A tale of two cities: Needles and Rohnert Park’s pro-housing journeys

Jun 5, 2024

Guest article by Jackie Krentzman, freelance writer and editor

Just what makes a community “pro-housing?” Although the answer can vary, the state has introduced one possible standard: the Prohousing Designation Program. So far, 40 cities have earned the designation by showing their willingness to “cut through red tape, reduce construction and development costs, and create housing policies with a growth mindset.”

What that looks like in practice can vary from community to community. Two of those cities, the isolated desert community of Needles in San Bernardino County and Rohnert Park in Sonoma County, have taken very different journeys.

From housing desert to housing oasis? 

Very few cities are as geographically challenged as Needles, a city of 5,200 on the border of California, Arizona, and Nevada. Developers have not built a new housing tract in the city since 1990, largely because the city’s remote location makes it challenging to attract contractors and investment from homebuilders. The city doesn’t qualify for rural housing support programs since it’s located in San Bernardino County, which is classified as urban.

The city began focusing on economic development after suffering significant revenue losses from retailers closing. The decline began in the 1980s after the interstate diverted traffic away from Route 66. The city’s proximity to Arizona, where prices tend to be lower, further hurt its commercial endeavors.

Then in 2019, the Department of Housing and Community Development (HCD) and Gov. Gavin Newsom notified Needles that it was out of compliance with state housing element law. The Governor had signed a package of housing bills the year previously, which penalized Needles and other non-compliant cities.

Needles, which last adopted a housing element in 2005, turned its full attention to updating its housing policies. The need was acute. The city’s business-friendly environment had attracted the cannabis industry, bringing both jobs and a demand for housing.

It was also a daunting goal. It would take $1.2 million to achieve compliance with an update to the city’s General Plan. The city’s total budget was approximately $5.5 million. (It has since doubled to almost $13 million.)

Needles streamlined its processes, reduced development impact fees, and increased allowable density in single-family zoned residential areas. In 2019 — the same year it was notified — the city qualified for a state planning grant that provided technical assistance and helped the city to achieve compliance. That in turn helped Needles bring in a series of grant dollars, totaling nearly half a million dollars.

“That changed everything,” said City Manager Patrick Martinez, who made housing compliance one of his core priorities when he joined in 2017.

Needles became one of the first cities in San Bernardino County to complete the sixth housing element cycle in 2023. This success attracted the notice of the Institute for Local Government (ILG), which gave it a standing ovation at a housing workshop.

“Representatives from HCD said: ‘You have been our golden child, going from being on the naughty list to receiving a half million in grants to get into compliance,” Martinez noted.

The city then earned the state’s prohousing designation in 2023. That allowed the city to secure $445,000 in state funds, which it directed to affordable housing incentives for developers, a first-time homebuyers program, and joining the San Bernardino Regional Housing Trust.

To further its housing goals, the city plans to marry these funds with growing tax revenues. In 2012, Needles voters overwhelmingly voted to tax cannabis business income and regulate the industry. Manufacturing, distribution, and cultivation facilities soon mushroomed, as did dispensaries. Cannabis sales tax revenue soared to new highs in 2022, from $14,920 to $4.8 million.

This growth has allowed the city to build substations, pave roads, and upgrade its aging water infrastructure — things needed to attract residents and builders. The city also funds non-cannabis businesses, including housing development, through an economic development fund.

Yet, Needles still has a long way to go. The industry has created roughly 600 new jobs, out of 2,000 total jobs in the city. However, most of those employees can’t find housing in Needles and are forced to commute long distances from Nevada or Arizona. And despite the city’s meeting its housing cycle goals, there's no guarantee that those goals will translate into homes. Needles has nearly 60 zoned lots available, but the costs are prohibitive for homebuilders.

Martinez estimates that the average sales price of a home in Needles is $250,000, but costs $300,000 to build. He urges the state government to recognize the unique needs of rural cities like Needles.

“We are thankful for the funds we have received,” Martinez said. “But rural communities like ours are at a disadvantage. We need state subsidies more than bigger cities because market-rate development doesn’t pencil out.”

Still, Martinez and Utility Manager Rainie Torrance, are optimistic that Needles is on a continuing upward trajectory.

“I have lived in Needles since I was two and I am raising my children here,” said Torrance. “I am hopeful for our future, proud of what we have been able to provide to the community. If we keep on the path we are going, development will come, and we will see new housing, new residents, and even more schools. The sky’s the limit for us.”

Rohnert Park: planning is in its DNA

Rohnert Park is perhaps a more familiar tale for some. In 1962, the Sonoma County community was incorporated as a planned city with 2,700 residents clustered in neighborhoods near schools and parks. But like many other cities during the 2007 economic downturn, it struggled to promote housing development. In fact, between 2007 and 2014, Rohnert Park issued no permits for new housing.

However, Rohnert Park (now 45,000) has made tremendous progress in the last decade. It has issued 1,972 new housing permits (300 affordable), far exceeding its state-mandated target of 899 units for the past eight years. The city has another 3,000 planned housing units in the pipeline. Many of these units are in three new, distinct neighborhoods: University District, Willowglen, and SOMO Village. Each development includes a park, market-rate and affordable housing units, and access to neighborhood retail.

Rohnert Park’s history as a planned community played a significant role in its ability to meet its housing goals. The city long had a robust general and specific housing plan, which means the sites that can accommodate housing have already been studied and approved.

“This prework provides certainty for developers and streamlines the development process,” said Housing Manager Jenna Garcia. “Our city council has always been very engaged in the long-term vision for how the Rohnert Park is being developed and has long prided itself on being developer friendly.”

The city also has gone above and beyond the state’s requirements by requiring that 15% of all new developments over 50 units be affordable. In 2022, Labath Landing — a 60-unit city-owned and sponsored interim housing project funded in part through the State’s Homekey program — opened. The city promotes affordable housing developments throughout the city and partners with the nonprofit Housing Land Trust of Sonoma County for an affordable ownership program.

“We've enjoyed tremendous success in the region and have developed a strong relationship with the city of Rohnert Park and its commitment to providing much-needed affordable housing to residents," said Geoff Brown, president of USA Properties Fund.

For these efforts, Rohnert Park earned the state’s prohousing designation in 2023. This designation made the city more competitive for several state funding programs, including Affordable Housing and Sustainable Communities, Infill Infrastructure Grant, and Transformative Climate Communities.

The designation and the funding it unlocks will improve the city’s ability to fulfill its vision of a robust downtown. For many years, residents have asked the city to create a vibrant mixed-use downtown district — a “heart” for Rohnert Park. In 2022, the city purchased a 30-acre parcel near the Sonoma-Marin Area Rail Transit train station as the site for the future downtown. This new, walkable heart of Rohnert Park will include 300 to 500 residential units, a quarter of which will be affordable. Residents will also have access to a range of food, beverage, art, and retail options, an upscale hotel, walkable streets, and a central community square.

“The fact that the state has recognized our efforts is extremely gratifying and a major milestone that will allow us to build upon our ongoing commitment to housing development for all Rohnert Park residents," said Mayor Susan Hollingsworth Adams. “We are committed to developing a vibrant community where residents have access to safe and affordable housing, both in our welcoming neighborhoods and in the coming years, a dynamic downtown.”

The Cal Cities #LocalWorks initiative shines the spotlight on examples of local actions that are making a difference to their communities. Show how #LocalWorks in your community by contacting communications@calcities.org.