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HomeMy WebLinkAbout11/17/2020 Item 16, Codron/Cohen -- Staff Correspondence Council Agenda Correspondence City of San Luis Obispo, Council Memorandum November 13, 2020 TO: City Council FROM: Rachel Cohen, Associate Planner VIA: Michael Codron, Community Development Director th SUBJECT: Item #16: Review of the 6 Cycle Housing Element Update Dear Mayor and Council Members, On August 14, 2020, the City received a letter from California Rural Legal Assistance, Inc. comments about purported deficiencies of the Draft Housing Element Update. On September 1, 2020, prior to the City Council meeting that evening, the City received another letter from CRLA that contained comments regarding the revised Housing Element Update. City Staff has had an opportunity to review these letters and provide a written response to CRLA addressing their comments provided in the September 1, 2020 letter. Attached to this Council Agenda Correspondence is a copy of the response letter that staff has sent to CRLA. City of San Luis Obispo, Community Development, 919 Palm Street, San Luis Obispo, CA, 93401-3218, 805.781.7170, slocity.org November 13, 2020 California Rural Legal Assistance, Inc. c/o Vincent Escoto, Staff Attorney 175 Santa Rosa Street San Luis Obispo, CA 93405 th Re: 6 Cycle Housing Element Update Dear Vincent Escoto: On August 14, 2020, the City received a letter from California Rural Legal Assistance, Inc. th (CRLA) regarding the 6 Cycle Housing Element Update. The letter contained detailed comments about purported deficiencies of the Draft Housing Element Update. On September 1, 2020, prior to the City Council meeting that evening, the City received another letter from CRLA that contained comments regarding the revised Housing Element Update that was reviewed by Council at their September 1, 2020 Council meeting . Both letters were shared with City Staff and the California Department of Housing and Community September 1, 2020. During the time these letters were received, the City was, and continues to work, with HCD th to ensure that Cycle Housing Element Update is consistent with state law. On September 4, 2020, the City received formal comments on the draft Housing Element Update, in which it acknowledged receipt and consideration of s when providing the formal feedback. letter mirrored several comments posed by CRLA but did not include many of the same items identified by CRLA. The City share suggestions with the City and draw its attention to purported deficiencies, and the City has made some revisions to the draft Housing Element Update accordingly. The purpose of this letter is to respond to the items raised in September 1, 2020 . Please find below a detailed response to the comments raised in the Letter in the order in which they appeared. All references to the revised Housing Element Update can be found online at: https://www.slocity.org/home/showdocument?id=28501. 1 I. Public Outreach, Participation & Noticing Section 65583(c)(9)) The Letter states that the City did not make a diligent effort to provide adequate public participation on the draft Housing Element Update. Respectfully, the City disagrees; the Housing Element Update outreach has been a series of public outreach events to collect a range of information from the public as well as from various stakeholder groups. The full website for public review since the beginning of July 2020 and has been publicly reviewed by the Planning Commission and the City Council and public input has been sought at each of these public meetings. Additionally, on October 28, City staff posted a revised full Draft Housing Element Update, The City reached out to a variety of interested parties, stakeholders, and local organizations throughout the Housing Element Update process. All lists were updated whenever any group or individual contacted the City about wanting more information. To provide additional clarity on this process, Appendix G , page G1 of the Housing Element was revised. Appendix G also includes an updated list of local groups that were contacted throughout the process and the addition of other groups as the final draft of the Housing Element Update was circulated for public comment on October 28, 2020. In total, the City directly notified, via the interested parties list, 40 individuals, 25 local agencies and non-profit organizations, and nine local tribes. Contrary to your representation, the City provided proper notice of the July 22, 2020 Planning Commission meeting, in which the Planning Commission reviewed and recommended approval of the draft Housing Element Update. updated to provide a link to the Planning Commission Staff report and the Housing Element Update in advance of the July 22, 2020 meeting. Further, every item that goes to the Planning and within the New Times local paper one week before the meeting. In addition to discussing the Housing Element Update at public meetings, the City facilitated several presentations, two online surveys, and a public workshop. Most recently, the City published the revised Housing Element dditional feedback from the community by notifying stakeholder groups, those on the interested parties list, newspaper. Below is a list of the presentations, workshops, and online surveys conducted over the last year. Association of Realtors Presentation July 23, 2019 Housing Element Workshop December 10, 2020 Online Survey December 10, 2019 January 10, 2020 Chamber of Commerce (Economic Development Committee) Presentation April 2, 2020 Economic Vitality Corporation and the Home Builders Association Presentation May 13, 2020 Chamber of Commerce (Economic Development Committee) Presentation June 4, 2 2020 Online Survey June 8, 2020 June 24, 2020 San Luis Obispo County Housing Summit (hosted by the Chamber of Commerce) Presentation September 10, 2020 Request for Additional Community Feedback - October 29, 2020 November 17, 1 2020 (Council meeting) In addition to these presentations, workshops, and online surveys, the public was invited to participate in the Housing Element Update via the following public hearings: City Council Meeting September 1, 2020 Planning Commission Meeting July 22, 2020 Planning Commission Meeting June 10, 2020 Human Relations Commission Meeting June 3, 2020 Planning Commission Meeting April 24, 2019 Public Forum and City Council Meeting April 2, 2019 Staff is continuing to request public feedback on the Housing Element Update up until the City Council makes its final decision on November 17, 2020. Finally, the City offers translation services to individuals who speak Spanish at any time. Indeedaccess information in the language they are most fluent. Further, on October 29, 2020, City staff posted the release of the revised Housing Element Update in both Spanish and English in the New Times. II. Review of Previous Housing Element Section 65588(a)) The Letter stated that the City did not adequately review and analyze the progress of the goals, th policies, and programs of the current 5 Cycle Housing Element, as purportedly required by Gov. Code Section 65588(a). Additionally, it states that the City failed to evaluate the appropriateness quantified goals, policies and program and provide th an explanation as to why certain goals, policies and programs were removed from the 5 Cycle Housing Element. The Housing Element of a general plan must contain specific components, analyses, goals, and policies, as identified in Government Code Section 65583. By contrast, Government Code Section 65588(a) is a scheduling provision that requires local agencies to review and evain the statute and in your letter, but such analysis is not required to be included in the Housing th Element. Appendix H provides an update on the goals, policies, and programs of the 5 Cycle Housing Element. Additionally, both the September 1, 2020 (http://opengov.slocity.org/WebLink/DocView.aspx?id=127856&dbid=0&repo=CityCler k) and the November 17, 2020 (https://www.slocity.org/Home/ShowDocument?id=28433) 1 No comments have been received as of November 13, 2020. 3 City Council Agenda Reports contain matrixes that explain why staff is proposing changes to the current Housins. Further, the City publishes a General Plan Annual Report (available to the public each year) that evaluates the progress in accomplishing the programs outlined in the General Plan including the Housing Element (http://opengov.slocity.org/WebLink/DocView.aspx?id=106768&dbid=0&repo=CityCler k). Finally, the City has been in continuous contact with HCD, and HCD has not identified on. III. Demographic Analysis Employment and Population Trends Section 65583(a)(1)) The Letter states that the City because it did not sufficiently quantify each , that the City should have use unemployment trends, and that the City should have analyzed the demographics and characteristics of those participating in public health programs. While the City va comments, the City believes the Housing Element Update adequately analyzed employment and population trends as required by state law. California Government Code Section 65583(a)(1) requires the assessment and inventory of resources relevant to meeting the housing needs within the City to include, inter alia, an analysis of population and employment trends. HCD provides further guidance regarding the 2 requisite analysis of population and employment trends. First, the Draft Housing Element Update sufficiently quantifies each industry within the City. As required by HCD guidance, Table A-9, of Appendix A, identifies the workforce industries within the City based on U.S. Census American Community Survey data (see footnote 1). Second, the Housing Element Update properly relies on California Employment Development data to analyze uneInformation regarding employment data can be found using the U.S. Census American Community Survey 3 data . . Whenever possible, local information that was published by local organizations was used, however this information was rarely available. Therefore, the City relied on reliable data, recognized by HCD, to evaluate employment trends within the City. 2 Population trends analysis must: (1) discuss current population and recent trends; (2) describe amount or rate of population growth; (3) compare population and rates of growth to the countywide or regional total to surrounding jurisdictions; describe popu(https://hcd.ca.gov/community-development/building- blocks/housing-needs/population-employment-household-characteristics.shtml); Employment trends analysis must: (1) describe employment by industry using the most-recent U.S. Census American Community Survey data; (2) discuss opportunities for promoting and improving jobs-housing balance; (3) identify some of the larger employers in the area and typical types of jobs and earnings; and (4) generally discuss wage ranges of major employers and employment sectors and related housing needs for employees earning those wages. 3 https://www.hcd.ca.gov/community-development/building-blocks/housing-needs/population-employment- household-characteristics.shtml 4 Third, Appendix A includes the requisite analysis for population and employment trends under Government Code Section 65583(a)(1) and HCD guidance (see requirements in footnote 1). The City is unaware of state law or HCD guidance requiring the Housing Element Update to analyze the demographics and characteristics of those participating in public housing programs as part of the population and employment trends analysis. IV. Households & Housing Characteristics Analysis Section 65583(a)(2)) The Letter states that the City fails to adequately assess household and housing characteristics per California Government Code Section 65583(a)(2). The Letter provides that the City should have conducted a more detailed review of: the causes of low vacancy rate and high rate of overpayment in the City; the extent of substandard housing in the City, including an analysis of mold, rodents, etc.; that City to analyze housing stock; and that the City should the public on or enforce habitability problems. The Housing Element Update adequately documents and analyzes household characteristics. Government Code Section 65583(a)(2) requires and documentation of household characteristics, including level of payment compared to ability to pay, housing characteristics, including overcrowding, and housing sto The City used information that was available in both the US Census and Department of Finance to analyze and document the required information. Moreover, HCD Guidance specifically states that information needed to analyze household characteristics can be found using the US Census, most recent U.S. Census American Community Survey, and the 4 California Department of Finance. Whenever possible, local information that was published by local organizations was used, including a September 2020 Housing Condition windshield survey conducted by City staff. Appendix A, Section 1(g), Page A15 of the Housing Element Update has been revised to include the results of the windshield survey. The windshield survey was designed and executed based on guidance from HCD regarding best practices for housing stock surveys and analysis. Further, Appendix A provides information on the population that makes up the City as well as employment, household information, incomes levels, age of housing stock and other details. Additionally, Code Enforcement and other City staff provide education regarding habitability problems and how to address them whenever possible. The most recent revision to the Housing Element Update staff shall continue to provide property owners and tenants with information on how to rectify violations, who to contact in Code Enforcement for assistance, and other resources that may be pertinent to the citation.The Housing Element Update also adds Program 1.4, which identifies ways to support Affirmatively Further Fair Housing (AFFH). 4 Id. 5 V. Special Needs Housing Section 65583(a)(7)) The Letter asserts that the City failed to adequately analyze the housing needs of all special needs demographics. Specifically, the Letter argues that the City should have, inter alia, collected more data, analyzed demographics and income category of each special needs group, analyzed availability of housing options for each special needs group, and quantified the number of units for each special needs category. analysis of special housing needs includes all legally required components under applicable state law. special housing needs, such as those of the elderly, persons with disabilities, including a developmental disabilitylarge families, farmworkers, families with female heads of households, and provides that a requisite analysis under Section 65583(a)(7) should include: 1) a quantification of the total number of persons and households in the special housing needs group, including tenure (rental or ownership), where possible; 2) a quantification and qualitative description of the need, a description of any existing resources or programs, and an assessment of unmet needs; and 3) identification of potential program or policy options and resources to address 5 the needs. Neither the text of the statute nor HCD guidance requires local agencies to analyze the housing needs of the enumerated special needs groups by income category, ethnicity, race, or household characteristics as the Letter suggests. The Draft Housing Element Update complies with Section 65583(a)(7) nes. Specifically, the Update quantifies the total number of people and households within each special needs group, describes the need faced by each, assesses the unmet needs of those groups, and identifies programs and policies to address those needs. (See, e.g., Appendix B, Section 2(a), Page B7-B10.) The City used information that was available in both the US Census and from the California Department of Finance. Whenever possible, local information that was published by local organizations was used, however this information was rarely available. Further, the City provides for reasonable a Reasonable Accommodation Ordinance, which allows for any residential unit to request flexibility in development standards and zoning to support equal access to housing (Appendix B, Section 1(l), Page B23 and Appendix C, Page C4). A. Developmental Disabilities The Letter asserts that the Housing Element Update fails to adequately analyze the housing needs of persons with developmental disabilities because it does not analyze this subset of the population by income category, does not analyze the availability of housing for this subset of the population, and does not analyze the types of disabilities existing facilities within the City accommodate. The Housing Element Update Appendix B, Section e (starting on Page B14), provides discussion and data regarding those individuals with developmental disabilities. Depending 5 https://www.hcd.ca.gov/community-development/building-blocks/housing-needs/people-with- disabilities.shtml 6 on the individual, various types of housing accommodation may be needed. Further, Program 8.20 specifically addresses housing for those with developmental disabilities and states, Actively seek and collaborate with non-profit housing providers to (jointly) apply for two revenue sources each year during the planning period for State, Federal, and local funding sources to encourage and financially assist with the development of housing for persons with developmental disabilities. The City has engaged in continuous communication with HCD and at no point has HCD identified concerns w housing needs for those with developmental disabilities. In addition, the City has updated its Zoning Regulations with objective standards for universal design that allow for design solutions that support people with developmental disabilities. B. Emergency Shelters & Homeless Persons The Letter criticizes the City for relying on the County Point of Contact data to analyze the needs of homeless persons and states that the City failed to analyze the housing needs of homeless because it did not analyze various subsets of homeless persons, did not analyze the eligibility and management rules of local shelters, and did not analyze funding sources available for supporting housing. However, neither the text of the statute nor HCD guidance requires local agencies to analyze this special housing need in the manner the Letter indicates. Appendix B, Section 1(f), Page B15 of the Housing Element Update discusses Homeless Persons and Transitional Housing and analyzes the information required by Section 65583(a)(7) and HCD guidance (See infra Section V). Indeed, this Section was recently revised per HCD direction. For example, Section 1(f) now provides specific acreage (16 acres) that is available within the City that can accommodate Homeless Shelters (which also includes Emergency Shelters). These are parcels that are zoned Public Facility (PF) and allow a Homeless Shelter without a use permit. Each of the sites identified is conveniently located with ¼ mile of a transit stop allowing access to services within the City and regionally. Additionally, as mentioned previously, staff utilized the information available from the US Census Bureau and the California Department of Finance, as well as information from the 2019 San Luis Obispo County Homeless Point-in-Time Census and Survey Report. C. Farmworkers The Letter states that the Housing Element Update improperly relies on US Census Bureau - American Community Survey (ACS) data only to identify the farmworker population within the City and, as such, fails to analyze the housing needs of farmworkers. Neither the text of Government Code Section 65583(a)(7) nor HCD guidance prohibit the City from utilizing ACS data to identify the farmworker population. Critically, 2017 ACS is the most up to date data that identifies the farmworker population within the City. Additionally, HCD guidance identifies USDA Census data as a source for evaluating farmworker housing needs. Accordingly, Table B-21, of Appendix B, relies on USDA Census data to analyze the farm operations within San Luis Obispo County. Further, the Housing Element Update provides additional information within Appendix B, starting at page B19, regarding the Employee Housing Act, which outlines requirements for farmworker/agricultural workers. (Cal. Gov Code §§ 17021.5, 17021.6.) 7 Per HCD direction, the City revised the Housing Element Update to ensure consistency with the Employee Housing Act. To address conflicts between Zoning Regulations and the Employee Housing Act and to ensure compliance with Government Code Section 65583(c)(1)(C), the City is including new Program 8.23, which requires an update to the Zoning Regulations, including: 1) an update of Table 2-1 to allow single-unit dwellings without a conditional use permit (i.e., by right) within the Open Space and Conservation (C/OS) zone and allow employee housing consisting of no more than 36 beds in a group quarters, or 12 units or separate rooms, or spaces designed for use by a single-family or household, within the C/OS and AG zones, and 2) Removal of Chapter 17.148 - High- Occupancy Residential Use Regulations. D. Elderly The Letter states that the City failed to analyze the housing needs of the elderly population because the Housing Element Update does not consider Section 8 availability and general vacancy rates for elderly housing this subset of the population, analyze available funding sources or public services for the elderly, or analyze the elderability to afford housing in the City. The Housing Element Update analyzes the required components provided under Section 65583(a)(7) and HCD guidance (See infra Section V). Specifically, Appendix B, Table B-9 (on page B9) lists the facilities within the City that provide special needs and elderly housing. Table B-9 also provides the total capacity for each facility as well as the groups of people they serve. Further, it is worth noting that new California law prohibits landlords from discriminating against tenants who use Section 8 housing vouchers to pay their rent. This development in state law should provide for additional units to be available to low income individuals/families, including the elderly population. VI. Analysis of At-Risk Housing Sites Section 65583(a)(9)) The Letter states the Housing Element Update fails to analyze whether deed-restricted units are eligible for conversion in the next 10 years and to adequately analyze housing that is eligible for conversion per Government Code Section 65583(a)(9)(A)-(D). The City responds to these points in turn below: First, the Housing Element Update does in fact identify which deed-restricted units are eligible for conversion in the next 10 years. Moreover, Table 6, Page 36, indicates that 97 units are at- risk of conversion in the next 10 years and is accompanied by a thorough analysis of these at- risk units on Page 36 through 38 of the draft Housing Element Update. All the other deed restricted units are not eligible for conversion in the planning period of the Housing Element th because the deed restriction agreement will not expire within the 6 Cycle Housing Element planning period. Second, the Housing Element Update indicates that approximately 68 units subject to conversion in the next 10 years are elderly units (all at the Anderson Hotel) whereas the remaining 29 units (total between Adriance Court and Poinsettia Street Apartments) are non- elderly units (see Appendix B, Table B-9; Page 36). City staff will revise the draft Housing 8 Element Update to clarify this point in accordance with California Government. Code Section 65583(a)(9)(A).) Third, in accordance with Section 65583(a)(9)(B), Page 38 of the Housing Element Update details the cost of building new rental units that are comparable in size and rent levels, to replace the units subject to conversion, and to preserve the assisted housing developments. Contrary to the project used as a baseline for the cost of the replacement unit to be comparable in size and rent levels to the projected replacement units, but rather that the replacement units be comparable in size and rent levels to the existing units to be replaced. The cost projection detailed on Page 38 of the Housing Element Update complies with state law requirements. Fourth, a revision has been made to the Housing Element Update identifying the public and private nonprofit corporations known to the City that have the legal and managerial capacity to acquire and manage assisted housing developments (see Page 37 of the Housing Element Update). Fifth, consi Element Update provides financing information for acquisition and rehabilitation of low- income housing, including local funding resources. Because the City participates in the Federal side of available community development funding programs, via the non-entitlement Urban County programs (CDBG, ESG, HOME), which is overseen by the County of San Luis Obispo Housing Division, funding availability is determined on an annual basis via a HUD formula. That funding is then allocated for aspiring projects located within the City limits, and funding of eligible projects is ultimately approved by the County Board of Supervisors. Therefore, it is impossible to quantify the future funding that will be utilized, as well as the amount of funding that will be used to fund affordable housing projects, as there are several other eligible activities these funding sources can be used to financially support. However, the City has historically recommended, and the Board has approved, these funds to assist with activities associated with constructing, rehabilitating, preserving, and conserving affordable housing. VII. Analysis of Land and Resources for Affordable Housing (Cal. Section 65583(a)(3)) The Letter asserts that the Housing Element Update does not identify the location of extremely low-income sites and fails to identify adequate sites for affordable housing development. However, the Housing Element Update indeed identifies both. First, the extremely low-income category is included as part of the low and very low-income projections. Page A-11 in Appendix A, Table A-19 provides the California Income Category Limits. As you will note, the Extremely Low and Very Low-income categories are grouped together. Appendix B, on page B5, includes an additional discussion on Extremely Low- income Households. Second, the revised Housing Element Update includes revisions to the inventory that shows sites that can accommodate housing, in particular, low and very low-income housing, 9 including extremely low-income housing. In accordance with Government Code Section 65583.2(c)(2)(A)-(B), sites that are 0.5 acres or smaller and sites that are 10 acres or larger are no longer included in the inventory as being able to accommodate low income housing (see Appendix E, Table E-2). Development Potential of Nonvacant Sites (California Government Code Section 65583.2(g)(2)): Section 65583.2(g)(2) provides that when a city is relying on nonvacant sites to accommodate 50 percent or more of its housing need for lower income households, the methodology used to determine additional development potential shall demonstrate that the existing use identified does not constitute an impediment to additional residential development during the planning period. The Housing Element Update demonstrates potential of non-vacant sites for development and there is ample evidence that the existing use is likely to be discontinued during the planning period. As a threshold matter, t direction. Additionally, 56 percent of the low-income unit sites are within specific plan areas. (See Page E28, Table E-3.) Although these sites are categorized as non-vacant or underutilized, there is substantial evidence that any existing uses will be discontinued in the planning period. Moreover, the Avila Ranch and San Luis Ranch Specific Plan Areas have Development Agreements in place that require a specific and quantifiable number of deed restricted affordable units to be built. The Orcutt and Margarita Specific Plan Areas contain parcels that are zoned for high density residential development, which is often utilized for low-income housing (See Government Code §65583.2 (c)). Thirteen percent of the sites identified low-income RHNA are that include affordable units (see Appendix E, Tables E-2 and E-3). residential projects that are presently going through the planning review process but have not yet received entitlements. Given the nature of these projects and the strong City and Community commitment to housing, coupled with market demand, the City is confident that the existing use on the sites will be discontinued during the planning period (i.e., upon conclusion of the planning review process). Further, Appendix D, Tables D-7 and D-8 list housing development projects on non-vacant and underutilized sites that have been approved or constructed within the last two years. These projects reflect a development pattern within the City to develop non-vacant sites and serves as evidence that existing uses on non-vacant sites identified in the inventory are likely to be discontinued. Finally, Program 2.17 has been added to the Housing Element Update (see City Council Agenda Report) to encourage and support the development of housing projects that includes sites for lower income households on non-vacant and vacant sites previously identified in the Housing Element (Table E-2), the City will, within one (1) year of the adoption of the Housing Element Update, allow developments (including mixed-use projects) that include at least 20 10 percent of the residential units as affordable to lower income households, by right (no d its support of this new program. Number of Units per Site and Appropriateness for Low-Income Housing (California Government Code Section 65583.2(c)(1),(3)): The Letter states the Housing Element does not identify adequate sites to accommodate the need for low and very low income households. Further, the Letter asserts that the City should rezone sites with minimum densities in accordance with California Government Code Section 65583(c)(1)(A). However, in 2018, the City updated its Zoning Regulations for consistency with the 2014 Land Use Element update, allowing 20 density units per acre within R-3 zones. This means that R-3, R-4, C-R, C-D, C-C, C-S, and M zones allow 20 density units or more per acre (see Table D-6, page D10 for maximum allowed densities per zone). The Housing Element Update notes that 62 acres identified in the inventory can be developed at densities of at least 20 dwellings per acre and therefore, considered suitable for affordable housing development (see page D3). Since the RHNA based on existing zoning, the City is not obligated to include a program to rezone sites in accordance with the by-right process and minimum densities under Section 65583(c)(1)(A). Additionally, the Draft Housing Element Update realistically states the number of units per site. Per Section 65583.2(c)(1),(3), if a city does not adopt a regulation requiring the development of a site at a minimum density, then it shall demonstrate how the number of units determined for that site will be accommodated and provide an analysis demonstrating how the adopted densities accommodate this need. Appendix D, Tables D-7 and D-8 indicate that over half the sites that have been recently approved and/or developed with housing projects have densities above 75 percent. Thus, will be developed at 75 percent of the maximum allowable density per acre is realistic and based on quantifiable development patterns in the City. Adequate Sites and Demonstrated Potential for Accessory Dwelling Units (California Government Code Section 65583.1(a)): The Letter asserts that the City cannot count 270 ADUs towards its RHNA allocation without identifying sites for each one and that the Housing Element Update fails to demonstrate that the potential for the 270 ADUs estimated to be built within the planning period. The Housing Element does not identify specific sites for the estimated ADUs because the ADUs to -unit residential dwellings, multi-unit residential dwellings, or mixed-use development (per Table 2.1), where a single-family structure, duplex or multifamily structure is existing or proposed. The existin This means that an ADU may be constructed within the R-1, R-2, R-3, R-4, O, C-N, C-C, C- R, C-D, C-T, C-S, M, AG and C/OS zones. The only zones they are not allowed in are BP and PF because residential uses are not allowed on these sites. Additionally, the Letter asserts that the Housing Element Update inflates its estimate of ADUs that will be built in the planning period by averaging the number of ADUs built between 2017- 2019 rather than over the entire previous planning period and does not consider factors required by Section 65583.1(a) when determining the adequate number of sites available for 11 ADUs. HCD directed the City to count ADUs towards their RHNA and, based on a recent study completed by the County with data from the City and other jurisdictions in the County, 50 percent of ADUs qualify as low or very low income. ADU construction rates in San Luis Obispo have been increasing in recent years (averaging about 30 units per year from 2017 through 2019) and ADUs are also now an option for additional units on multifamily properties (starting in January of 2020). Based on direction from HCD, the City has extrapolated that ADU construction will continue at a similar rate of construction for the planning period, which are likely lower because the January 2020 changes to state law and the Citys update to the Zoning Regulations significantly streamlines approval and incentivizes construction of ADUs. Further, as the Letter points out, Section 65583.1(a) provides that the department should consider, inter alia any other rele been significant change in state law offering increased incentives for construction of ADUs tion and restrict their occupancy. As such, it would be inaccurate to rely solely on the average number of ADUs built over the entire 5th cycle planning period, as recent developments in state law and updates to our zoning regulations have resulted in demonstrable increases in the actual number of ADUs being built beginning in 2017 and that causal relationship is supported by feedback provided directly by ADU applicants to the City. Additionally, the City further incentivizes ADU construction by exempting them from development impact fees. Accordingly, the Housing Element Update relies on data from when applicable state law changed and is considering the other factors enumerated in Sec ake a reliable estimate of ADU development in the next planning period. VIII. Statement of Goals, Quantified Objectives, & Policies The Letter states that the Housing Element Update did not sufficiently provide goals, policies, and programs to address the needs identified in the Housing Element Update. Respectfully, the City disagrees. Further, it is worth noting that HCD has indicated that the City had more policies and programs than typically seen in Housing Elements. Nonetheless, the City responds below to the assertions made in the Letter regarding its statement of goals, policies, and programs in the order in which they are made in the Letter. A. Programs for Housing Conditions The Letter asserts that the City fails to establish meaningful goals, policies, and programs to identify, correct, and educate tenants about habitability problems within the City. The September 2020 revisions to the Housing Element include modifications to Programs 1.5 and 1.6 to address safety an to promote safe housing. Additionally, Programs 4.7 and 4.8 discuss how the City will support and educate the community with fair housing. For example, Program 1.6 was revised to include a second sentence that focuses on providing resources to property owners and tenants to raise concerns over illegal or unsafe or hazardous dwellings. Continue code enforcement to expedite the removal of illegal or unsafe dwellings, 12 to eliminate hazardous site or property conditions, and resolve chronic building safety problems. Code Enforcement staff shall continue to provide property owners and tenants with information on how to rectify violations, who to contact in Code Enforcement for assistance, and other resources that may be pertinent to the citation.These resources are available for anyone in the community to access and the goal is to provide more opportunities for an individual to find this information (including through Programs 4.7 and 4.8). HCD has indicated that the Housing Element Update contains adequate programs for housing conditions within the City. B. Programs for Affordability The Letter states that the Housing Element Update does not provide goals regarding how affordable housing funding sources will be used and that it should have implemented educational programs about affordable housing funding sources to developers and the public. As a threshold matter, it is important to note that the City does not build or own any affordable units within the City, but where appropriate and possible, the City financially supports affordable housing activities via inclusionary in-lieu fees, federal and state grants, etc. The City lists various grant and loan funding sources available to non-profit affordable housing https://www.slocity.org/government/department-directory/community- development/affordable-housing/grants. Additionally, the Letter states that the Housing Element Update does not state how much of the affordable housing funding sources the City plans to use in the planning period. The City participates in Federal community development funding programs (i.e., in-lieu fees), via the non-entitlement Urban County programs (CDBG, ESG, HOME), which is overseen by the County of San Luis Obispo Housing Division, and thus, funding availability is determined on an annual basis via an HUD formula. That funding is then allocated to aspiring projects located within the City limits, and eligible projects are ultimately approved by the County Board of Supervisors. Therefore, it is impossible to quantify the future funding that will be utilized, as well as the amount of funding that will be used to fund affordable housing projects, as there are several other eligible activities these funding sources can be used to financially support. However, the City has historically recommended, and the Board has approved, these funds to assist with activities constructing, rehabilitating, preserving, and conserving affordable housing. The affordability of housing within the City is discussed largely within Appendix C. Page C- 9 in Appendix C of the Housing Element identifies Non-governmental constraints that lead to higher costs for housing. The City has no control over land costs, construction costs, insurance, investors, and the ultimately what the market will bear. New programs, listed below, are proposed to be added to the Housing Element as part of the City Council November 17, 2020 Agenda Report to incentivize the construction of more affordable units within the City. These programs are supported by HCD and encourage the development of projects with a minimum level of affordable housing and by doing so, relieve the developer of going through a discretionary process. 13 Program 2.17: In order to provide adequate sites for lower income households on non- vacant and vacant sites previously identified in the Housing Element (Table E-2), the City will, within one (1) year of the adoption of the Housing Element Update, allow developments (including mixed-use projects) that include at least 20 percent of the residential units as affordable to lower income households, by right (no discretionary review). Program 2.18: Utilize objective design standards to allow residential uses by right (no discretionary review) for those developments (including mixed-use projects) that include at least 20 percent of the residential units as affordable to low income households. In addition to these new programs, Goal 2 of the Housing Element is focused on Housing Affordability and contains a number of policies and programs focused on ways in which the City can support the development of units that are affordable to a wide range of households. For all of these reasons, the City believes that the Housing Element Update has sufficient affordability programs. IX. Programs for Special Needs Housing (California Government Code Section 65583(a)(7)) A. Programs for People with Disabilities The Letter states that the Housing Element Update fails to identify enough meaningful goals, policies, and programs to make sites affordable for those with disabilities. Although the City is not a social services provider, the Housing Element Update does provide goals, policies, and programs to support the wide range of housing needs within the community (see Goal 8 and subsequent policies and programs). For example, Program 8.13 -owned mobile-home parks, cooperative or limited equity housing, manufactured housing, self-help housing, or other types of housing that meets special needs. the City believes the Housing Element Update provides sufficient programs for people with disabilities and other special needs as required under applicable state law. Further, the Letter relies on the inaccurate conclusion that the Housing Element Update does not adequately analyze the needs of those with developmental disabilities to support its point that the City does not have sufficient programs for people with disabilities. However, as addressed in Section V(A) of this letter, the Housing Element Update does indeed analyze all legally required components of Section 65583(a)(7) and HCD guidance. B. Programs for Homeless Population The Letter states that the City failed to identify enough meaningful goals, policies and programs for the homeless and recommends considering tiny houses, RVs, motels, or hotels as alternative housing. 14 Although the City is not a social services provider, the Housing Element includes several programs to support housing homeless. (See Programs 8.11, 8.18, and 8.21.) Programs such as 8.11 and 8.21 provide for opportunities such as Safe Parking. In 2013, the City established a Safe Parking Program (see Zoning Regulations Section 17.86.230). This program allows for an organization or group to establish a place where homeless individuals/households can legally park a car or RV and sleep overnight. suggestions, the City believes the Housing Element Update provides sufficient programs for the homeless population and adequately analyzes their needs as required under applicable state law (See Section V(B)). Additionally, tiny homes are allowed within the City as an accessory use to a single unit residential dwelling (Zoning Regulations Ch. 17.86.210(E)). Nonetheless, the City remains open to continuing to work with CRLA to address the needs of the homeless population within the City by providing them with access to essential services and shelter. C. Programs for Farmworkers The Letter states that the Draft Housing Element fails to establish any meaningful goals, policies, and programs for the small farmworker population. Respectfully, the City disagrees. Government Code Section 65583(c)(1)(C) provides that if the inventory of sites suitable and available for residential development does not identify adequate sites to accommodate the need for farmworker housing, the program shall provide for sufficient sites to meet the need with zoning that permits farmworker housing by right, including density and development standards that could accommodate and facilitate the feasibility of the development of farmworker housing for low- and very low income households. In compliance with this state law requirement and consistent with the Employee Housing Act, Regulations, within two years of Housing Element adoption, to be consistent with the Employee Housing Act; including: 1) an update of Table 2-1 to allow single-unit dwellings without a Conditional Use Permit within the Open Space and Conservation (C/OS) zone and employee housing consisting of no more than 36 beds in a group quarters, or 12 units or separate rooms or spaces designed for use by a single-family or household within the C/OS and AG zones, and 2) remove Chapter 17.148 - High-Occupancy Residential Use Moreover, Program 8.23 provides for sufficient sites to meet farmworker housing needs as it allows single-unit dwellings and large employee housing by right in C/OS zones as required by Section 65583(c)(1)(C). X. Programs to Address Inadequacy of Sites 65583(c)(1)(A)) The Letter states that since the Revised Housing Element does not identify adequate sites to accommodate the need f adoption of minimum density and development standards. Respectfully, the City disagrees that the revised Housing Element Update Inventory does not identify adequate sites to accommodate the need for low and very low incomes. All sites identified for low and very low allow 20 density units per acre or more (depending on the zoning). The revised Housing Element Update acknowledges that many of the sites in the 15 inventory have been in previous Housing Elements and therefore staff is recommending the addition of Program 2.17, which states: In order to provide adequate sites for lower income households on non-vacant and vacant sites previously identified in the Housing Element (Table E-2), the City will, within one (1) year of the adoption of the Housing Element Update, allow developments (including mixed-use projects) that include at least 20 percent of the residential units as affordable to lower income households, by right (no discretionary review). HCD has indicated its support of this Program. For further discussion, see section VII above. XI. Actions to Promote Equal Housing Opportunities 65583(c)(5)) The Letter states that the City failed to implement actions that promote equal housing opportunities and that the Draft Housing Element did not implement any programs or plans of action to promote housing throughout the community or communities for all persons regardless of race, religion, sex, marital status, ancestry, national origin, color, familial status, or disability, source of income nor other characteristics. Respectfully, the City disagrees. Per HCD direction, the Housing Element was updated to include programs 4.7 and 4.8, which focus on supporting Affirmatively Further Fair Housing (AFFH) and Fair Housing and include actions such as: facilitating public education and outreach; training staff, elected officials, and appointees on issues of disparity, structural racism, and inequality; providing up to date information online and brochures at the front counter; and providing educational materials to tenants, property owners and property managers (see page 15 of the Housing Element Update). Appendix B, starting on Page 23 of the Housing Element Update was also revised to discuss how the City supports housing for all persons. The City maintains a Reasonable Accommodation Ordinance (Ordinance 650 § 3) to provide a process for disabled persons to request flexibility in the application of land use and zoning regulations to ensure equal access to housing. The City also does business in accordance with the Federal Fair Housing Law and provides resources for those that feel they have been discriminated against. Information is slocity.org/government/department-directory/community- development/affordable-housing/fair-housing-act) and is also distributed by Code Enforcement as a part of their interaction with tenants, property owners, and property managers. Further, the City Council has made a commitment to make San Luis Obispo a welcoming, inclusive, and safe community for everyone, and to promoting free thought and speech, while condemning racism, hate speech, bigotry, violence, and prejudice. Finally, the City has addressed affirmatively furthering fair housing in the Housing Element Update by focusing on the prevention of neighborhoods or housing types that are segregated by economic status. Policies 4.1, 4.2, 4.3 and 4.4 all focus on providing housing for all persons, making sure that housing is equable in size, location, and affordability throughout ms and activities, the City shall affirmatively further fair housing and promote equal housing opportunities for 16 persons of all economic segments of continue to 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 4.1, 4.2, 4.3 and 4.4. XII. Analysis of Constraints to Housing Development (Cal. Gov. Code Section 65583(a)) The Letter states that the Housing Element Update fails to address constraints to housing development by failing to sufficiently analyze both governmental and non-governmental constraints. The Letter identifies several analyses CRLA believes the City should have provided. However, the City has engaged in continuous communication with HCD, and HCD only raised one of the issues identified in this section of the Letter: Management Regulations and their effect on housing development. As such, the City will focus this response on its Growth Management Regulations. California Government Code Section 66300 prohibits a city from enacting a development policy, standard, or condition with respect to land where housing is an allowable use if it would have the effect of limiting the number of land use approvals or permits necessary for the approval and construction of housing, acts as a cap on the number of housing units that can be approved or constructed § 66300(b)(1)(D).) However, enforce a limit on the number of approvals or permits or a cap on the number of housing units that can be approved or constructed if the provision of law imposing the limit was approved by voters prior to January 1, 2005, and the affected county or affected city is located in a predominantly agricultural county.Id. § 66300(b)(1)(E).) complies with Government Code Section 663300 as the City is within a county considered 66300(b)(1)(E) and its Residential Growth Management Regulations were adopted before January 1, 2005 (adopted in October 1999 and amended in October 2004). The Residential Growth M) states Land Use Element Table 3 identifies the maximum number of units that the City has planned to accommodate. In addition, the Residential Growth Management Regulations require each specific plan area to adopt a phasing schedule for residential growth to ensure that established thresholds in the Land Use Element are not exceeded. It is important to note that the General Plan identifies residential capacity in five-year increments and any capacity that is not utilized in one increment, rolls over to the next. Additionally, units that are enforceably restricted (e.g., deed-restricted) as affordable to extremely low, very low, low, and moderate income households are not factored into the Growth Management Schedule because they are exempt from the Growth Management Ordinance along with residential units built in Downtown and Accessory Dwelling Units (ADUs). Quantified objectives anticipate the construction of 3,354 in-city dwellings during the planning period. Of these, 58 percent, or 1,948 dwellings, will be affordable to lower income households, consistent with the percentages of housing 17 number and would not be affected by the Residential Growth Management Regulations. XIII. Implementation Plan The Letter states that the Revised Draft Housing Element fails to establish concrete timelines for the implementation of its programs. Additional timelines were added to various programs per HCD direction. These timelines are written directly into the program themselves. For instance, Program 6.23 statesUpdate the development review process and expand the thresholds of each review level (minor, moderate, and major) to eliminate or reduce the number of public hearings required for housing projects within one year of adopting the Housing Element. Appendix I provides additional timelines on the implementation of the various programs, including those that are - It is important to note that California Government Code Section 65583(c) allows a program to be ongoing, such that there will be beneficial impacts of the programs within the planning periodAs such, many of the programs in the Housing Element Update are recognized as ongoing, such as Program 1.6 which states removal of illegal or unsafe dwellings, to eliminate hazardous site or property conditions, and resolve chronic building safety problems. Code Enforcement staff shall continue to provide property owners and tenants with information on how to rectify violations, who to contact in because it is a program that will be continuously implemented throughout the planning period and thus, like others in the Element, are compliant with state law. Conclusion City Staff appreciates questions, and suggestions, as they have helped the City improve its Housing Element Update by making amendments in consultation with HCD staff. City staff has considered and adopted some of recommended changes, and worked diligently, at the direction of HCD, to comply with state law. The City believes the Housing Element Update not only complies with state law, but also outlines a plan for housing development within the City that is affordable, inclusive, and responsive to the needs expressed by the community. Sincerely, Rachel Cohen Markie Jorgensen Associate Planner Assistant City Attorney Community Development City Attorney's Office 919 Palm Street, 990 Palm Street, San Luis Obispo, CA 93401-3218 San Luis Obispo, CA 93401-3249 rcohen@slocity.org mjorgens@slocity.org 805.781.7574 805.781.7141 18