Development Services Review. Final Report. Zucker July 2016

RDCS process between Fiscal Year (FY) 2002/2003 – FY 2012/2013.” Interestingly, in a separate Housing and Population White Paper, it was estimated that Morgan Hill only added approximately 170 units per year between 2000 and 2013, which is less than the 244 average housing allocations granted by the City. The disparity is explained in The Growth Management White Paper, which points out that unit’s allocation from Fiscal Year (FY) 2002/2003 to FY 2012/2013 did not always result in building permit issuance, as some applicants were unable to secure project funding due to the national recession. For example, from 2006 through 20011, the number of allocations granted exceeded building permits. On the other hand, there were years during this ten-year period (e.g., 2002-2005), where the number of building permits issued outpaced housing unit allocations because some older allocations were finally being exercised and absorbed. The Paper also highlights the fact that building permit issuance for RDCS allocations increased dramatically from 2011 to 2012 (e.g., from 98 to 431 permits), as developers again began to exercise older allocations due to favorable market conditions. Table 13 below, shows the allotments granted for FY 2013/14 through 2017/18. Table 13 RDCS Allotment Activities As the above table shows, the number of allotments granted each year can vary because they are determined, biennially, using the California Department of Finance's (CDF) most recently determined persons per household figures and population for the city of Morgan Hill. CDF’s population estimate is adjusted for any relevant housing backlog not included in its population estimate, the population of any existing county subdivision enumerated in subsection 18.78.030(A) that has been annexed, and any other quantifiable factor that improves the accuracy of the estimate. The adjusted population is then subtracted from forty-eight thousand, the result divided by CDF’s most recently determined figure for persons per household in Morgan Hill, and then divided by the number of years remaining between that population estimate date and 2020. This gross annual allotment number is then reduced for any fiscal year by its previously awarded allotments (awarded in prior years) and the number of exempt units anticipated for that fiscal year. Planning Division Function RDCS Allotments FY 2013/14 FY 2014/15 FY 2015/16 FY 2016/17 FY 2017/18 5-yr Average 197 270 37% 270 242 242 244 % Change - 0 -10% 0 -

The biennial allotment calculation applies to each fiscal year after the fiscal year in which it is computed. For example, the Spring 2004 computation was used to set the

Morgan Hill, California

88

Zucker Systems