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HomeMy WebLinkAboutItem 3 - GENP-0217-2020 & EID-0218-2020_Housing Element UpdatePLANNING COMMISSION AGENDA REPORT SUBJECT: Review of the 6th Cycle Housing Element Update Proposed Policies and Programs PROJECT ADDRESS: Citywide BY: Rachel Cohen, Associate Planner Phone Number: (805) 781-7574 E-mail: rcohen@slocity.org FILE NUMBER: GENP-0217-2020 & EID-0218-2020 FROM: Tyler Corey, Principal Planner 1.0 RECOMMENDATION Review the proposed policy and program changes to Chapter 3 of the Housing Element and provide comments or direction as appropriate. 2.0 SITE DATA 3.0 SUMMARY Over the last year, the City of San Luis Obispo, as well as the County and other cities within the County have been in the process of updating their Housing Elements based on the new 6th Cycle Regional Housing Needs Allocation (RHNA) requirements from the State of California Department of Housing and Community Development (HCD). Staff is proposing revisions to Chapter 3 of the Housing Element. This chapter contains new policies and programs, revised policies and programs, and policies and programs that are proposed to remain without substantive changes. Additions or changes have been recommended where appropriate to reflect the changing needs, resources, and conditions in the community, and to respond to changes in housing law. Proposed changes are shown in legislative draft format (Attachment 1). 4.0 COMMISSION’S PURVIEW The Planning Commission is responsible for reviewing proposed changes to the General Plan and for making recommendations to the City Council under Government Code section §65353. The Planning Applicant City of SLO Representative Rachel Cohen, Associate Planner Zoning Multiple General Plan Multiple Site Area 8,598.8 acres Environmental Status Environmental review to be completed Meeting Date: June 10, 2020 Item Number: 3 Item 3 Packet Page 90 GENP-0217-2020 & EID-0218-2020 Page 2 Commission has two primary roles in the Housing Element update process: 1) provide a forum for public discussion and consensus building; 2) provide policy and program direction. The Draft Housing Element and associated environmental document must be considered by the Planning Commission in at least one public hearing before final action can be taken on the item. Staff anticipates this public hearing will occur in the summer once the City has received initial comments on the draft document from the State Department of Housing and Community Development (HCD). The Commission’s recommendation will then be forwarded to the City Council for final action on the Housing Element. 5.0 PROJECT INFORMATION The Planning Commission should review the legislative draft of Chapter 3 and provide comments or direction as appropriate (Attachment 2). Some of the more substantive proposed changes or additions are highlighted below for consideration, however, Planning Commissioners may comment and/or provide direction on any of the policies or programs. Where policies and programs appear to be meeting their objective and are recommended to be continued, no further discussion is needed. Where substantive changes or new policies or programs are proposed, a brief description follows to explain how the modification or addition better achieves housing goals or state requirements. Please note that the number references are for the original numbering and new numbering is provided in parentheses if applicable. New or Modified Goals, Policies, and Programs Since the 5th Cycle Housing Element, current housing issues, needs and opportunities have changed within the community of San Luis Obispo. Staff is recommending new and modified goals, policies and programs that reflect these changes. Modified - Program 2.15 (2.13) – Affordability. In March of 2020, the City completed the 2020 Affordable Housing Nexus Study (see Attachment B). The Study’s findings and recommendations indicate that the City’s Inclusionary Housing Ordinance needs to be updated to better reflect the correct proportion of inclusionary affordable units required as a part of new development within the City. This program has been added to recognize and prioritize this work effort. New - Program (2.15) – Affordability. This program was recommended in part by input from the community and the work program associated with the Housing Major City Goal. The community and Council identified that the Downtown and portions of Upper Monterey and Mid-Higuera Special Focus Areas could be appropriate for higher density housing development. The program seeks to evaluate how the City might allow flexible density beyond what is allowed in these areas to support the production of smaller units (150-600 square feet in size). Modified - 4.6 Program – Mixed-Income Housing. The Inclusionary Housing Ordinance was last reviewed in 2007. Based on community feedback, staff is recommending language be added to the program to include consideration and clarification regarding affordability (by unit type), location of affordable units (onsite, dispersion, off-site, etc.), equivalent size of units (number of bedrooms), and equivalent options to meet these requirements. This modification seeks to address concerns that projects meet inclusionary requirements with smaller units, units on a separate property, or units constructed by another entity. Modified - Goal 5 – Housing Variety. Staff is recommending that this goal, and several of the policies Item 3 Packet Page 91 GENP-0217-2020 & EID-0218-2020 Page 3 within, be modified to focus on housing variety rather than tenure which is covered under Goal 3: Housing Conservation. New - Policy (5.4) – Housing Variety. This policy is based on community feedback and the work program associated with the Housing Major City Goal to address the need for more housing. Missing middle housing types include duplexes, triplexes, quadplexes, cottages, etc. Policy 5.4 also replaces Program 2.16 which discusses workforce housing. Creating a workforce level of affordability was examined and found that it could not be successfully implemented on a citywide basis as there are no existing State standards for such an income level. Policy 5.4 sets the framework for the newly proposed Program 5.6. New - Program (5.6) – Housing Variety. To implement new Policy 5.4, this program proposes that the City evaluate ways in which to increase the number of housing units available to the missing middle by specifically exploring ways to promote specific housing types such as duplexes, triplexes, quadplexes, cottages, etc. Modified - Policy 6.8 (6.6) and Program 6.13 (6.12) – Housing Production. This policy and program were updated to encourage additional residential units not only in Downtown, but in Upper Monterey and Mid-Higuera Special Focus Areas consistent with the City’s Major City Goal work program and New Program 2.15. Modified - Goal 7: Neighborhood Quality. Staff is recommending that this goal be modified to focus on providing quality of life in neighborhoods, removing language associated with neighborhood stability and owner occupancy. This modified language is more consistent with Goal 7’s existing policies and programs that focus on amenities, outdoor space (public/private), walkability, access to transit, schools, parks, commercial centers, maintaining setbacks, and overall character and quality of established neighborhoods. Modified - Program 8.20 (8.18) – Special Housing Needs. AB 101 changed state law to require that homeless shelters, transitional housing and supportive housing (low barrier navigation centers) be allowed in all residential zones, areas zoned for mixed-uses, and nonresidential zones that permit multifamily uses. As such, staff is recommending Program 8.20 be updated for consistency with state law. Modified - Goal 10 – Local Preference. Based on community feedback and a need for more housing for local individuals who work in the City or nearby vicinity, staff is recommending Goal 10 be updated to focus on providing housing for individuals who are employed in business that are located in geographic areas that are customarily included in the City’s annual jobs-housing balance analysis. New - Policy 10.2 – Local Preference. This is a new policy that staff is recommending to support proposed revisions to Goal 10. This policy sets preferences for new for-sale housing developments in the initial offering and sales to improve the City’s jobs-housing balance, reduce competition from outside buyers and allow those that work in the City the opportunity to live in the City, thereby reducing commute times. New -Program 10.4 – Local Preference. Staff is recommending that the City continue to work with housing developers to limit for sale units to owner-occupants for the first five years after sale. This is a strategy that has been implemented as part of the Avila Ranch and San Luis Ranch projects to Item 3 Packet Page 92 GENP-0217-2020 & EID-0218-2020 Page 4 encourage local home ownership opportunities rather than outside investor properties. Removed Polices and Programs Over the last several years the City has been able to implement various policies and programs, as well as determine that other policies and programs no longer fit the current needs and issues of the community or no longer comply with new state regulations. As such, staff is recommending Goal 11, policies 3.3, 6.6, 8.3, 9.3, 11.1 and 11.2 and programs 3.8, 6.2 and 11.3 be removed from the 6th Cycle Housing Element. Zoning Regulations Update Several Policies and Programs within the housing element have either been modified or are recommended for removal because of the update to the Zoning Regulations in 2018. These programs include: Combined - Policies 5.2 & 5.3: Proposed to be combined into one policy that encourages mixed-use development, consistent with the Zoning Regulations update which no longer identifies live/work or work/live units separately from mixed-use. Removed - Policy 6.2 & Programs 6.22, 6.27, 6.28, 6.29. These are proposed to be removed as they are now included as requirements of the Zoning Regulations. Program 6.27 was evaluated as part of the Zoning Regulations update, and through that process staff determined that this program needs to be part of a larger update to the LUE and requires additional environmental analysis. Modified - 6.30 (6.22): This program was modified to remove references regarding the update of the Zoning Regulations and the PD zone as both were completed in 2018. AB 1600 and Fee Schedule Update Removed - Programs 2.8, 2.9, 6.29, 6.31, and 9.12. Fee reductions referenced in these programs were implemented as part of the AB 1600 fee study. 6.0 PUBLIC OUTREACH Over the past year, the City conducted public outreach to identify housing needs, issues and opportunities in the community. The primary goals of the outreach effort were to: •Actively engage the diverse populations of the City in discussions about housing needs. •Ensure that affected residents, housing providers, homeless services providers, and funding entities have opportunities to be actively involved in the process. Workshops and Meetings Staff facilitated public workshops and meetings over the past year. These included the following community workshops and meetings with the following groups and organizations: •Public Forum and City Council Meeting – April 2, 2019 •Planning Commission Meeting – April 24, 2019 •Association of Realtors – July 23, 2019 •Housing Element Workshop – December 10, 2020 •Online Survey – December 10, 2019 – January 10, 2020 •Chamber of Commerce – April 2, 2020 Item 3 Packet Page 93 GENP-0217-2020 & EID-0218-2020 Page 5 • Economic Vitality Corporation and the Home Builders Association – May 13, 2020 Staff compiled feedback from these workshops and meetings as well as other correspondence into three categories of criteria: needs, issues and opportunities. These categories were used throughout the public outreach process for consistency. The following is an overview of public feedback and comments received for each category, which have been considered and incorporated into Chapter 3 of the document where appropriate: Issues • Affordable housing • Insufficient number of housing units to rent or purchase • Not enough diversity in the types of housing • Higher density housing Needs • Affordable housing • Workforce (missing middle) housing • Housing for families • Student housing • Senior housing • Housing near employment • More housing Opportunities • Increase residential densities where appropriate, such as downtown • Provide more student housing on campus • Rehabilitate existing housing resources Next Steps The preliminary draft of Chapter 3 of the Housing Element has been sent to HCD for preliminary review and comment. Additionally, in lieu of an in-person workshop, the City is hosting an online survey for comments regarding the proposed revisions to Chapter 3 of the Housing Element. The survey will be available on the City’s Housing Element website prior to the Planning Commission meeting on June 10, 2020 at: https://www.slocity.org/government/department-directory/community- development/affordable-housing/housing-element. Staff will compile the comments from the Planning Commission, the community, and HCD and revise Chapter 3 and return to the Planning Commission with the entire revised Draft Housing Element for consideration this summer. 7.0 ENVIRONMENTAL REVIEW Staff is currently preparing an Initial Study of Environmental Review, which will be available when the entire Housing Element comes before the Planning Commission for formal consideration this summer. 8.0 ALTERNATIVES 8.1 Continue the item. An action to continue the item should include direction to staff on pertinent issues. Item 3 Packet Page 94 GENP-0217-2020 & EID-0218-2020 Page 6 9.0 ATTACHMENTS 1. Chapter 3 of the Housing Element (Legislative Draft) 2. 2020 Nexus Study Memo (the full Nexus Study can be found online here: https://www.slocity.org/home/showdocument?id=26476) Item 3 Packet Page 95 City of San Luis Obispo Housing Element, September 2020January 2015 P1 Chapter 3 GOALS, POLICIES AND PROGRAMS 3.10 Overview This chapter includes the Housing Implementation Plan for the for 6th Cycle Regional Housing Needs Allocation (RHNA) period January 2014 to June 2019. The following goals, policies and programs are based on an assessment of the City’s needs, opportunities and constraints; and an evaluation of its existing policies and programs. 3.20 Goals, Policies and Programs. This chapter describes the City’s housing goals, policies and programs, which together form the blueprint for housing actions during the Housing Element’s planning period. Goals, policies and programs are listed in top-to-bottom order, with goals at the top and being the most general statements, working down to programs, the most specific statements of intent. Here is how the three policy levels differ: ❑Goals are the desired results that the City will attempt to reach over the long term. They are general expressions of community values or preferred end states, and therefore, are abstract in nature and are rarely fully attained. While it may not be possible to attain all goals during this Element's planning period, they will, nonetheless, be the basis for City policies and actions during this period. ❑Policies are specific statements that will guide decision-making. Policies serve as the directives to developers, builders, design professionals, decision makers and others who will initiate or review new development projects. Some policies stand alone as directives, but others require that additional actions be taken. These additional actions are listed under “programs” below. Most policies have a time frame that fits within this Element’s planning period. In this context, “shall” means the policy is mandatory; “should” or “will” indicate the policy should be followed unless there are compelling or contradictory reasons to do otherwise. ❑Programs are the core of the City’s housing strategy. These include on-going programs, procedural changes, general plan changes, rezoning or other actions that help achieve housing goals. Programs translate goals and policies into actions. Attachment 1Item 3 Packet Page 96 City of San Luis Obispo Housing Element, July 2014September 2020 Goal 1: Safety Provide safe, decent shelter for all residents. Policies 1.1 Assist those citizens unable to obtain safe shelter on their own. 1.2 Support and inform the public about fair housing laws and programs that allow equal housing access for all city residents. 1.3 Maintain a level of housing code enforcement sufficient to correct unsafe, unsanitary or illegal conditions and to preserve the inventory of safe housing, consistent with City Council’s code enforcement priorities. Programs 1.4 Correct unsafe, unsanitary or illegal housing conditions, improve accessibility and energy efficiency and improve neighborhoods by Rehabilitate using Federal, State and local housing funds, such as Community Development Block Grant Funds, with the objectives of 30 single-family, 75 multi-family, 10 historic, and 20 mobile homes for extremely low, very low, low and moderate income homeowners and renters during the planning period. 1.5 Continue code enforcement to expedite the removal of illegal or unsafe dwellings, to eliminate hazardous site or property conditions, and resolve chronic building safety problems. 1.6 Consider a Rental Inspection Program to improve the condition of the City’s Housing Stock. 1.71.6 Continue to support local and regional solutions to homelessness by funding supportive programs services, and housing solutions such as the Maxine Lewis Memorial Shelter and The Prado Day Center. 1.81.7 Create an educational campaign for owners of older residences informing them of ways to reduce the seismic hazards commonly found in such structures, and encouraging them to undertake seismic upgrades. Goal 2: Affordability Accommodate affordable housing production that helps meet the City’s Quantified Objectives. Policies 2.1 Income Levels For Affordable Housing households. For purposes of this Housing Element, affordable housing is that which is obtainable by a household with a particular Attachment 1Item 3 Packet Page 97 City of San Luis Obispo Housing Element, July 2014September 2020 income level, as further described in the City’s Affordable Housing Standards. Housing affordable to Extremely Low, Very Low, Low, and Moderate income persons or households shall be considered “deed-restricted affordable housing.” Income levels are defined as follows: ❑ Extremely low 30% or less of County Area median household income ❑ Very low: 31 to 50% of County Area median household income. ❑ Low: 51% to 80% of County Area median household income. ❑ Moderate: 81% to 120% of County Area median household income. ❑ Above moderate: 121% or more of County Area median household income. 2.2 Index of Affordability. The Index of Affordability shall be based on the City’s Affordable Housing Standards, updated annually per the County of San Luis Obispo’s Area Median Income determined by California Department of Housing and Community Development. whether the monthly cost of housing fits within the following limits: For extremely low income households, not more than 25% of monthly income. For very low- and low-income households, not more than 25% of monthly income. For moderate income households, not more than 30% of monthly income. For above-moderate income households, no index. These indices may be modified or expanded if the State of California modifies or expands its definition of affordability for these income groups. 2.3 For housing to qualify as “deed-restricted affordable” under the provisions of this Element, guarantees must be presented that ownership or rental housing units will remain affordable for the longest period allowed by State law, or for a shorter period under an equity-sharing or housing rehabilitation agreement with the City. 2.4 Encourage housing production for all financial strata of the City's population, as allocated in the proportions shown in the Regional Housing Needs Allocation, for the 2014 - 20196th cycle planning period. The number of units per income category areThese proportions are: extremely low andincome /, 12 percent, very low income, 12 percent825 units; low income, 16 percent520 units; moderate income, 18 percent604 units; and above moderate income, 42 percent1,405 units. Programs 2.5 Continue to manage the Affordable Housing Fund so that the fund serves as a sustainable resource for supporting affordable housing development. The fund shall serve as a source of both grant funding and below-market financing for affordable housing projects; and funds shall be used to support a wide variety of housing types at the following income levels: extremely low, very low, low, and moderate, but with a focus on production Attachment 1Item 3 Packet Page 98 City of San Luis Obispo Housing Element, July 2014September 2020 efficiency to maximize housing benefits for the City’s financial investment, and to support high-quality housing projects that would not be feasible without Affordable Housing Fund support. 2.6 Continue to review existing and proposed building, planning, engineering and fire policies and standards as housing developments are reviewed to determine whether changes are possible that could assist the production of affordable housing, or that would encourage preservation of housing rather than conversion to non-residential uses, provided such changes would not conflict with other General Plan policies. Such periodic reviews will seek to remove regulations that have been superseded, are redundant, or no longer needed. 2.7 Continue to prioritizeimplement existing procedures that speed up the processing of applications, construction permits, and water and sewer service priorities for affordable housing projects. City staff and commissions shall give such projects priority in allocating work assignments, scheduling, conferences and hearings, and in preparing and issuing reports and water and sewer service allocations. 2.8 Continue to pursue outside funding sources for the payment of City impact fees so that new dwellings that meet the City’s affordable housing standards can mitigate their facility and service impacts without adversely affecting housing affordability. 2.9 To the extent outside funding sources can be identified to offset impacts on City funds, exempt dwellings that meet the moderate income, Affordable Housing Standards from planning, building and engineering development review and permit fees, including water meter installation fee. Maintain exemptions for extremely-low, very-low and low-income households. 2.810 Continue to coordinate public and private sector actions to encourage the development of housing that meets the City’s housing needs. 2.911 Continue to assist with the issuance of bonds, tax credit financing, loan underwriting or other financial tools to help develop or preserve affordable units through various programs., including, but not limited to: (1) below-market financing through the SLO County Housing Trust Fund and (2) subsidized mortgages for extremely low, very-low, low- and moderate income persons and first-time home buyers, and (3) self-help or “sweat equity” homeowner housing. 2.102 Consider updating the Affordable Housing Standards to includeincorporating Home Owners’ Association (HOA) fees and a standard allowance for utilities in the calculation for affordable rents and home sales prices. 2.113 In conjunction with the Housing Authority and other local housing agencies, continue to provide on-going technical assistance and education to tenants, property owners and the community at large on the need to preserve at-risk units as well as the available tools to help them do so. Attachment 1Item 3 Packet Page 99 City of San Luis Obispo Housing Element, July 2014September 2020 2.124 In conjunction with local housing providers and the local residential design community, continue toContinue to provide technical assistanceplanning services as requested by the public, builders, design professionals and developers regarding design strategies to achieve affordable housing and density bonuses. 2.135 Update the Inclusionary Housing Ordinance, including Table 2A, based on findings and recommendations in the 2020 Affordable Housing Nexus Study and conduct further feasibility analysis in order to Eevaluate the Inclusionary Housing Ordinance requirements and the effect of Table 2A on the City’s ability to provide affordable housing in the proportions shown in the Regional Housing Needs Allocation, per Policy 2.4. 2.16 The City will evaluate and consider including a workforce level of affordability in its Affordable Housing Standards to increase housing options in the City for those making between 121 percent and 160 percent of the San Luis Obispo County median income. This affordability category cannot be used to meet inclusionary housing ordinance requirements and is not eligible for City Affordable Housing Funds. 2.147 Continue to consider support increasing residential densities above state density bonus allowances for projects that provide housing for extremely low, very low, and extremely low income households. 2.15 Evaluate a flexible density pilot program and initiate an update of the Zoning Regulations and Community Design Guidelines to incorporate flexible density development options in Downtown and portions of Upper Monterey and Mid-Higuera Special Focus Areas to support the production of smaller residential units (150 to 600 square feet). Goal 3: Housing Conservation Conserve existing housing and prevent the loss of safe housing and the displacement of current occupants. Policies 3.1 Continue to encourage the rehabilitation, remodeling or relocation of sound or rehabitable housing rather than demolition. Demolition of non-historic housing may be permitted where conservation of existing housing would preclude the achievement of other housing objectives or adopted City goals. 3.2 Discourage the removal or replacement of housing affordable to extremely low, very-low, low- and moderate income households, and avoid permit approvals, private development, municipal actions or public projects that remove or adversely impact such housing unless such actions are necessary to achieve General Plan objectives and: (1) it can be demonstrated that rehabilitation of lower-cost units at risk of replacement is financially or physically infeasible, or (2) an equivalent number of new units comparable or better in affordability and amenities to those being replaced is provided, or (3) the project will correct substandard, blighted or unsafe housing; and (4) removal or replacement will not Attachment 1Item 3 Packet Page 100 City of San Luis Obispo Housing Element, July 2014September 2020 adversely affect housing which is already designated, or is determined to qualify for designation as a historic resource. 3.3 Encourage seismic upgrades of older dwellings to reduce the risk of bodily harm and the loss of housing in an earthquake. 3.4 Encourage the construction, preservation, rehabilitation or expansion of residential hotels, group homes, integrated community apartments, and single-room occupancy dwellings. 3.5 Preserve historic homes and other types of historic residential buildings, historic districts and unique or landmark neighborhood features. 3.6 Preserve the fabric, amenities, yards (i.e. setbacks), and overall character and quality of life of established neighborhoods. 3.7 Encourage and support creative strategies for the rehabilitation and adaptation and reuse of residential, commercial, and industrial structures for housing. Programs 3.8 Adopt an ordinance that implements policy 3.2 to discourage removal or replacement of affordable housing. 3.9 Correct unsafe, unsanitary or illegal housing conditions, improve accessibility and energy efficiency and improve neighborhoods by collaborating with agencies offering rehabilitation programs. City will use State or Federal grants or other housing funds to implement the program and provide services such as home weatherization, repair and universal access improvements. 3.810 Continue to encourage the creation of dwellings in the Downtown Core (C-D Zone) and the Downtown Planning Area by continuing the “no net housing loss” program, consistent with Chapter 17.8617.142 (Downtown Housing Conversion Regulations) of the Zoning Regulations. 3.911 Continue to identify residential properties and districts eligible for local, State or Federal historic listing in accordance with guidelines and standards help property owners repair, rehabilitate and improve properties in a historically and architecturally sensitive manner. 3.12 Continue to monitor and track affordable housing units at-risk of being converted to market rate housing annually. Provide resources to support the Housing Authority, and local housing agencies, purchase and manage at-risk units. 3.13 Working with non-profit organizations, faith-based organizations, or the Housing Authority of the City of San Luis Obispo, the City will encourage rehabilitation of residential, commercial or industrial buildings to expand extremely low, very-low, low or moderate income rental housing opportunities. Attachment 1Item 3 Packet Page 101 City of San Luis Obispo Housing Element, July 2014September 2020 Goal 4: Mixed-Income Housing Preserve and accommodate existing and new mixed-income neighborhoods and seek to prevent neighborhoods or housing types that are segregated by economic status. Policies 4.1 Within newly developed neighborhoods, housing that is affordable to various economic strata should be intermixed rather than segregated into separate enclaves. The mix should be comparable to the relative percentages of extremely low, very-low, low, moderate and above-moderate income households in the City’s quantified objectives. 4.2 Include both market-rate and affordable units in apartment and residential condominium projects and intermix the types of units. Affordable units should be comparable in size, appearance, and basic quality to market-rate units. 4.3 Extremely-low and very low-income housing, such as that developed by the Housing Authority of the City of San Luis Obispo or other housing providers, may be located in any zone that allows housing, and should be dispersed throughout the City rather than concentrated in one neighborhood or zone. 4.4 In its discretionary actions, housing programs and activities, the City shall affirmatively further fair housing and promote equal housing opportunities for persons of all economic segments of the community. Programs 4.5 Review new development proposals for compliance with City regulations and revise projects or establish conditions of approval as needed to implement the mixed-income policies. 4.6 Consider aAmending the City’s Inclusionary Housing Ordinance and Affordable Housing Incentives to require that affordable units in a development be of similar size, number of bedrooms, character and basic quality as the non-restricted units in locations that avoid segregation of such units., including equivalent ways to satisfy the requirement. Goal 5: Housing Variety and Tenure Provide variety in the location, type, size, tenure, and style of dwellings. Policies 5.1 Encourage the integration of appropriately scaled, special needs housing into developments or neighborhoods of conventional housing. Attachment 1Item 3 Packet Page 102 City of San Luis Obispo Housing Element, July 2014September 2020 5.2 Encourage mixed-use residential/commercial projects in all commercial zones, especially those close to activity centers. to include live-work and work-live units where housing and offices or other commercial uses are compatible. 5.3 Encourage the development of housing above ground-level retail stores and offices to provide housing opportunities close to activity centers and to use land efficiently. 5.34 New planned In general, housing developments of twenty (20) or more units should provide a variety of dwelling types, sizes and styles or forms of tenure. 5.4 Encourage the development of a variety of “missing middle” housing types. Program 5.5 Review new developments for compliance with City regulations and revise projects or establish conditions of approval as needed to implement the housing variety and tenure policies. 5.6 Evaluate opportunities for promoting “missing middle” housing types (e.g. duplex, triplex, quadplex, cottages, etc) to increase housing options in the City. 5.7 Consider amending the Zoning Regulations to streamline the permitting process for mixed- used projects in commercial zones. Goal 6: Housing Production Plan forFacilitate the production of new housing to meet the full range of community housing needs. Policies 6.1 Consistent with the growth management portion of its Land Use Element and the availability of adequate resources, the City will plan to accommodate up to 3,354 dwelling units for the 6th cycle housing element update in accordance with the assigned Regional Housing Needs Allocation.1,144 dwelling units between January 2014 and June 2019 in accordance with the assigned Regional Housing Needs Allocation. 6.2 New commercial developments in the Downtown Core (C-D Zone) shall include housing, unless the City makes one of the following findings: Housing is likely to jeopardize the health, safety or welfare of residents or employees; or The property’s shape, size, topography or other physical factor makes construction of new dwellings infeasible. 6.23 If City services must be rationed to development projects, residential projects will be given priority over non-residential projects . As required by SB 1087, Housing affordable to lower income households will be given first priority. Attachment 1Item 3 Packet Page 103 City of San Luis Obispo Housing Element, July 2014September 2020 6.43 City costs of providing services to housing development will be minimized. Other than for existing housing programs encouraging housing affordable to extremely low, very- low and low income persons, the City will not make new housing more affordable by shifting costs to existing residents. 6.45 When sold, purchased, or redeveloped for public or private uses, City-owned properties within the urban reserve shall include housing as either a freestanding project or part of a mixed-use development where land is suitable and appropriate for housing. 6.6 Property located behind the former County General Hospital shall be designated a “Special Considerations” zone and may be considered suitable for residential development after further analysis and environmental review, provided that development be limited to site areas with average slopes of less than 20 percent, that approximately one-half of the total site area be dedicated for open space and/or public use, and that an additional water tank be provided if determined necessary to serve new development. 6.57 Support the redevelopment of excess public and private utility properties for housing where appropriately located and consistent with the General Plan. 6.68 Consistent with the City’s goal to stimulate higher density infill where appropriate in the Downtown Core (C-D Zone), Upper Monterey, and Mid-Higuera Special Focus Areas,, the City shall consider changes to the Zoning Regulations that would allow for flexible density standards that support the development of smaller apartments and efficiency units. 6.79 Encourage and support employer/employee financing programs and partnerships to increase housing opportunities specifically targeted towards the local workforce. 6.810 To help meet the 6th cycle RHNA production targetsQuantified Objectives, the City will support residential infill development and promote higher residential density where appropriate. 6.9 Specific plans for any new area identified shall include R-3 and R-4 zoned land to ensure sufficient land is designated at appropriate densities to accommodate the development of extremely low-, very low- and low-income dwellings. Programs 6.101 Maintain the General Plan and Residential Growth Management Regulations (SLOMC 17.88144) exemption for new housing in the Downtown Core (C-D zone), accessory dwelling units (ADUs), and new housing in other zones that is enforceablyfor deed- restricted for extremely-low, very low, low- and moderate income households, pursuant to the Affordable Housing Standards. 6.112 Continue to allow flexible parking regulations for housing development, especially in the Downtown Core (C-D Zone), including the possibilities of flexible use of city parking Attachment 1Item 3 Packet Page 104 City of San Luis Obispo Housing Element, July 2014September 2020 facilities by Downtown residents, where appropriate, and reduced or no parking requirements where appropriate guarantees limit occupancies to persons without motor vehicles or who provide proof of reserved, off-site parking. Such developments may be subject to requirements for parking use fees, use limitations and enforcement provisions. 6.123 Continue to develop incentives to encourage additional housing in the Downtown, Upper Monterey, and Mid-Higuera Special Focus AreasDowntown Core (C-D Zone), particularly in mixed-use developments. Density based on flexible density average unit size in a project should be explored to encourage the development of smaller efficiency units. 6.14. Specific plans for any new expansion area identified shall include R-3 and R-4 zoned land to ensure sufficient land is designated at appropriate densities to accommodate the development of extremely low, very-low and low income dwellings. These plans shall include sites suitable for subsidized rental housing and affordable rental and owner- occupied dwellings, and programs to support the construction of dwellings rather than payment of in-lieu housing fees. Such sites shall be integrated within neighborhoods of market-rate housing and shall be architecturally compatible with the neighborhood. 6.135 Consider General Plan amendments to rezone commercial, manufacturing or public facility zoned areas for higher-density, infill or mixed-use housing where land development patterns are suitable. and where impact to Low-Density Residential areas is minimal. For example, areas to be considered for possible rezoning include, but are not limited to the following sites (shown in Figure 1 and further described in Appendix D, Table D-1): A) Portions of South Broad Street Corridor and Little Italy area B) A) 1499 San Luis Drive (rezone vacant and underutilized School District property) C) B) 1642 Johnson Avenue (vacant School District property) D) C) 4325 South Higuera Street (former P.G.&E. yard) E) D) 4355 Vachell Lane (vehicle storage) F) 173 Buckley Road (Avila Ranch) G) E) 2143 Johnson Avenue (adjacent to County Health Department) H) 3710 Broad Street (Plumbers and Steamfitters Union) I) F) 11950 Los Osos Valley Road (Pacific Beach High School) J) G) 2500 Block of Boulevard Del Campo (adjacent to Sinsheimer Park) H) 12165 & 12193 Los Osos Valley Road (adjacent to Home Depot) I) 1150 & 1160 Laurel Lane (Atoll Business & Technology Center) K) J) 600 Tank Farm Road (Temporary Unimproved Parking Area) Figure 1 Areas to be Considered for Possible Rezoning Attachment 1Item 3 Packet Page 105 City of San Luis Obispo Housing Element, July 2014September 2020 6.146 Continue to provide resources that support the SLO County Housing Trust fund’s efforts to provide below-market financing and technical assistance to affordable housing developers as a way to increase affordable housing production in the City of San Luis Obispo. 6.157 Encourage residential development through infill development and densification within City Limits and in designated expansion areas over new annexation of land. 6.168 Seek opportunities with other public and private agencies to identify excess, surplus, and underutilized parcels for residential development and public utilities to identify, assemble, develop, redevelop and recycle surplus land for housing, and to convert vacant or underutilized public, utility or institutional buildings to housing. 6.179 Continue to incentivize affordable housing development consistent with SLOMC (Affordable Housing Incentives) with density bonuses, parking reductions and other development incentives, including City financial assistance. 6.1820 Continue to financially assist in the development of housing affordable to extremely low, very-low, low- andor moderate income households during the planning period using State, Federal, and local funding sources, with funding priority given to projects that result in the Attachment 1Item 3 Packet Page 106 City of San Luis Obispo Housing Element, July 2014September 2020 maximum housing benefits for the lowest household income levels. 6.1921 Actively seek new revenue sources, including State, Federal and private/non-profit sources, and financing mechanisms to assist with the development of affordable housing affordable to development for extremely low, very low and low or moderate income households and first- time homebuyers. 6.22 Continue to exempt the rehabilitation or remodeling of up to 4 dwellings of up to 1200 square feet each from Architectural Review Commission review. New multi-unit housing may be allowed with “Minor or Incidental” or staff level architectural review, unless the dwellings are located on a sensitive or historically sensitive site. 6.23 Assist in the production of affordable housing by identifying vacant or underutilized City- owned property suitable for housing, and dedicate public property, where feasible and appropriate for such purposes, as development projects are proposed. 6.24 Community Development staff will proactively provide information for properties suitable for housing as identified in the Land Use and Housing Elements. 6.25 Evaluate and consider amending the General Plan to designate the 46 acres associated with the former County General Hospital as a “Special Considerations” zone, suitable for housing development on areas of the site of less than 20 percent average slope, provided that open space dedication and public improvements are part of the project. 6.206 Continue to update the Affordable Housing Incentives (Chapter 17.90140, SLOMC) and Zoning Regulations to ensure density bonus incentives are consistent with State Law. 6.27 Evaluate and consider increasing the residential density allowed in the Neighborhood- Commercial (CN), Office (O) and Downtown Commercial (CD) zoning districts. The City will evaluate allowing up to 24 units per acre in the CN and O zones, and up to 72 units per acre in the CD zone, twice the current density allowed in these areas. 6.28 Evaluate how lot patterns (i.e. size, shape, slope) in the City’s multi-family zones affect the City’s ability to meet housing production policies. If warranted, consider setting a minimum number of dwellings on each legal lot in the R-2, R-3 and R-4 zones, regardless of lot size, when other property development standards, such as parking, height limits and setbacks can be met. 6.29 Continue to pursue incentives to encourage development of Secondary Accessory Dwelling Units (ASDUs). Possible incentives include ASDU design templates, flexible development standards, fee reductions or deferrals, or other measures to encourage the construction of A SDUs where allowed by zoning. 6.2230 Evaluate and consider updatadopting the Subdivision Regulations and Zoning Regulations changes to support small lot subdivisions, ownership bungalow court development . Eliminate the one acre minimum lot area for PD overlay zoning, and other alternatives to conventional subdivision design. Attachment 1Item 3 Packet Page 107 City of San Luis Obispo Housing Element, July 2014September 2020 6.31 Consider scaling development impact fees for residential development based on size, number of bedrooms, and room counts. 6.2332 Continue to submit annual the Housing Element Annual Pprogress Rreports (APR) to the State Department of Housing and Community Development and the Governor’s Office of Planning and Research on or before April 1st of each year for the prior calendar year, pursuant toper Government Code Section 65400. Goal 7: Neighborhood Quality Maintain, preserve, and enhance the quality of neighborhoods, encourage neighborhood stability and owner occupancy, and improve neighborhood appearance, function and sense of community. Policies 7.1 Within established neighborhoods, new residential development shouldshall be of compatible design a character, size, density and quality that respects the existing neighborhood character, to enhance and maintains the quality of life for existing and future residents. 7.2 Higher density housing should maintain high quality standards for unit design, privacy, security, on-site amenities, and public and private open space. Such standards should be flexible enough to allow innovative design solutions. in special circumstances, e.g. in developing mixed-use developments or in housing in the Downtown, Upper Monterey, and Mid-Higuera Special Focus Areas Core. 7.3 Within established neighborhoods, housing should not be located on sites designated in the General Plan for parks or open space. 7.34 Within expansion areas, nNew residential developments should incorporate be an integral part of an existing neighborhood or should establish a new neighborhood, with pedestrian and bicycle linkages that provide direct, convenient and safe access to adjacent neighborhoods, schools, parks, and shopping areas. 7.45 Discourage Tthe creation of walled-off or physical separations between residential enclaves, or of separate, unconnected tracts to enhance, is discouraged because physical separations prevent the formation of safe, walkable, and enjoyable neighborhoods. 7.56 Housing shouldshall be sited to enhance safety along neighborhood streets and in other public and semi-public areas. 7.67 The physical design of neighborhoods and dwellings should promote walking and bicycling and preserve open spaces and views. Attachment 1Item 3 Packet Page 108 City of San Luis Obispo Housing Element, July 2014September 2020 7.78 Continue to Eencourage strategies and programs that increase long-term residency and stabilization in neighborhoods. 7.8 Preserve the fabric, amenities, yards (i.e. setbacks), and overall character and quality of life of established neighborhoods. Programs 7.9 Continue to utilize a diverse range of outreach methods implement varied strategies, includingsuch as early notification through email notificationselectronic media, the City’s website and social media accounts improvements, and neighborhood outreach meetings, etc., to ensure residents are aware of and able to participate in planning decisions affecting their neighborhoods early in the planning process. 7.10 Continue to work directly with neighborhood groups and individuals to address concerns pertaining to. Identify specific neighborhood needs, problems, trends, and opportunities for physical improvements. 7.11 Continue to fund neighborhood improvements, including parks, sidewalks, traffic calming devices, crosswalks, parkways, street trees and street lighting to improve aesthetics, safety and accessibility. 7.12 Continue to develop and implement neighborhood parking strategies, including parking districts, to address the lack of on- and off-street parking in residential areas. 7.123 Continue the City’s Neighborhood Services and proactive enforcementCode Enforcement programs to support neighborhood wellness. Goal 8: Special Housing Needs Encourage the creation and maintenance of housing for those with special housing needs. Policies 8.1 Encourage housing development that meets a variety of special needs, including large families, single parents, disabled persons, the elderly, students, veterans, the homeless, or those seeking congregate care, group housing, single-room occupancy or co-housing accommodations, utilizing universal design. 8.2 Preserve manufactured housing or mobile home parks and support changes in these forms of tenure only if such changes provide residents with greater long-term security or comparable housing in terms of quality, cost, and livability. 8.3 Encourage manufactured homes in Specific Plan Areas by: A) When the City considers adopting new specific plans, including policies that support Attachment 1Item 3 Packet Page 109 City of San Luis Obispo Housing Element, July 2014September 2020 owner-occupied manufactured home parks with amenities such as greenbelts, recreation facilities, and shopping services within a master planned community setting. Such parks could be specifically designed to help address the needs of those with mobility and transportation limitations. B) Establishing lot sizes, setback, and parking guidelines that allow for relatively dense placement of manufactured homes within the master planned neighborhood. C) Locating manufactured home parks near public transit facilities or provide public transportation services to the manufactured home parks to minimize the need for residents to own automobiles. 8.34 Encourage Cal Poly University to continue to develop on-campus student housing to meet existing and future needs and to lessen pressure on City housing supply and transportation systems. 8.45 Strengthen the role of on-campus housing by encouraging Cal Poly University to require freshmen and sophomore students to live on campus. 8.56 Locate fraternities and sororities on the Cal Poly University campus. Until that is possible, they should be located in Medium-High and High-Density residential zones near the campus. 8.67 Encourage Cal Poly University to develop and maintain faculty and staff housing, consistent with the General Plan. 8.78 Disperse special needs living facilities throughout the City where public transit and commercial services are available, rather than concentrating them in one district. 8.89 Support Ccontinue to supportd regional efforts to address homelessness implement the document “The Path Home: San Luis Obispo County’s 10 Year Plan to End Chronic Homelessness”. 8.910 Encourage a variety of housing types that accommodate persons with disabilities and promote aging in place, including a goal of “visitability” in new residential units, with an emphasis on first-floor accessibility to the maximum extent feasible. 8.11 Encourage changes to City regulations that would support the special housing needs of disabled persons, including persons with developmental disabilities. 8.102 Assist the homeless and those at risk of becoming homeless by supporting shelters, temporary housing, and transitional housing., and by facilitating general housing assistance. . Attachment 1Item 3 Packet Page 110 City of San Luis Obispo Housing Element, July 2014September 2020 Programs 8.113 Continue to provide resources that support local and regional solutions to meeting the needs of the homeless and continue to support, jointly with other agencies, shelters and programs, such as Housing First and Rapid Rehousing, for the homeless and for displaced individuals and familieswomen and children. 8.124 Continue to enforce the mobile home rent stabilization program to minimize increases in the cost of mobile home park space rents. 8.135 SupportContinue to look for opportunities in specific plan areaswithin the City suitable for tenant-owned mobile-home parks, cooperative or limited equity housing, manufactured housing, self-help housing, or other types of housing that meets special needs. 8.146 Advocate developing more housing and refurbishing campus housing at Cal Poly University. 8.157 Work with Cal Poly University Administration to secure designation of on-campus fraternity/sorority living groups. 8.168 Jointly develop and implement a student housing plan and Ccontinue to support “good neighbor programs” with Cal Poly State University, Cuesta College, the City and localCity residents. The programs should continue to improve communication and cooperation between all groups the City and the schools, set on- campus student housing objectives and establish clear, effective standards for about student housing in residential neighborhoods. 8.179 Provide public educational information at various City Offices, on the City website, and other electronic media platforms the Community Development Department public counter on universal design concepts (i.e. aging in place) for new and existing residential dwellings. 8.1820 Transitional Housing and Supportive Housing: Continue to allow the establishment of transitional and supportive housing in all zoning districts where residential uses are allowed. Amend the Zoning Regulations to allow homeless shelters, transitional housing and supportive housing (low barrier navigation centers) in all residential zones, areas zoned for mixed-uses, and nonresidential zones permitting multifamily uses without a conditional use permit to be alignment with Government Code Section 65660 (AB 101). 8.1921 Continue to look for partnership opportunities with non-profit housing developers and service providers to (land, retail or commercial space, motels, apartments, housing units, mobile home parks) that can be acquired vacant, blighted, or underutilized properties (land, retail or commercial space, motels, apartments, housing units, mobile home parks) forand conversion ted into affordable permanent and supportive housing and permanent supportive housing for homeless persons and families. Attachment 1Item 3 Packet Page 111 City of San Luis Obispo Housing Element, July 2014September 2020 8.22 Consider addition of an overlay zone to existing and future mobile home and trailer park sites to provide constructive notice that additional requirements, such as rent stabilization and a mobile home park conversion ordinance may apply. 8.2023 Continue to Sseek State, Federal, and local funding sources to eEncourage the creation of and financially assist in the development of housing for persons with developmental disabilities. The City will seek grant opportunities for housing construction and rehabilitation specifically targeted for persons with developmental disabilities. using State, Federal and local funding sources. 8.24 Continue to coordinate with the County Department of Social Services, social services providers, and non-profit organizations for delivery of existing, improved and expanded programs and services, including case management, drug, alcohol, detoxification, and mental health services. 8.2125 Continue to coordinateliaison with engage the County Department of Social Services, Homeless Services Oversight Council (HSOC), social service providers, and non-profit organizations and Friends of Prado Day Center (FPDC) to identify, evaluate, and implement strategies to reduce the impacts of homelessness on the City. 8.26 Work with other jurisdictions to advocate for State legislation that would: 1) provide funding to help Cal Poly University provide adequate on-campus student housing, and 2) allow greater flexibility for State universities and community colleges to enter into public- private partnerships to construct student housing. Goal 9: Sustainable Housing, Site, and Neighborhood Design Encourage housing that is resource-conserving, healthful, economical to live in, environmentally benign, and recyclable when demolished. Policies 9.1 Residential developments should promote sustainability consistent with the Climate Action Plan (CAP) and CALGreen in their design, placement, and functionalityuse. Sustainability can be promoted through a variety of housing strategies, including the following: A) Maximize use of renewable, recycled-content, and recycled materials, and minimize use of building materials that require high levels of energy to produce or that cause significant, adverse environmental impacts. B) Incorporate renewable energy features into new homes, including passive solar design, solar hot water, solar power, and natural ventilation and cooling. C) Minimize thermal island effects through reduction of heat-absorbing pavement and increased tree shading. Avoid building materials that may contribute to health problems through the release of gasses or glass fibers into indoor air. Attachment 1Item 3 Packet Page 112 City of San Luis Obispo Housing Element, July 2014September 2020 Design dwellings for quiet, indoors and out, for both the mental and physical health of residents. F) Design dwellings economical to live in because of reduced utility bills, low cost maintenance and operation, and improved occupant health. G) Use construction materials and methods that maximize the recyclability of a building’s parts. Educate public, staff, and builders to the advantages and approaches to sustainable design, and thereby develop consumer demand for sustainable housing. I) City will continue to refer to a sustainable development rating system, such as the LEED or GreenPoint programs when evaluating new development proposals. 9.2 Residential unitssite, subdivision layouts, and neighborhood designs amenities should be coordinated to support make residential sustainableil designity work. Some ways to do this include: A) Design subdivisions to maximize solar access for each dwelling and site. B) Design sites so residents have usable outdoor space with access to both sun and shade. C) Streets and access ways should minimize pavement devoted to vehicular use. D) Use neighborhood retention basins to purify street runoff prior to its entering creeks. Retention basins should be designed to be visually attractive as well as functional. Fenced-off retention basins should be avoided. E) Encourage cluster development with dwellings grouped around significantly-sized, shared open space in return for City approval of smaller individual lots. F) A) Treat public streets as landscaped parkways, using continuous plantings at least six feet wide and where feasible, median planters to enhance, define, and to buffer residential neighborhoods of all densities from the effects of vehicle traffic. 9.3 Preserve the physical neighborhood qualities in the Downtown Planning Area that contribute to sustainability. Some ways to do this include: A) Maintain the overall scale, density and architectural character of older neighborhoods surrounding the Downtown Core. B) Encourage the maintenance and rehabilitation of historically designated housing stock. 9.34 To promote energy conservation and a cleaner environment, Continue to encourage the development of dwellings with energy-efficient designs, utilizing passive and active solar features, and the use of energy-saving techniques that exceed minimums prescribed by State law. 9.45 Actively Continue to promote water conservation through housing and site design to help moderate the cost of housing. 9.56 Support programs that provide financing for sustainable home upgrade projects such as installation of solar panels, heating and cooling systems, water conservation and windows to improve the energy efficiency of the City’s existing housing stock. Programs 9.67 Continue to educate planning and building staff and citizen review bodies on energy Attachment 1Item 3 Packet Page 113 City of San Luis Obispo Housing Element, July 2014September 2020 conservation issues, including the City’s energy conservation policies and Climate Action Plan. Staff shall work with applicants to achieve the City’s energy conservation goals. 9.78 Continue to provide assurance of long-term solar access for new or remodeled housing and for adjacent properties, consistent with historic preservation guidelines, and revise regulations found to be inadequate. 9.9 Continue to implement the Water Quality Control Board’s “Post-Construction Stormwater Management Requirements for Development Projects in the Central Coast Region”, to reduce the amount of impermeable surface. 9.810 Implement Climate Action Plan programs that increase the production of “green” housing units and projects and require use of sustainable and/or renewable materials, water and energy technologies (such as, but not limited to solar, wind, or thermal). 9.911 Continue to promote building materials reuse and recycling in site development and residential construction, including flexible standards for use of salvaged, recycled, and “green” building materials. Continue the City’s construction and demolition debris recycling program as described in Chapter 8.05 of the Municipal Code. 9.12 Consider incentivizing dwelling units to a minimum size of 150 square feet, consistent with the California Building Code, by reduced impact fees and property development standards. 9.103 Consider participatingContinue to support in financing programs for sustainable home improvements such as solar panels, heating and cooling systems, water conservation and energy efficient windows. Goal 10: Local Preference Maximize affordable housing opportunities for those individuals who are employed in business that are located in geographic areas that are customarily included in the City’s annual jobs-housing balance analysis. who live or work in San Luis Obispo City and nearby corporate areas, towhile seeking to balance job growth and housing supply. Policies 10.1 Administer City housing programs and benefits, such as First Time Homebuyer Assistance or affordable housing lotteries, to give preference to individuals as outlined in Policy 10.2to: 1) persons living or working in the City or within the City’s Urban Reserve, and 2) persons living in San Luis Obispo County. 10.2 Encourage, and where legally allowed, require new housing development to give preference in the following order: 1) individuals who are employed in business that are located in geographic areas that are customarily included in the City’s annual jobs-housing balance analysis, 2) individuals residing in the County, and 3) finally to individuals from outside the County. Attachment 1Item 3 Packet Page 114 City of San Luis Obispo Housing Element, July 2014September 2020 10.2 Cal Poly State University and Cuesta College should actively work with the City and community organizations to create positive environments around the Cal Poly Campus by: A) Establishing standards for appropriate student densities in neighborhoods near Campus; B) Promoting homeownership for academic faculty and staff in Low-Density Residential neighborhoods in the northern part of the City; and C) A) Encouraging and participating in the revitalization of degraded neighborhoods. Programs 10.3 Continue to work with the County of San Luis Obispo for any land use decisions that create significant expansion of employment in the unincorporated areas adjacent to the City to mitigate housing impacts on the City. 10.4 Continue to work with housing developers to include restrictions in purchase agreements and CCRs to require for sale units to be restricted to owner-occupants for the first five years after sale. 10.4 Encourage residential developers to sell or rent their projects to those residing or employed in the City first before outside markets. 10.5 Work with Cal Poly to address the link between enrollment and the expansion of campus housing programs at Cal Poly University to reduce pressure on the City's housing supply. 10.6 Work with other jurisdictions to advocate for State legislation that would: 1) provide funding to help Cal Poly University provide adequate on-campus student housing, and 2) allow greater flexibility for State universities and community colleges to enter into public- private partnerships to construct student housing. Goal 11: Suitability Develop and retain housing on sites that are suitable for that purpose. Policies 11.1 Where property is equally suited for commercial or residential uses, give preference to residential use. Changes in land use designation from residential to non-residential should be discouraged. 11.2 Prevent new housing development on sites that should be preserved as dedicated open space or parks, on sites subject to natural hazards such as unmitigable geological or flood risks, or wild fire dangers, and on sites subject to unacceptable levels of man-made hazards or nuisances, including severe soil contamination, airport noise or hazards, traffic noise or hazards, odors or incompatible neighboring uses. Attachment 1Item 3 Packet Page 115 City of San Luis Obispo Housing Element, July 2014September 2020 Program 11.3 The City will continue to ensure the ability of legal, non-conforming uses to continue where new development is proposed. Attachment 1Item 3 Packet Page 116 City of San Luis Obispo, Council Memorandum Planning Commission Memo Date: June 2, 2020 TO: Planning Commission FROM: Tyler Corey, Principal Planner PREPARED BY: Rachel Cohen, Associate Planner SUBJECT: 2020 Affordable Housing Nexus Study INTRODUCTION In 2019, the City hired Consultants David Paul Rosen & Associates (DRA) to complete an Affordable Housing Nexus Study. The study was completed in January 2020 and submitted to the City Council on April 21, 2020 as information to receive and file. This information is part of a larger process that is associated to the Housing Element Update and the future evaluation of the Inclusionary Housing Ordinance (IHO). This is consistent with Housing Element Programs 2.15, 2.16 and 4.6 that outlines evaluating Table 2A, increasing affordability options for those making above 121 percent AMI, and providing affordable units that are consistent in size, location and character as market rate development, as a part of the inclusionary housing ordinance (IHO). The Nexus Study is the first step in providing information that can be used to evaluate these considerations and any other changes to the IHO. BACKGROUND Housing Major City Goal – Nexus Study Task Housing was identified as a Major City Goal for the 2019-21 Financial Plan. The adopted goal language states, “Facilitate the production of housing with an update of the Housing Element, including an emphasis on affordable housing (including unhoused people) and workforce housing through the lens of climate action and regionalism.”  A core priority identified in the MCG work scope and action plan is to complete an Affordable Housing Nexus Study to evaluate the current nexus between new commercial and residential development and the City’s requirements for affordable housing embodied in its Inclusionary Housing Requirements (SLOMC 17.138). The last time a study was completed was in 2004. Inclusionary Housing Ordinance The City’s first Inclusionary Housing Ordinance was adopted in 1999 and since that time, the City has focused on ensuring that a percentage of all new housing units are affordable to income eligible households. The inclusionary housing requirement can be met by 1) building affordable dwellings as part of a development project, 2) dedicating real property, improved or not, for development of affordable housing by the City’s Housing Authority or by a non-profit housing provider, 3) paying Attachment 2Item 3 Packet Page 117 The 2020 Affordable Housing Nexus Study Page 2 an in-lieu fee which is used to assist with the development of new affordable housing throughout the City, or 4) a combination of the above methods, to the approval of the Community Development Director. To date, more than 850 deed-restricted or otherwise secured affordable dwellings have been planned for, entitled, or built since the adoption of the Inclusionary Housing Ordinance in 1999. Additionally, the City has granted, loaned, or committed $10,450,954 of affordable housing in-lieu funds to assist with the development of 464 new deed-restricted affordable housing units. 2020 NEXUS STUDY Why Complete a Nexus Study? A nexus study is necessary to establish the relationship between market-rate residential development and non-residential development and the need to support and construct new deed- restricted affordable housing in the City. This nexus study analyzes if new market-rate residential and non-residential development in the City increases demand for affordable housing. A nexus study is intended to determine whether: (1) those subject to the fee are contributing to the demand that the fee will be used to address; and (2) that the amount of the fee is reasonably related to the magnitude of the fee-payer’s contribution to the problem. Nexus Study Finding The Nexus Study determined that both residential and commercial development are creating demand for affordable housing that is not being met by the housing market. The study’s findings verify that there is a nexus that justifies the City having an inclusionary housing requirement as it is applied to both residential and commercial development. Recommendations from the Nexus Study An update to the Inclusionary Housing Requirement will be pursued following adoption of the City’s Housing Element Update. The updated ordinance will implement policy direction included in the Housing Element Update. Consultants David Paul Rosen & Associates (DRA) has provided recommendations for updates to the City’s existing Inclusionary Housing Requirement. These recommendations are summarized below and can also be found in the Executive Summary Section of the Nexus Study. 1. Inclusionary Housing Ordinance (IHO) and Geographical Variation Based on comparable cities and an analysis of San Luis Obispo’s economic/market data, the City should consider different requirements based on whether the residential project is for sale or rent and should discontinue differentiating between housing projects located within the City Limits and Expansion Areas. Recommended City-Wide Affordable Housing Requirement for Residential Development: • Rental: Build 5% of units at very low income (50% Area Median Income (AMI)1 and 10% of units at low income (80% AMI) • Owner: Build 5% of units at low income (80% AMI) and 10% of units at moderate income 1 AMI’s listed in the recommendations are maximums for the various income groups. Attachment 2Item 3 Packet Page 118 The 2020 Affordable Housing Nexus Study Page 3 (120% AMI) Current Affordable Housing Requirement for Residential Development (both rental and owner): • In City Limits: Build 3% low (80% AMI) or 5% moderate (120% AMI) income Affordable Dwelling Units • In Expansion Area: Build 5% low (80% AMI) and 10% moderate (120% AMI) income Affordable Dwelling Units. 2. Affordable Housing Standards The City should maintain its current definitions of affordable housing expense in terms of the percent of AMI (Area Median Income) used to calculate affordable rents and sales prices. In addition, DRA recommends that the City include utility costs as part of rent and Homeowners Association (HOA) fees as part of the affordable sales prices. Existing City IHO does not include utility costs as part of rent or include HOA fees as part of the sales price. 3. Project Size and Density Adjustments DRA recommends eliminating the project size and project density adjustments currently contained in Inclusionary Housing Ordinance Table 2A and recommends a minimum inclusionary requirement of one unit for projects of five or more units not otherwise exempt from the ordinance. 4. Residential In-Lieu Fees DRA recommends applying in-lieu fees on a per square foot basis as the estimated economic equivalent of providing on-site units. Existing City IHO bases in-lieu fees on building valuation. “Building valuation” is the total value of all construction work for which a permit would be issued, as determined by the Chief Building Official. 5. Non-Residential Nexus Fees (Commercial Development) Based on the non-residential nexus fees adopted in other California communities (see Attachment A, Table ES-5 and Section 7.8), DRA recommends fees in the range of $1 to $4 per square foot for industrial uses and $2 to $5 per square foot for other non-residential uses. Existing City IHO bases commercial in-lieu fees on building valuation. Relation to Housing Element Based on recommendations of the DRA Nexus study, staff anticipates that the Housing Element update will include new policy and program language to evaluate amendments to the Inclusionary Housing Ordinance, including Table 2A, based on findings of an economic feasibility analysis once the Housing Element has been adopted by City Council and certified by the State. Attachment 2Item 3 Packet Page 119 The 2020 Affordable Housing Nexus Study Page 4 Next Steps • June 2020 – August 2020: Planning Commission reviews the Housing Element Update over the course of two separate meetings • September 2020: Council adopts completed Housing Element Update • Winter/Spring 2021: Complete an economic feasibility analysis • Fall 2021: Based on recommendations of the Nexus Study, the economic feasibility analysis, and guiding policies included in the Housing Element Update, staff will evaluate amendments to the Inclusionary Housing Ordinance and present its recommendations to the Planning Commission and City Council Attachment 2Item 3 Packet Page 120 DRAFT HOUSING ELEMENT GOALS, POLICIES, & PROGRAMS 1 June 10, 2020 Commission Purview The PC has two primary roles in the Housing Element update process: 1)provide a forum for public discussion and consensus building; 2)provide policy and program direction. 2 Public Outreach 3 Public Forum / City Council April 2, 2019 Planning Commission April 24, 2019 Association of Realtors July 23, 2019 Housing Element Workshop December 10, 2020 Online Survey December –January Chamber of Commerce April 2, 2020 EVC and the HBA May 13, 2020 Chamber of Commerce June 3, 2020 Human Resources Commission (HRC) June 4, 2020 Online Survey June 2020 Planning Commission June 10, 2020 Public Feedback –Housing Issues 4 Affordable housing Insufficient number of housing units to rent or purchase Not enough diversity in the types of housing Higher density housing Public Feedback –Housing Needs 5 Affordable housing Workforce (missing middle) housing Housing for families Student housing Senior housing Housing near employment More housing Public Feedback –Housing Opportunities 6 Increase residential densities where appropriate, such as downtown Provide more student housing on campus Rehabilitate existing housing resources Public Outreach 7 Staff is proposing modifications to Chapter 3 of the Housing Element based on feedback received from the community and stakeholders. Also considered the Housing Major City Goal, current needs, resources, and conditions in the community, and changes in state housing law. Background The current 5th Cycle Housing Element is based on the 1994 Land Use Element. Several of the proposed modifications to the Goals, Policies and Programs are proposed in order to bring Housing Element up to date with the current Land Use Element and Zoning Regulations. Minimize duplication with other General Plan Elements and other City documents. 8 Draft Goals, Policies & Programs Program 2.15 (2.13)–Affordability. Existing program providing direction to evaluate the Inclusionary Housing Ordinance (IHO). An Affordable Housing Nexus Study was completed in February 2020. Based on the findings and recommendations of the Nexus Study,staff is recommending this program modified to recognize and prioritize this work effort within this next housing element cycle. 9 Draft Goals, Policies & Programs Program 2.15 –Affordability. This is a new program based on community feedback and the Housing Major City Goal. Downtown and portions of Upper Monterey and Mid- Higuera Special Focus Areas were identified as areas that could be appropriate for higher density housing. Evaluate flexible density beyond what is allowed per the zone to support the production of smaller units (150-600 square feet in size). 10 Draft Goals, Policies & Programs Program 4.6 –Mixed-Income Housing. Consider and clarify when amending the IHO: 1.Affordability (by unit type), 2.Location of affordable units (onsite,dispersion,off-site, etc.), 3.Equivalent size of units (number of bedrooms),and 4.Equivalent options to meet these requirements. 11 Draft Goals, Policies & Programs Policy 5.4 and Program 5.6 –Housing Variety. Both new. Policy 5.4 addresses the need for more housing by encouraging the development of “missing middle” housing types. Transfers the discussion of workforce housing to promoting a specific housing type. Program 5.6 program promotes exploring ways to support a “missing middle”housing types (duplexes, triplexes,quadplexes,cottages,etc.) 12 Draft Goals, Policies & Programs Policy 6.8 (6.6)&Program 6.13 (6.12)–Housing Production. Existing Policy and the Program Updated to encourage additional residential units in Downtown and in Upper Monterey and Mid-Higuera Special Focus Areas. Consistent with the Housing Major City Goal and new Housing Element Program 2.15. 13 Draft Goals, Policies & Programs Goal 7 –Neighborhood Quality. Existing Goal Updated to focus on providing quality of life in neighborhoods for all residents. Better highlights existing policies and programs under Goal 7. 14 Draft Goals, Policies & Programs Program 8.20 (8.18)–Special Housing Needs. Revised to be consistent with AB 101. AB 101 requires that homeless shelters,transitional housing and supportive housing be allowed in all residential zones,areas zoned for mixed-uses,and nonresidential zones that permit multifamily uses without a use permit. 15 Draft Goals, Policies & Programs Goal 10,Policy 10.2,&Program 10.4 –Local Preference Existing Goal and new Policy and Program. Providing housing for individuals who are employed in businesses that are located in geographic areas that are customarily included in the City’s annual jobs- housing balance analysis. 16 Draft Goals, Policies & Programs Policy 10.2.encourages new housing developments to give preference to: 1.Individuals who are employed in local businesses, 2.Individuals residing in the County,and 3.Individuals from outside the County. Program 10.4 provides direction to work with housing developers to limit for sale units to owner-occupants for the first five years after sale 17 Removed Goals, Polices and Programs Recommendation to remove Goals,policies and programs because they: 1.Have been implemented. 2.No longer fit the current need and issues of the community. 3.No longer comply with new state regulations. Goal 11 ,policies 3.3,6.6,8.3,9.3,11 .1 and 11 .2 and programs 3.8,6.2 and 11 .3 recommended for removal. 18 Zoning Regulations Update Several Policies and Programs are proposed to be modified or are recommended for removal because of the update to the Zoning Regulations in 2018. Policies 5.2 &5.3 –Combined. Policy 6.2 &Programs 6.22,6.27,6.28,6.29 –Removed. Program 6.30 (6.22)–Modified. 19 AB 1600 and Fee Schedule Update Fee reductions were implemented as part of AB 1600 and the Fee Schedule update. Programs 2.8,2.9,6.29,6.31,and 9.12 –Removed. 20 Housing Element Next Steps Finalize Draft Housing Element July 2020 Draft to be posted on City’s Housing Element website: https://www.slocity.org/government/department- directory/community-development/affordable- housing/housing-element Submit document to HCD for review and comment Complete the Initial Study of Environmental Impact Planning Commission and City Council review of Draft Housing Element anticipated in Summer/Fall 2020 21