HomeMy WebLinkAboutItem 3 - AFFH-0269-2020 (1042 Olive Street)
PLANNING COMMISSION AGENDA REPORT
SUBJECT: Review of an affordable housing incentive request for a previously approved mixed-use
project. The requested incentive is a density bonus of 95%, which is higher than the standard incentive
of 35%. The project will designate two one-bedroom units and two studio-units for very-low income
households, which is 35% of the site’s initial residential density.
PROJECT ADDRESS: 1042 Olive Street BY: Kyle Van Leeuwen, Assistant Planner
Phone Number: (805) 781-7091
E-mail: kvanleeuwen@slocity.org
FILE NUMBER: AFFH-0269-2020 FROM: Tyler Corey, Principal Planner
RECOMMENDATION
Adopt a resolution approving the affordable housing incentive request of 95%, subject to findings
and conditions of approval (Attachment 1, Draft Resolution).
SITE DATA
SUMMARY
On January 3, 2017, the City Council granted final approval of the project, which consisted of a new
four story mixed-use building with commercial/retail at the ground level (3,512 sq. ft.) and 17
extended stay hotel rooms (ARCH-2946-2016). The approval of the project’s design also included
the approval of a 25% shared and mixed-use parking reduction. The City Council adopted a
Categorical Exemption (Class 32, Infill Exemption) for the project.
The applicant, Olive Street LLC, is requesting to modify the project by replacing the 17 extended stay
hotel rooms with 15 residential units, with a residential density bonus of 95%. Of the 15 residential
units, two one-bedroom units and two studio units will be dedicated for very-low income households.
The Zoning Regulations (§17.140.070(B)(3)) allows for a density bonus in excess of the standard
percentage increase (35%) to be requested and considered by the Planning Commission (Attachment
2, Density Bonus Request Letter, Project Plans, and Elevations).
Applicant Olive Street, LLC
Representative Thomas Shorey, NCARB
Zoning C-T (Tourist Commercial)
General Plan Tourist Commercial
Site Area ~22,454 square feet (0.52 acre)
Environmental
Status
Categorically Exempt from
environmental review under
Section 15332 (In-Fill Development
Projects) of the CEQA Guidelines
Meeting Date: August 26, 2020
Item Number: 3
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AFFH-0269-2020
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1.0 COMMISSION’S PURVIEW
Review the project for consistency with the General Plan and Zoning Regulations. Planning
Commission (PC) review is required for projects that include affordable housing alternative incentive
requests (Zoning Regulations § 17.140.070). As described below, the project design is in substantial
conformance with the current entitlement (ARCH-2946-2016), and the scope of the PC’s review is
limited to consideration of the density bonus request. Approval of the request will result in a total of
15 residential units, where 17 extended stay hotel rooms were previously approved.
2.0 PROJECT STATISTICS
Site Details Proposed Allowed/Required1
Lot Size 22,454 sq. ft. 9,000 sq. ft. (min)
Height of Structures 45 45
Max Building Coverage (footprint) 36% 75%
Density Units 13 DU (12.17 rounded up)
(with density bonus)
6.24 DU (max before
bonus)
Density Bonus 95%2 35%
Front Yard Setbacks
Side Yard Setbacks
53 feet (main structure)
0 feet
10 feet
0 feet
Vehicle Parking 35 spaces 25 spaces3
1Zoning Regulations - 2Incentive Requested - 3Entitlement ARCH-2946-2016 approved 25% parking space reduction
3.0 PREVIOUS APPROVAL
The City Council granted final approval of the project’s architecture and site design on January 3,
2017. The approval of the project’s design also included the approval of a 25% shared and mixed-
use parking reduction (Attachment 3, Council Resolution approving the project).
4.0 PROJECT ANALYSIS
The project’s architecture and site design have been previously approved. Minor changes include a
reduction of interior square footage of the fourth floor, replaced with additional deck area, and
modifications to the interior floor plans. The project’s design is in substantial conformance with the
current approval. The proposed density bonus will allow 15 residential units to be included in the
project, instead of 17 extended stay hotel rooms. The revised project also provides 3,162 square feet
of commercial/retail space, where the initial project provided 3,512 square feet of space(refer to Table
1. Project Comparison, below).
Table 1. Project Comparison
Current Entitlement Proposed Changes
Commercial/Retail Space 3,512 sq. ft. 3,162 sq. ft.
Hotel Use 17 rooms/suites 0
Residential Units 0 units 15 units
Parking Spaces Required 23 25
Parking Spaces Provided 35 35
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This change in the project must conform to the standards and limitations of the Zoning Regulations
and be consistent with the General Plan. Staff has evaluated the project and finds the project in
substantial compliance with the applicable standards, as discussed in this analysis.
4.1 Consistency with the General Plan
The Housing Element (HE) provides programs and policies that speak specifically to supporting
affordable housing projects. The project is consistent with the HE, which encourages the
consideration of increased density bonuses above state allowances where appropriate1 and directs
decisionmakers to promote higher densities2 and incentivize affordable housing through density
bonuses3. The project is also consistent with Conservation and Open Space Element (COSE) Policy
4.4.34 because the project promotes higher-density, compact housing to achieve more efficient use of
public facilities and services and to improve the City’s jobs/housing balance.
4.2 Consistency with the Zoning Regulations
The project design complies with lot coverage, setbacks, and building height requirements for the
Tourist Commercial (C-T) zone (Zoning Regulations Chapter 17.34), as was affirmed by the City
Council’s previous review and approval. The proposed change to the project, which would allow a
total of 15 residential units, also changes the number of required parking spaces. The parking provided
by the project meets current parking requirement standards for the commercial space and residential
units.
4.3 Affordable Housing Alternative Incentive
The City of San Luis Obispo has recognized housing as an important issue within the City. The City’s
Housing Element includes numerous policies and programs that support incentives, such as density
bonuses, to provide housing for low, very low and extremely low-income households. Per State law,
projects that provide affordable housing are allowed up to 35% density bonus based on the number
of deed-restricted affordable units provided in the project. Zoning Regulations Section
17.140.070(A)(3) states that three incentives or concessions shall be granted for housing
developments that include at least 15% for very-low income households. The proposed project
provides 35% of units, based on initial density, to be dedicated to very low-income households, and
thus may request three incentives or concessions. Chapter 17.140 of the Zoning Regulations
(Affordable Housing Incentives) outlines various incentives for affordable housing projects that
developers can request. Specifically, Zoning Regulations Section 17.140.040(A) provides that a
density bonus in excess of 35% can be approved at the request of the developer, and Section
17.140.070(B)(3) also identifies granting a density bonus in excess of State allowances as an
alternative incentive.
1 Housing Element Program 2.17: Continue to consider increasing residential densities above state density bonus allowances for
projects that provide housing for low, very low and extremely low income households.
2 Housing Element Policy 6.10: To help meet the Quantified Objectives, the City will support residential infill development and
promote higher residential density where appropriate.
3 Housing Element Program 6.19: Continue to incentivize affordable housing development with density bonuses, parking
reductions and other development incentives, including City financial assistance.
4 COSE Policy 4.4.3 Compact, high-density housing: The City will promote higher-density, compact housing to achieve more
efficient use of public facilities and services, land resources, and to improve the jobs/housing balance.
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The Department of Housing and Urban Development’s Housing Accountability Act and Density
Bonus Law provide protections for housing development projects generally and for those which
include density bonuses. Government Code Sections 65915(d)(1)(B) and (d)(3) prevent an agency
from denying the density bonus or the incentive or concession or refusing to waive or reduce
development standards, unless the agency can make a written finding, based on substantial evidence,
that the density units, the incentive or concession or the waiver or reduction in a development
standard: (1) does not result in identifiable and actual cost reductions to provide for affordable
housing; and (2) would have a “specific, adverse impact” upon the public health, safety, or the
physical environment, and for which there is no feasible method to satisfactorily mitigate or avoid the
specific adverse impact.5
Density Bonus as an Alternative Incentive Request: The site, zoned C-T, has an allowable density of
6.24 density units, based on the site’s net acreage (12 units per acre). The applicant is requesting a
density bonus of 95% as one of its alternative incentives, which would increase the total number of
density units to 12.17 (rounded up to 13 density units pursuant to Section 17.140.040(B)). To receive
the 95% density bonus as an alternative incentive, the applicant must dedicate a certain percentage of
the initially allowed units as affordable housing. Moreover, a density bonus for very-low income
dedicated units is calculated based on the rates of increase set by Table 8-3 of the Zoning Regulations
(see Zoning Regulations § 17.140.040(E).). Table 8-3 lists bonus percentages for dedications up to
11% and density bonuses up to 35%. Therefore, when an applicant is requesting a density bonus
larger than 35% as an alternative incentive (as outlined in Zoning Regulations § 17.140.040(E)), staff
expands Table 8-3 to establish the rates of dedication required for the requested density bonus. Here,
by expanding Table 8-3, staff has determined that the applicant must dedicate 35% of the initially
allowed units as very-low income housing to receive a 95% density bonus. For this project, the
applicant is proposing to dedicate two one-bedroom units and two studio units (2.32 of the 6.24 base
density units, or approximately 37% of its density base units) as very-low income, which is more than
the 35% dedication percentage needed to receive a 95% density bonus, per the expanded Table 8-3.
5.0 ENVIRONMENTAL REVIEW
The project is categorically exempt under Class 32, In -Fill Development Projects; Section 15332 of
the State California Environmental Quality Act (CEQA) Guidelines, because the project is consistent
with General Plan policies for the land use designation and is consistent with the applicable zoning
designation and regulations. The project site occurs on a property of no more than five acres that is
substantially surrounded by urban uses that has no value as habitat for endangered, rare or threatened
species. The project site is served by required utilities and public services. The project has been
reviewed by the City Public Works Department, Transportation Division, and no significant traffic
impacts were identified, based on the size and location of the project. Consistent with the previous
approval of the project, approval of the density bonus would not result in any significant traffic, noise,
air quality, or water quality impacts.
6.0 OTHER DEPARTMENT COMMENTS
All City Departments have reviewed the project and have provided comments that are incorporated
5 Government Code § 65589.5(j)(1). Definition of ‘Specific, Adverse Impact’: Significant, quantifiable, direct, and
unavoidable impact, based on objective, identified written public health or safety standards, policies, or conditions
as they existed on the date the application was deemed complete
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into the staff report and recommended resolution as conditions of approval.
7.0 ACTION ALTERNATIVES
7.1 Continue the item. An action to continue the item should include a detailed list of additional
information or analysis required.
7.2 Deny the project. An action denying the application should include findings that cite the basis
for denial and should reference inconsistency with the General Plan, Community Design
Guidelines, Zoning Regulations or other policy documents. Should the Planning Commission
want to pursue this alternative, Staff recommends that the specific findings under Government
Code §§ 65915(d)(1)(B) and (d)(3) are adequately addressed.
8.0 ATTACHMENTS
1. Draft Resolution
2. Density Bonus Request Letter, Project Plans, and Elevations
3. Council Resolution approving the project
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RESOLUTION NO. PC-XXXX-20
A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF
SAN LUIS OBISPO, CALIFORNIA, APPROVING A RESIDENTIAL
DENSITY BONUS OF 95% AS AN AFFORDABLE HOUSING INCENTIVE
ALLOWING 15 RESIDENTIAL UNITS, INCLUDING FOUR UNITS
DESIGNATED FOR VERY-LOW INCOME HOUSEHOLDS, WITHIN A
PREVIOUSLY APPROVED MIXED-USE PROJECT, WITH A
CATEGORICAL EXEMPTION FROM ENVIRONMENTAL REVIEW, AS
REPRESENTED IN THE STAFF REPORT AND ATTACHMENTS DATED
AUGUST 26, 2020 (AFFH-0269-2020).
WHEREAS, the City Council of the City of San Luis Obispo adopted Resolution No.
10766 (2017 Series) approving the development of a four-story mixed-use project on January 3,
2017, pursuant to a proceeding instituted under ARCH-0568-2016, Garcia Family Trust, applicant;
WHEREAS, the Planning Commission of the City of San Luis Obispo conducted a web
based public hearing on August 26, 2020, pursuant to a proceeding instituted under AFFH-0269-
2020, Olive Street LLC, applicant; and
WHEREAS, notices of said public hearings were made at the time and in the manner
required by law; and
WHEREAS, the Planning Commission of the City of San Luis Obispo has duly considered
all evidence, including the testimony of the applicant, interested parties, and evaluation and
recommendations by staff, presented at said hearing.
NOW, THEREFORE, BE IT RESOLVED by the Planning Commission of the City of
San Luis Obispo as follows:
SECTION 1. Findings. The Planning Commission hereby grants final approval to the
project (AFFH-0269-2020), based on the following findings:
1. The requested density bonus will not be detrimental to the health, safety, and welfare of
persons living or working at the site or in the vicinity because the project will be compatible
with site constraints and the scale and character of the neighborhood.
2. The requested density bonus and changes to project plans are consistent with Council
Resolution No. 10766 (2017 Series), approving the project design submitted under ARCH-
0568-2016, because the project has not increased in overall square footage and all
architectural features and design elements are retained.
3. The requested density bonus is consistent with Housing Element Program 2.17, which
encourages the City to consider residential densities above the state density bonus allowance
for projects providing housing for very-low income households.
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Resolution No. PC-xxxx-20
1042 Olive Street, AFFH-0269-2020
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4. The requested density bonus is consistent with the intent of Housing Element Policy 6.10 and
Program 6.19, because it promotes higher residential densities and incentivizes affordable
housing by providing a density bonus.
5. The requested density bonus is consistent with Conservation and Open Space Element Policy
4.4.3 because the project promotes higher-density, compact housing to achieve more efficient
use of public facilities and services and to improve the City’s jobs/housing balance.
6. The requested density bonus will provide quality affordable housing units consistent with the
intent of Chapter 17.140 of the Zoning Regulations.
SECTION 2. Environmental Review. The project is categorically exempt under Class
32, In-Fill Development Projects; Section 15332 of the State California Environmental Quality
Act (CEQA) Guidelines, because the project is consistent with General Plan policies for the land
use designation and is consistent with the applicable zoning designation and regulations. The
project site occurs on a property of no more than five acres that is substantially surrounded by
urban uses that has no value as habitat for endangered, rare or threatened species. The project site
is served by required utilities and public services. The project has been reviewed by the City Public
Works Department, Transportation Division, and no significant traffic impacts were identified,
based on the size and location of the project. Consistent with the previous approval of the project,
approval of the density bonus would not result in any significant traffic, noise, air quality, or water
quality impacts.
SECTION 3. Action. The project conditions of approval do not include mandatory code
requirements. Code compliance will be verified during the plan check process, which may include
additional requirements applicable to the project. The Planning Commission hereby grants final
approval to the project with incorporation of the following conditions:
1. Final project design and construction drawings submitted for a building permit shall be in
substantial conformance with the project plans approved by City Council Resolution No.
10766 (2017 Series) and approved by the Planning Commission on August 26, 2020. A
separate, full-size sheet shall be included in working drawings submitted for a building permit
that lists all conditions, from both the design and density bonus approvals, listed as sheet
number 2. Reference shall be made in the margin of listed items as to where in plans
requirements are addressed. Any change to approved design, colors, materials, landscaping,
or other conditions of approval must be approved by the Director or reviewed by the
Architectural Review Commission and approved by the Director or Planning Commission, as
deemed appropriate.
2. Prior to issuance of building permits, the City and the project owners shall enter into an
Affordable Housing Agreement, to be recorded in the office of the County Recorder. The
agreement shall specify mechanisms or procedures to assure the continued affordability and
availability of the four very-low income units consistent with Table 8-3 of the Zoning
Regulations (§17.140.040.E), to the satisfaction of the Community Development Director.
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Resolution No. PC-xxxx-20
1042 Olive Street, AFFH-0269-2020
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Indemnification
3. The applicant shall defend, indemnify and hold harmless the City and/or its agents, officers
and employees from any claim, action or proceeding against the City and/or its agents,
officers or employees to attack, set aside, void or annul, the approval by the City of this
project, and all actions relating thereto, including but not limited to environmental review
(“Indemnified Claims”). The City shall promptly notify the applicant of any Indemnified
Claim upon being presented with the Indemnified Claim and the City shall fully cooperate in
the defense against an Indemnified Claim.
On motion by ________________, seconded by _________________, and on the following
roll call vote:
AYES:
NOES:
REFRAIN:
ABSENT:
The foregoing resolution was passed and adopted this 26th day of August 2020.
_____________________________
Tyler Corey, Secretary
Planning Commission
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1042 Olive Street
AFFH-0269-2020
Review of an affordable housing incentive request for a
previously approved mixed -use project. The requested
incentive is a density bonus of 95%, which is higher than
the standard incentive of 35%.
August 26, 2020
Applicant: Olive Street LLC Representative: Thomas Shorey
Recommendation
Adopt a resolution approving the affordable
housing incentive request of 95%, subject to
findings and conditions of approval.
Focus of Review
3
PC review due to:
◼Affordable housing alternative incentive request of a
density bonus in excess of standard incentives.
Background
5
◼Project approved by the Architectural Review
Commission on October 3, 2016, and by City Council
on January 3, 2017 after appeal.
▪Four-story Mixed-Use building; 17 extended stay
hotel rooms and 3,512 sq. ft. commercial/retail
space.
◼Applicant submitted for a density bonus, June 2020.
▪15 residential units; replacing 17 hotel rooms
▪Modification to previous entitlement not warranted.
Project Comparison
7
Current Entitlement Proposed Changes
Commercial/Retail Space 3,512 sq. ft. 3,162 sq. ft.
Hotel Use 17 rooms/suites 0
Residential Units 0 units 15 units
Parking Spaces Required 23 25
Parking Spaces Provided 35 35
Project Analysis: Density Bonus
8
Requests for density bonuses that exceed the standard
amount can be requested:
◼Standard Amounts:
◼If: 20 units allowed
+ dedication of 2 units
= 26.5 units now allowed (27 units)
(20 + 32.5% bonus)
% of Units Dedicated % Denisty Bonus
5 20
6 22.5
7 25
8 27.5
9 30
10 32.5
11 35
8-3 Very Low Income
Project Analysis: Density Bonus
9
Requests for density bonuses that exceed the standard
amount can be requested:
◼Amounts Requested as Incentive :
◼If: 20 units allowed
+ dedication of 7 units
= 39 Units now allowed
(20 + 95% bonus)
% of Units Dedicated % Density Bonus
5 20
6 22.5
7 25
8 27.5
9 30
10 32.5
11 35
12 37.5
13 40
34 92.5
35 95
36 97.5
8-3 Very Low Income
Project Analysis: Density Bonus
10
Requests for density bonuses that exceed the standard
amount can be requested:
◼Amounts Requested as Incentive:
◼If: 20 units allowed
+ dedication of 7 units
= 39 Units now allowed
(20 + 95% bonus)
% of Units Dedicated % Denisty Bonus
5 20
6 22.5
7 25
8 27.5
9 30
10 32.5
11 35
12 37.5
13 40
34 92.5
35 95
36 97.5
8-3 Very Low Income
Project Analysis: Density Bonus
11
Requests for density bonuses that exceed the standard
amount can be requested:
◼Proposed Bonus:
◼6.24 DU allowed
+ dedication of 2.32 DU
= 12.17 DU allowed (13)
(6.24 DU + 95% bonus)
% of Units Dedicated % Denisty Bonus
5 20
6 22.5
7 25
8 27.5
9 30
10 32.5
11 35
12 37.5
13 40
34 92.5
35 95
36 97.5
8-3 Very Low Income
Recommendation
Adopt a resolution approving the affordable
housing incentive request of 95%, subject to
findings and conditions of approval.
Project Analysis: Inclusionary Housing
13
◼Inclusionary housing requirement.
◼Inclusionary housing is covered by the inclusion of
affordable housing in project.
◼Inclusionary unit required can be subject to City standards
and policies.
◼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.
Project Analysis: Inclusionary Housing
14
Condition #2.
Prior to issuance of building permits, the City and the project
owners shall enter into an Affordable Housing Agreement, to
be recorded in the office of the County Recorder. The
agreement shall specify mechanisms or procedures to assure
the continued affordability and availability of the four very-low
income units consistent with Table 8-3 of the Zoning
Regulations (§17.140.040.E), to the satisfaction of the
Community Development Director. At least one two-bedroom
unit of comparable size to the market rate units shall be
included in the agreement.
Traffic Concerns
15