Performance, not promises should inform regional housing incentives

While the Bay Area continues to suffer from a severe housing shortage and a congested transportation system, the Metropolitan Transportation Commission’s One Bay Area Grant (OBAG) program offers one funding mechanism for integrating regional transportation and housing goals. One of the objectives of the OBAG program, designed to fund transportation and infrastructure projects, is to “reward jurisdictions that accept housing allocations through the Regional Housing Need Allocation (RHNA) process.”

The RHNA process identifies the total number of new housing units that the Bay Area needs in each city; however, few jurisdictions have been able to hit their targets. For example, in the 2007-2014 RHNA cycle, only seven of the region’s 101 cities accomplished their housing production goals. While this RHNA period occurred within a deep recession and followed a Bay Area housing boom, recent housing production is falling well short of keeping up with demand. To enhance the program’s incentive to build housing, OBAG funds should reward cities that achieve their RHNA targets by actually building new units—as opposed to only accepting housing allocations. Moreover, there should be consequences for cities that fail to permit the required number of new housing units. The OBAG program is currently being revised by MTC for its second iteration of Plan Bay Area, and the Bay Area Council is calling for an emphasis on performance rather than promises. To engage in the Council’s housing policy work, please contact Senior Vice President of Policy Matt Regan.