REPORT TO COUNCIL
SUBJECT
Title
Approve the 2025 Housing Element Annual Progress Report
Report
BACKGROUND
California Government Code Section 65400 (“Section 65400”) requires cities and counties to submit an Annual Progress Report (APR) to the State by April 1 of each year. APRs must be submitted to two State agencies: Governor’s Office of Land Use & Climate Innovation (LCI), previously known as Office of Planning and Research (OPR), and Department of Housing and Community Development (HCD). The APRs describe each jurisdiction’s progress in implementing the housing elements of their General Plans.
EXISTING POLICY
2023-2031 Housing Element
Goal H-1: Provide adequate sites for the development of new housing through appropriate land use and zoning to address the diverse needs of Sunnyvale’s residents and workforce.
Community Vision
Policy CV-1.2: Provide accurate and thorough information in a timely manner to ensure that community members have an opportunity to respond effectively.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15378(b)(5) in that it is a governmental organizational or administrative activity that will not result in direct or indirect changes in the environment.
DISCUSSION
The Housing Element APR (Attachment 1) outlines the City’s accomplishments for each calendar year that contribute toward meeting its Regional Housing Needs Allocation (RHNA) and Housing Element program objectives. The 2025 APR measures housing production and program accomplishments during the calendar year. This data will be counted towards the Sixth Cycle (2023-2031) RHNA Projection Period, which began on June 30, 2022, and ends on December 31, 2030.
Housing Production and Unit Affordability
For each housing unit included in the APR, the City indicates the affordability level by income category and whether the unit is deed restricted. With the passage of Assembly Bill (AB) 3039 in 2024, the 2025 APR now includes new income categories for units that are affordable to Acutely Low-Income households (up to 15% of Area Median Income [AMI]) and Extremely Low-Income households (between 15% and 30% of AMI). Because the City’s Sixth Cycle RHNA was determined prior to the passage of AB 3039, the City does not have allocated RHNA targets for these income levels. As a result, any units reported in these new categories will be counted towards the City’s Very Low-Income (between 30% and 50% AMI) RHNA progress.
The City considers half of all market-rate rental housing units to be Non-Deed Restricted Moderate-Income units that are affordable to households earning up to 120% of AMI. The other half of market rate rental units are considered Above Moderate-Income units. This assumption aligns with the City’s Adopted 2023-2031 Housing Element and is supported by rent data from recently constructed housing projects. To determine affordability of Accessory Dwelling Units (ADUs), the City uses the recommendations of the Association of Bay Area Government’s (ABAG) ADU Affordability Survey Findings and Recommendations, which was published in 2026 (Attachment 2). Based on its survey findings, ABAG recommends jurisdictions categorize 30% of ADU units as affordable to Very Low-Income households, 30% as Low-Income, 30% as Moderate-Income, and 10% as Above Moderate-Income. These assumptions have been approved by HCD for use in the 2025 APR.
The APR includes a summary report of housing production, planning, and building permits during the calendar year and summarizes details such as affordability, structure type, and application type. Subsequent tables include more detailed information about each project. Due to the complexity and formatting limitations of some APR tables, a summary of each table/report is provided below.
Table A in the APR shows the number of housing units for which a planning application was determined complete in a calendar year. An “application” is defined as a formal submittal of a project for approval., Applications not deemed complete are excluded. Table A also includes building permit applications for ADU projects submitted under the City’s streamlined ADU approval process. Since this process does not require a planning application, the building permit application must be recorded in Table A, per HCD instructions. A summary of Table A is below:
Table A2 provides a detailed view of net new housing units and developments that have received any one of the following in the calendar year:
• An approved planning application (“Units Issued Entitlements”);
• An issued building permit (“Units Issued Building Permits”); or
• A certificate of occupancy (“Units Finaled”).
This table illustrates how projects move through the planning and building permitting process and tracks the City’s progress towards meeting its RHNA goals. Housing units are counted towards the RHNA when a building permit is issued. Table A2 also documents whether projects take advantage of State housing laws such as State density bonus and streamlining provisions such as Senate Bill (SB) 9, which streamlines the residential lot split process. A summary of Table A2 is provided below:
Although planning entitlements and issued building permits declined in 2025 compared to prior years, the number of finaled building permits increased significantly with 1,412 units completed. For comparison, between 2018 and 2024, the City averaged 605 finaled units annually. The high number of finaled building permits in 2025 was driven primarily by the completion of several large multifamily projects completing construction within the calendar year including the Martin (479 units, 240 S. Taaffe St.), Hartwood (412 units, 401 Willow Ave.), and MidPen Housing’s Ira D. Hall Square (176 units, 1178 Sonora Court).
Table A2 also shows that 2025 was Sunnyvale’s strongest year for ADU production to date. In 2025, 72 ADUs were finaled, 107 received building permits, and 41 received planning entitlements. For comparison, between 2020 and 2024 the City averaged 54 ADUs finaled, 66 ADU permits issued, and 40 ADUs entitled. As noted above, the City’s streamlined permitting process allows certain ADU projects to proceed with only a building permit, reducing the number of projects requiring planning entitlements. The City continues to expand its ADU resources, including updates to the ADU brochure in June 2025, publication of a standalone ADU webpage in November 2025, and publication of the ADU Toolkit in January 2026. These resources build on the pre-approved ADU plans gallery webpage launched in December 2024, which now features 12 pre-approved ADU plans to further streamline the ADU permitting process for homeowners.
Table B is a summary of all permitting activity for the Sixth Cycle (2023-2031) Housing Element Projection Period, beginning June 30, 2022, to the end of calendar year 2025. This table reports the number of units for which building permits were issued to show progress in meeting the City’s share of RHNA by income level. A summary of the City’s RHNA progress is provided below:
As of December 31, 2025, the 2023-2031 Housing Element cycle is 41% complete and the City has issued building permits for 1,936 units, or 16% of the City’s total RHNA. Although the City’s RHNA progress is currently below the proportional pace of the Housing Element cycle, it is important to note that the City is required to plan and accommodate for the RHNA but is not required to build the units. With recently adopted specific plans such as El Camino Real Specific Plan, Lawrence Station Area Plan, and Moffett Park Specific Plan, the City has created significant capacity for housing units that exceeds the remaining RHNA. In accordance with State law, City staff regularly tracks housing production and remaining Housing Element sites to ensure that the City has adequate capacity to meet its remaining RHNA. It is also important to note that building permits may lag entitlements by a year or more depending on the scale of the project, economic conditions, and other factors. Current development activity indicates a strong pipeline, and 2026 is expected to meet or exceed 2025 numbers. As of February 24, 2026 (not even 2 months into the year) there are about:
• 1,300 units with Preliminary Applications only
• 2,600 units with Formal Applications
o Over 40% of these units are deed restricted affordable units
o Several sites will have public hearings scheduled soon
• 400 units already entitled in 2026
• 1,600 entitled units from prior years that can submit building permit applications
Table C identifies sites or rezoned land used to accommodate a shortfall of RHNA sites and serves as an addendum to the Housing Element Sites Inventory. Because the Moffett Park Specific Plan was not adopted before the start of the Sixth Cycle (2023-2031) Housing Element, the City had a shortfall of 1,535 Lower-Income units and 3,280 Above Moderate-Income units at the beginning of the Housing Element cycle. Table C also includes Village Center sites that were rezoned in 2025 as part of Housing Element Program H3 (Increase Affordable Housing Opportunities in High Resource Areas). The City increased allowed residential densities for several Village Center sites to 30 dwelling units per acre or higher, which allows the City to increase its lower-income RHNA capacity by 309 units in areas of high and highest resource as determined by HCD opportunity area map. Table C will continue to include these rezoned Moffett Park and Village Center sites throughout the remainder of the Housing Element cycle.
Table D provides an update on the City’s progress toward achieving the housing programs listed in the Implementation Plan of the Sixth Cycle (2023-2031) Housing Element. For the 2025 APR, HCD now requires additional reporting to quantify program outcomes, including the type of outcome (such as units, households, persons served, meetings held, or other measurable results) and the number of outcomes achieved to date. This additional detail is intended to help HCD better track the implementation of programs the City has committed to enacting in its adopted Housing Element.
Table E provides information on commercial developments that were approved with development bonuses in exchange for providing affordable housing. The City did not receive any commercial applications requesting bonuses during the reporting year.
Table F provides the number of affordable housing units that were substantially rehabilitated, acquired, and/or preserved, only if such projects were included as objectives in the Housing Element. This table is not applicable to the City since rehabilitation projects are not identified as a method to meet the RHNA requirement in the Housing Element.
Table F2 shows the Above Moderate-Income units that were converted to Moderate-Income units through deed restrictions. No Above Moderate-Income units were converted in the reporting year.
Table G provides an inventory of City-owned properties in the Housing Element Sites Inventory that were leased or sold in the calendar year. The City continued to lease the 1178 Sonora Court, 1171 Sonora Court, and 295 S Mathilda properties to MidPen Housing for current and future affordable housing developments.
Table H is an inventory of City-owned surplus lands. This table includes the 1171 Sonora Court property and 295 S Mathilda property. Each property was declared to be exempt surplus land on the basis that the site will be developed as affordable housing.
Table I has been removed from the APR by HCD.
Table J shows any student housing projects that were granted a density bonus. There were no student housing projects with a density bonus in 2025.
Table K requires local governments that have adopted a local tenant preference policy to create a webpage with information about their policy and report this information on their APRs. The City does not have an adopted local tenant preference policy.
Table L was newly added for the 2025 APR. This table requires cities and counties to provide a list of all historic designations listed on the National Register of Historic Places, the California Register of Historic Resources, or a local register of historic places by the city or county in the past year, and the status of any housing development projects proposed for the new historic designations. The City did not register any historic designations in 2025.
The LEAP Reporting tab includes a summary of the City’s use of the Local Early Action Planning (LEAP) grant, which is administered by HCD, as well as a summary of entitlements, building permits issued, and permits finaled for the calendar year.
Lastly, the Low-Moderate Income Housing Funds (LMIHAF) report is required by California Health and Safety Code Section 34176.1 for a city that has assumed the housing function of a former redevelopment agency (“housing successor agency”) and is responsible for administering housing set-aside funds, now known as Low-Moderate Income Housing Funds (LMIHAF). The City is the housing successor agency for the former Redevelopment Agency of the City of Sunnyvale. Attachment 3 provides data on the Sunnyvale Housing Successor Agency’s activities and finances in fiscal year 2024/25. The City continues to meet the Extremely Low Income test, the Senior Housing Test, and Excess Surplus Test.
FISCAL IMPACT
Approval and submittal of the APR is required by State law and will assist the City in qualifying for State funding opportunities. Otherwise, as the report is primarily for informational purposes, this action does not have any direct fiscal impact.
PUBLIC CONTACT
Public contact was made by posting the Council meeting agenda on the City's official-notice bulletin board at City Hall, at the Sunnyvale Public Library and in the Department of Public Safety Lobby. In addition, the agenda and this report are available at the City Hall reception desk located on the first floor of City Hall at 456 W. Olive Avenue (during normal business hours), and on the City's website.
ALTERNATIVES
1. Approve the 2025 Housing Element Annual Progress Report and direct staff to submit it to the Governor’s Office of Planning and Research and the California Department of Housing and Community Development.
2. Approve the 2025 Housing Element Annual Progress Report with modifications, and direct staff to submit it to the Governor’s Office of Planning and Research and the California Department of Housing and Community Development.
STAFF RECOMMENDATION
Recommendation
Alternative 1: Approve the 2025 Housing Element Annual Progress Report and direct staff to submit it to the Governor’s Office of Planning and Research and the California Department of Housing and Community Development.
JUSTIFICATION FOR RECOMMENDATION
All local jurisdictions, including charter cities, are required to submit the APR to the Governor’s Office of Planning and Research and the California Department of Housing and Community Development by April 1 of each year. Staff recommends Alternative 1 in order to maintain the City’s compliance with State law (i.e., Health and Safety Code Section 34176.1 and Government Code Section 65400).
Levine Act
LEVINE ACT
The Levine Act (Gov. Code Section 84308) prohibits city officials from participating in certain decisions regarding licenses, permits, and other entitlements for use if the official has received a campaign contribution of more than $500 from a party, participant, or agent of a party or participant in the previous 12 months. The Levine Act is intended to prevent financial influence on decisions that affect specific, identifiable persons or participants. For more information see the Fair Political Practices Commission website: www.fppc.ca.gov/learn/pay-to-play-limits-and-prohibitions.html
An “X” in the checklist below indicates that the action being considered falls under a Levine Act category or exemption:
SUBJECT TO THE LEVINE ACT
___ Land development entitlements
___ Other permit, license, or entitlement for use
___ Contract or franchise
EXEMPT FROM THE LEVINE ACT
___ Competitively bid contract*
___ Labor or personal employment contract
___ Contract under $50,000 or non-fiscal
___ Contract between public agencies
_X_ General policy and legislative actions
* "Competitively bid" means a contract that must be awarded to the lowest responsive and responsible bidder.
Staff
Prepared by: Ryan Dyson, Housing Specialist II
Reviewed by: Amanda Sztoltz, Housing Officer
Reviewed by: Trudi Ryan, Director of Community Development
Reviewed by: Connie Verceles, Deputy City Manager
Approved by: Tim Kirby, City Manager
ATTACHMENTS
1. 2025 Housing Element Annual Progress Report
2. 2026 ADU Affordability Survey Findings and Recommendations
3. Housing Successor Agency Annual Report on the Low-Moderate Income Housing Asset Fund (LMIHAF) FY 2024/25