and the information reflected in the City's permit tracking system, TRAKiT.
Staff subsequently conducted a detailed review of permit records and reporting methodologies within the City's permitting software. The review determined that the discrepancies were attributable to the configuration of reports previously established within the software for APR reporting purposes. The issues involved the manner in which permit issuance and permit finalization data were queried and extracted from the system and were not the result of inaccurate permit records, data entry errors, or incorrect permit inspections.
To ensure the accuracy of the revised data, staff conducted a permit-by-permit reconciliation of residential building permit records associated with the affected reporting periods. Because permit records may be affected by expirations, cancellations, reissuances, ownership transfers, status changes, and other administrative actions, staff did not rely solely on automated report generation to develop the revised totals. Instead, staff manually reviewed residential permit activity to verify both building permits issued and Certificates of Occupancy issued during the reporting years.
A building permit is considered "issued" when the City authorizes construction to begin. Permit issuance reflects development activity and a builder's intent to construct housing units; however, an issued permit does not guarantee that construction will occur or be completed. By contrast, a Certificate of Occupancy is issued only after construction has been completed, all required inspections have been passed, and the dwelling unit is authorized for occupancy. Certificates of Occupancy therefore represent completed housing units and are generally considered the most reliable measure of actual housing production.
Because building permits issued and Certificates of Occupancy measure different stages of the development process, the numbers reported in a given year do not necessarily correspond to one another. Housing units receiving Certificates of Occupancy in a given year may have been permitted in prior years, while permits issued during a reporting year may not result in completed housing units until future years.
This verification effort required a detailed review of residential permit activity across multiple reporting years and confirmed that the APR underreported certain residential permitting and housing production activity. Staff subsequently consulted with HCD's Annual Progress Report team regarding the appropriate corrective action. Based on the reconciliation and discussions with HCD, staff determined that revisions to the City's 2024 and 2025 Annual Progress Reports were warranted. The corrected data has since been incorporated into the City's current Housing Element Annual Progress Report records.
The permit-by-permit reconciliation resulted in the following corrections:
|
Reporting Year |
Previously Reported Issued Permits |
Corrected Issued Permits |
Difference Issued Permits |
Previous Certificates of Occupancy (Finaled Permits) |
Corrected Certificates of Occupancy (Finaled Permits) |
Difference Certificates of Occupancy (Finaled Permits) |
|
2025 |
66 |
178 |
+112 |
243 |
243 |
- |
|
2024 |
180 |
259 |
+79 |
68 |
326 |
+258 |
As shown above, the reconciliation identified underreporting in both residential building permits issued and Certificates of Occupancy reported in prior Annual Progress Reports. The corrected data indicates that residential development activity and housing production during the reporting period were substantially higher than originally reported.
The corrected data also provides additional context regarding local housing market conditions. While residential construction activity has continued within the City, staff has observed through discussions with local developers and builders that higher mortgage interest rates, elevated construction costs, affordability challenges, and slower housing absorption rates have contributed to a more cautious development environment than existed in prior years. These broader market conditions continue to influence the pace at which residential projects are permitted, constructed, sold, and occupied.
As part of the review associated with this correction, Community Development staff met with the City's Information Technology Division to discuss permitting system functionality, reporting capabilities, and future departmental technology needs. Through that process, staff identified opportunities to improve report validation procedures and strengthen quality control measures for future state-required reporting.
The City's current permitting software platform, TRAKiT (Central Square Technologies), is scheduled for contract renewal within the next two years. In advance of that decision, Community Development and Information Technology staff plan to evaluate available permitting software solutions and reporting capabilities to determine the most effective long-term option for the City. As part of this effort, staff intends to engage with peer jurisdictions utilizing both TRAKiT and alternative permitting platforms to better understand system performance, reporting functionality, implementation considerations, and best practices. Information gathered through this process will assist the City in determining whether to continue with the current platform or pursue a competitive procurement process for an alternative solution.
In addition to evaluating future software options, staff has implemented supplemental verification procedures for Housing Element Annual Progress Report preparation, including manual reconciliation of residential permit activity prior to submittal. Staff will continue coordinating with HCD to ensure future reports accurately reflect permit activity.
Applicability of Corrections to Prior Housing Element Cycles
Because the correction has already been completed in coordination with HCD, staff is providing this informational report to ensure transparency and to notify the City Council and public of the correction.
During its review, staff evaluated whether similar reporting methodology issues may have affected Annual Progress Reports submitted during the City's previous 5th Cycle Housing Element planning period. While prior reports may have been subject to similar reporting limitations, staff determined that corrections to those reports are neither necessary nor warranted.
Annual Progress Reports are submitted as year-specific reports associated with a particular Housing Element planning cycle. The City's 5th Cycle Housing Element planning period has concluded and is no longer the operative Housing Element for purposes of State housing law. The City adopted its 6th Cycle Housing Element in March 2024, and the document was subsequently certified by HCD in April 2024. The 2024 and 2025 Annual Progress Reports are associated with the City's currently certified Housing Element and therefore represent the active reporting period.
Staff determined that correcting the Annual Progress Reports associated with the City's current 6th Cycle Housing Element appropriately addresses the identified reporting discrepancies and ensures that reporting associated with the City's active Housing Element remains accurate. HCD did not request revisions to Annual Progress Reports associated with the closed 5th Cycle Housing Element, and staff is not proposing any amendments to those reports.
CONCLUSION
Staff identified discrepancies in the methodology used to extract residential permit activity data from the City's permitting software and subsequently completed a permit-by-permit reconciliation of residential building permits and Certificates of Occupancy. Following consultation with HCD, the City corrected the affected Annual Progress Report data associated with the current Housing Element cycle.
The corrected data reflects higher levels of both residential permitting activity and housing production than originally reported. Staff is providing this informational report to ensure transparency regarding the correction and to outline the process improvements being implemented to strengthen future state-required reporting efforts.
FISCAL IMPACT:
Not applicable.
FUNDING AVAILABLE:
Not applicable.