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Home My WebLink About04/06/2021 Item 14 - CodronCity of San Luis Obispo, Council Memorandum Council Agenda Correspondence DATE: April 5, 2021 TO: City Council FROM: Michael Codron, Director of Community Development Prepared by: Kyle Bell, Associate Planner VIA: Derek Johnson, City Manager DJ SUBJECT: Item #14 - General Plan Annual Report – Growth Management Summary Background The Land Use Element policy related to residential growth (LUE 1.11.2) states that the City’s housing supply shall grow no faster than one percent per year, on average, based on established thresholds shown in Table 3 in the Land Use Element. Table 3. One Percent City Population Growth Projection Year Approximate Maximum Number of Dwellings* Anticipated Number of People 2013 20,697 45,541 2015 21,113 46,456 2020 22,190 48,826 2025 23,322 51,317 2030 24,512 53,934 2035 25,762 56,686 Estimated urban reserve capacity: 57,200 *2013 population based on CA Department of Finance data and projected based on 1 percent annual growth. In accordance with Zoning Regulations Section 17.144.020.D, affordable dwellings deed- restricted to residents with extremely low, very low, low, or moderate incomes, new dwellings in the Downtown Core (C-D zone), and legally established accessory dwelling units (ADU) are exempt from the regulations that implement this policy1. However, the limits described in Table 3 are important because they establish the target population for the City at “build-out,” which is 57,200 people. This build-out population number is used by the Utilities Department for water supply planning, Public Works for transportation planning, Police and Fire to plan for adequate emergency response, Parks and Recreation to ensure adequate facilities, the Finance Department 1 Zoning Regulations Section 17.144.020.D: Dwellings affordable and enforceably restricted to residents with extremely low, very low, low, or moderate incomes, as defined in the City’s General Plan Housing Element, new dwellings in the downtown core (C-D zone as shown on the official zoning map), and legally established accessory dwelling units shall be exempt from these regulations…. In expansion areas, the overall number of units built must conform to the City approved phasing plan. General Plan Annual Report – Growth Management Summary Page 2 for fiscal forecasting, and City Administration to ensure appropriate levels of general government services. In 2020, the City released occupancy for a net new 313 residential units, which included 39 ADUs, and 13 deed-restricted affordable units (0 new units within the Downtown Core). In accordance with M.C. 17.144.020.D (Growth Management Ordinance), only 261 of the residences that were issued in 2020 count toward the Growth Management Ordinance, resulting in the 1.21% growth rate for 2020. Figure 1 below identifies the number of units that have been added subject to the Growth Management Ordinance (shown in blue), in comparison to the 1% average growth rate, which is shown as increasing from 209 units in 2015 to 212 units by 2020 (shown in grey). From 2015 to 2020 the City released occupancy for 759 residential units that are subject to the Growth Management Ordinance. As stated in the 2020 General Plan Annual Report, the average annual growth rate over the last six years resulted in 0.60%. Residential Growth Tracking To ensure that the City has appropriate resources to accommodate its entire population, the total number of residential units inclusive of ADUs, affordable units, and units in the Downtown Core, is also tracked. In accordance with LUE Table 3, the City released occupancy for 1,085 residential units between 2015 to 2020, whereas the 1% growth rate would have allowed up to 1,259 new units by the end of 2020. 209 212 53 120 92 53 180 261 0 50 100 150 200 250 300 2015 2016 2017 2018 2019 2020 Figure 1: Residential Units Subject to Growth Management Ordinance 1% Growth Policy per Year Residential Units Added General Plan Annual Report – Growth Management Summary Page 3 Figure 2 – Projected Growth Figure 2 shows the relationship between the City Growth Management Ordinance and Table 3, projected out to 2035. This projection reflects rough estimates of when projects will be released for occupancy based on known phasing plans, and includes all known residential developments within the Specific Plans and all known residential infill projects. The total number of units that are subject to the Growth Management Ordinance (orange), will always be less than the total number of units subject to LUE Table 3 (blue), due to the exclusions discussed earlier. As shown in the graphic, the total number of units will exceed the LUE Table 3 estimate (yellow) at times between 2020 and 2035 since the City is seeing residential development concurrently in almost all of its specific plan areas. In accordance with LUE Policy 1.11.2, development within Specific Plans may develop in accordance with the approved phasing plans so long as the 2035 threshold is not exceeded. The area of the graphic that exceeds LUE Table 3 between 2022 and 2032 accounts for the build-out of each of the Specific Plans in accordance with the approved phasing plans which does not exceed the thresholds established for 2035. The green area in the graphic represents infill potential as identified in the 2020-28 Housing Element. This includes housing opportunity sites identified in Program 6.13 (e.g. 600 Tank Farm Road), Special Focus areas identified in the Land Use Element (e.g. Pacific Beach High School site, or the Los Osos Valley Road “Strawberry Fields” site), as well as new housing inventory that would result from the Flexible Density and Missing Middle housing programs. The work program for Community Development as identified in the Housing Element and looking forward to the 2021-23 Financial Plan is focused on completing programs identified in the Housing Element. The most important program moving forward is an update to the City’s Inclusionary Housing Requirement, which will help the City deliver more affordable housing as residential development continues. The most important take away from these policy efforts is that they will likely increase anticipated population growth in and by themselves and should be taken into context as the Council evaluates any other General Plan Amendments. Current Inventory Sufficient to Accomplish Build-Out General Plan Annual Report – Growth Management Summary Page 4 It is important to note that, at this time, the City has sufficient inventory of zoned land for the purpose of accomplishing build-out as anticipated by the Land Use Element of the General Plan. The City recently adopted a new 6th Cycle Housing Element with an updated Sites Inventory that has now been accepted as adequate by the State Department of Housing and Community Development to meet its Regional Housing Needs Allocation (RHNA). In addition, the City is pursuing important programs to ensure that new increments of housing provided within the City’s build-out projections accomplish its Housing Element programs. Figure 3 provides another illustration of residential growth under the 2035 General Plan. Land Use Element Table 3 anticipates adding up to a total of 4,649 new units between 2015-2035, based on the 1% annual average growth rate. Figure 3 shows the number of units already constructed (grey), the estimated number of additional units anticipated within the Specific Plan areas (blue), and the estimated amount of infill projects (red) (accounting for Housing Element opportunity sites such as 600 Tank Farm Road, Housing Element program implementation, and implementation of Special Focus areas identified in the LUE). For the near-term, housing development will continue to occur in specific plan areas with adopted phasing programs (Orcutt, Margarita, San Luis Ranch, Avila Ranch, Froom Ranch), Housing Element opportunity sites (see Housing Element Program 6.13), infill development including mixed-use projects on commercially zoned land, and infill opportunities created through the City’s implementation of flexible density and missing-middle housing programs. As a result, new housing opportunity sites and annexation areas should only be pursued as part of a more comprehensive planning effort such as will begin in 2026 when the City receives new RHNA numbers from the State and begins to plan for its next 7th Cycle Housing Element update. At that time, it is likely that the City will need to look past 2035 to plan for a new build-out population since the City’s next RHNA will not be able to be accommodated within the limits currently identified by Table 3 of the Land Use Element. Until the City begins this process, staff is not recommending initiation of new specific plan amendments, General Plan amendments, or annexations that would add to its current supply of land zoned for residential development. In the meantime, there are thousands of homes left to construct within the current policy limits of the General Plan. Units Built 23% Specific Plans 45% Infill Projects 22% Remaining Units 10% Figure 3: Anticipated Build-out by 2035 (4,649 units)