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HomeMy WebLinkAboutItem 4a. Downtown Flexible Density Program (CODE-0017-2023) PLANNING COMMISSION AGENDA REPORT SUBJECT: REVIEW OF A DRAFT ORDINANCE AMENDING TITLE 17 (ZONING REGULATIONS) OF THE MUNICIPAL CODE TO IMPLEMENT HOUSING ELEMENT PROGRAM 2.15 AND POLICY 6.6 TO PROVIDE A DOWNTOWN FLEXIBLE DENSITY PROGRAM. BY: Kye Bell, Housing Coordinator FROM: Tyler Corey, Deputy Director Phone Number: (805) 781-7524 Phone Number: (805) 781-7169 Email: kbell@slocity.org Email: tcorey@slocity.org PROJECT LOCATION: Downtown Core FILE NUMBER: CODE-0017-2023 RECOMMENDATION Adopt a draft Resolution recommending the City Council introduce and adopt an Ordinance amending Title 17 (Zoning Regulations) of the Municipal Code to incorporate the Downtown Flexible Density Program for qualifying residential projects. SUMMARY The concept of the flexible density program was specifically identified throughout the 2020 Housing Element Update as an opportunity to incentivize housing production within the City’s urban core and support the production of smaller residential units (Housing Element Program 2.151 & Policy 6.62). The main goals of the program are to help address the local housing demand by facilitating increased higher density residential infill development in the downtown area near employment centers, incentivizing smaller units, and diversifying the City’s housing stock. The City Council has tasked the Community Development Department with introducing the Downtown Flexible Density Program as part of the 2021-23 Major City Goal work program for Housing. Council provided direction to conduct outreach efforts with stakeholder groups and the community to incorporate housing policy initiatives that encourage smaller units. 1 Housing Element Program 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 Core and portions of Upper Monterey and Mid-Higuera Special Focus Areas to support the production of 50 smaller residential units (150 to 600 square feet) per year during the planning period. 2 Housing Element Policy 6.6: Consistent with the City’s goal to stimulate higher density infill where appropriate in the Downtown, 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. Meeting Date: 2/22/2023 Item Number: 4a Time Estimate: 90 Minutes Page 9 of 54 Item 4a CODE-0017-2023 Planning Commission Report – 02/22/2023 1.0 COMMISSION'S PURVIEW The Planning Commission’s role is to review the proposed Zoning Regulations amendment for consistency with the City’s Housing Element and State Law and make a recommendation to the City Council. 2.0 PROJECT INFORMATION 2.1 Background The concept of the Flexible Density Program began in 2018 as part of the Comprehensive Update to the City’s Zoning Regulations (Title 17 of the Municipal Code). The City’s Consultant working on the update (MIG Consultants) provided a White Paper regarding the concept of Flexible Density. This concept was memorialized in the 2020 Housing Element Update as an opportunity to incentivize housing production within the City’s urban core and support the production of smaller residential units (Program 2.15 & Policy 6.6). Housing is an essential element to a healthy downtown district. Providing for housing in the commercial core of a community generates a constant flow of f oot traffic to support nearby retailers, services, restaurants, and other businesses. The concentrated mix of retail, office, and entertainment typical of a downtown locates residents within walking distance of most daily activities. The Downtown Flexible Density Program Incorporates a higher density of residential uses that creates a more vibrant, desirable downtown economy. 2.2 Applicability The General Plan Land Use Element Figure 4 (Downtown Planning Area and Core) establishes the boundaries of the Downtown Core and Planning Area. The Downtown Core includes three zoning designations, Downtown Commercial (C-D), Retail Commercial (C-R), and Public Facilities (PF). It should be noted that not all C -D zoned properties are located within the Downtown Core (as shown in Figure 1 below). To qualify under the Downtown Flexible Density Program, a subject property will need to be located within the Downtown Core and within either the C-D or C-R zoning districts. Page 10 of 54 Item 4a CODE-0017-2023 Planning Commission Report – 02/22/2023 Figure 1: Map of the Downtown Core Boundaries Page 11 of 54 Item 4a CODE-0017-2023 Planning Commission Report – 02/22/2023 2.3 Program Overview The City’s existing development standards calculate residential capacity through fractional density allocations. While Density Units (du) are measured based on the area of a lot per acre (du/ac), the size of a dwelling unit is also a factor in the density allocation3. Studio and one-bedroom dwellings less than 600 square feet equal 0.50 du, while a 2- bedroom is equal to 1.0 du. Table 1 describes the residential capacity of an example property under existing density standards. Table 1 – Residential Capacity Under Existing Density Standards C-D or C-R zone Lot Area (sf*) Acres Density Allowance Available Density Maximum Number of Units Less than 600 sf Example Property 10,000 0.23 36 Density Units/ Acre 8.26** 16 *sf = square feet **Density allocations round only to the nearest hundredth. As part of the Downtown Flexible Density Program, density standards are proposed to be reduced from 0.5 Density Units to 0.0 Density Units for qualifying dwelling units that are less than 600 square feet in size (limited to studio or one-bedroom configurations), within the Downtown Core. The only limit to the number of qualifying units under the proposed program would be determined by existing development standards such as maximum building area which is referred to as the maximum Floor Area Ratio. Standards for building intensity for non-residential uses such as mixed-use, commercial, and industrial development are measured by floor area ratios. Floor area ratio (FAR) is the relationship between the total amount of usable floor area in a structure and the total area of the lot on which a structure is built4. The higher the ratio, the greater intensity of development. In the case of mixed-use developments5, density standards are only applied to the residential component of a project, while FAR standards are applied to the entire structure or development on the property. Table 2 provides a summary of the applicable development standards for properties within the Downtown Core. 3 Zoning Regulations Section 17.70.040.A.1 – Density Calculation – General. Density Units are calculated based on the net area of a property subject to thresholds established per zone … different size dwellings have density unit values as follows: (a) Studio and one -bedroom dwellings less than 600 square feet = 0.50 unit; (b) One-bedroom dwellings between 601 and 1,000 square feet = 0.66 unit; (c) Two - bedroom dwelling = 1.00 unit; (d) Three-bedroom dwelling = 1.50 units; (e) Dwelling with four or more bedrooms = 2.00 units. 4 Zoning Regulations 17.158.017. F Definitions. Floor Area Ratio (FAR) The net floor area of a building or buildings on a lot divided by the lot area. 5 Zoning Regulations Section 17.156.028- Mixed-Use Development. A development that combines both nonresidential and residential uses, where residential uses are typically located above or behind the commercial. Page 12 of 54 Item 4a CODE-0017-2023 Planning Commission Report – 02/22/2023 Table 2 – Existing Development Standards for the Downtown Core Development Standards C-D Downtown Commercial C-R Retail Commercial Maximum Density 36 units/acre Minimum Street Yard No street setback Minimum Other Yard As provided in zone of adjacent lot, or Edge Conditions Maximum Building Height 50-75 feet6 45 feet Maximum Floor Area Ratio 3.0 – 4.0 FAR; varies with building height7 3.0 FAR Maximum Lot Coverage 100% Minimum Lot Area (sf*) 3,000 9,000 Minimum Required Parking Half the requirement of Table 3-48 Table 3-4: Parking Requirements by Use *sf = square feet The proposed Program would modify the allocation of residential capacity from density units per acre to FAR allowances of an individual property as the threshold for the maximum number of qualifying units. Table 3 outlines and example residential capacity under the Program by using FAR for qualifying units with an average size of 550 square feet (excluding building area reserved for ground floor commercial). Table 3 - Residential Capacity Under the Downtown Flexible Density Program C-D or C- R zone Lot Area (sf*) 3.0 FAR (sf) Ground Floor Commercial (sf) Remaining Building Area (sf) Maximum Number of Units w/ Average size of 550 sf Example Property 10,000 30,000 10,000 20,000 36 units *sf = square feet 6 Zoning Regulations Section 17.32.020. Table 2-18 (C-D Zone Development Standards). Maximum Building Height. Maximum height may be increased up to 75 feet with the provision of defined community benefits, as set forth in Section 17.32.030.E (Maximum Building Height in C-D Zone). 7 Zoning Regulations Section 17.32.020. Table 2-18 (C-D Zone Development Standards). Floor Area Ratio. 3.0 – maximum allowed for buildings up to 50 feet in height. 3.75 – maximum allowed for buildings approved greater than 50 feet in height. 4.0 – maximum allowed for approved buildings over 50 feet in height with transfer of development credits for open space protection or historic preservation. See also Section 17.70.060 (FAR Measurement and Exceptions) 8 Zoning Regulations Section 17.72.030.D – Minimum Number of Spaces Required in the Downtown Core. the downtown-commercial (C-D) zone, the following parking standards and incentives shall apply: … (3) Residential uses, hotels and motels, and bed and breakfast inns: One -half that required in Table 3-4: Parking Requirements by Use. Page 13 of 54 Item 4a CODE-0017-2023 Planning Commission Report – 02/22/2023 As described by Housing Element Program 2.15 and Policy 6.6, the Program is intended to incentivize the construction of smaller housing units within the City's Downtown Core . Specifically, the program includes incentives to increase residential density, partially reduce parking requirements, and exempt applicability of the Inclusionary Housing Ordinance for qualifying units. The program also expands ground floor residential use prohibition and clarifies density bonus applicability. Importantly, the program does not modify the recently implemented streamlined development review process or any site development standards. Finally, the program includes a sunset provision. A summary of the key features of draft ordinance has been provided below for Planning Commission’s consideration. Summary of Draft Ordinance Key Features: 1. Density Incentive. Reduce residential density standards from 0.5 Density Units to 0.0 Density Units for qualifying dwelling units that are less than 600 square feet in size (limited to studio or one-bedroom configurations), within the Downtown Core. Housing units larger than 600 square feet in size shall be subject to standard density requirements. 2. Ground Floor Uses. Prohibit residential dwellings on the ground floor for properties in the C-R zone within the Downtown Core to be consistent with existing development requirements in the C-D zone. 3. Applicability to Downtown Core. Establish the Downtown Core as the initial boundary for properties eligible under the program. The Downtown Core includes properties zoned C-D and C-R. 4. Parking Requirement Incentive. Reduced parking requirements in the C-R zoned portion of the Downtown Core for qualifying dwelling units to match the current C- D zone parking requirements (1 space for every two units, plus 1 guest space for every 10 units). This parking reduction in the C-R zone would be limited only to qualifying units. All other units larger than 600 square feet, and all commercial space shall be subject to standard parking requirements in the C-R zone. No changes are proposed to parking requirements in the C -D zone. Residents within the Downtown Core are eligible to participate in the Downtown Residential Overnight Parking Program. 5. Inclusionary Housing Exemption Incentive. Exempt qualifying dwelling units from Inclusionary Housing Requirements as an incentive for property owners and developers to increase the number of residential units within the Downtown Core under the Program. Standard Inclusionary Housing Requirements shall apply to units larger than 600 square feet, and all new commercial space. 6. Density Bonus Projects. Projects which include a request for a density bonus in accordance with Government Code Section 65915 (Density Bonus Law) are not eligible for the Downtown Flexible Density Program. Density Bonus Law provides developers with powerful tools to encourage the development of affordable housing. The Downtown Flexible Density Program is designed as an alternative option to promote housing production in the commercial core of the community. Page 14 of 54 Item 4a CODE-0017-2023 Planning Commission Report – 02/22/2023 Developers may choose to pursue an application to address residential capacities through density bonus or flexible density, not both. 7. Program Duration. Program is set to expire on January 1, 2029, consistent with the current Housing Element Cycle, or until 500 qualifying units are entitled or permitted under this program, whichever occurs first. 8. Development Review Process. No changes to the development review process are proposed. 9. Site Development Standards (i.e. FAR, Lot Coverage, Setbacks, and Height) Other than density thresholds and parking requirements in the C-R zone, no changes to development standards are proposed as part of the Program. 3.0 PROJECT ANALYSIS 3.1 Consistency with the General Plan Housing Element: The General Plan Housing Element sets forth the City’s policies and programs for meeting existing and future housing needs, for preserving and enhancing neighborhoods, and for increasing affordable housing opportunities. It is the primary policy guide for local decision-making on all housing matters. The Housing Element (HE) identifies key policies related to housing production throughout the community to help meet the Regional Housing Needs Allocation (RHNA) plan production targets and support residential infill development by promotin g higher residential density where appropriate (Policy 6.8). The HE also encourages prioritizing residential infill development and densification within the City Limits over considerations of new annexations of land (Program 6.15). The concept of the flexible density program was memorialized in the 2020 Housing Element Update as an opportunity to incentivize housing production within the City’s urban core and support the production of smaller residential units (Program 2.15 & Policy 6.6). Land Use Element: The General Plan Land Use Element represents a blueprint for the future of the City of San Luis Obispo and sets forth a pattern for the orderly development of land within the City's planning area. The Element describes the expected level of population growth resulting from construction of housing units included in the plan, including new commercial and industrial development. The Land Use Element (LUE) of the City’s General Plan includes the Land Use Diagram, as well as policies that directly shape land use decisions and the resulting physical form of the City. The following summarizes key goals in the LUE related to downtown form: 1. Where appropriate, create compact, mixed-use neighborhoods that locate housing, jobs, recreation, and other daily needs close to one another, while protecting the quality of life in established neighborhoods. 2. Maintain a compact urban form. 3. Preserve the City’s heritage of historic buildings and places. Page 15 of 54 Item 4a CODE-0017-2023 Planning Commission Report – 02/22/2023 4. Provide a variety of business services and housing in downtown. 5. Provide a safe and pleasant place to walk and ride a bicycle, for recreation and other daily activities. Downtown is the community’s urban center serving as the cultural, social, entertainment, and political center of the City (LUE Policy 4.1). Downtown is not only a commercial district, but also a neighborhood. Its residential uses contribute to the character of the area, allow a 24-hour presence which enhances security and help the balance between jobs and housing in the community (LUE Policy 4.2). The LUE also encourages the development of downtown housing that minimizes the need for automobile use and minimizes the storage of vehicles in surrounding neighborhoods (LUE Policy 2.9). The LUE includes policies to modify the City’s Zoning Regulations to allow efficiency units and variable density within the Downtown Core (LUE Policy 4.28). LUE Program 2.15 directs the City to evaluate alternatives to the current maximum density thresholds, height, parking, and setback standards that currently restrict residential intensity. Program 2.16 provides direction to the City to consider using portions of City-owned parking lots and structures for residential parking. 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 (LUE Table 3). Affordable Dwellings restricted to residents with extremely low, very low, low, or moderate incomes, new dwellings in the Downtown Core, and legally established accessory dwelling units are exempt from these regulations (Section 17.144.020.D). 3.2 Consistency with the Downtown Concept Plan The Downtown Concept Plan is the community’s vision for how downtown San Luis Obispo should be developed over the next 25 years. The concept plan is not a regulatory document and is intended to provide guidance for development projects and public improvements downtown. The Plan promotes a compact urban core, additional housing opportunities, reduce auto travel by providing services, jobs, and housing in proximity to each other. Residential uses downtown are intended to provide a range of multi-unit housing types to help meet the vision of a more compact and walkable downtown living environment. The Plan includes eight Planning Principles intended to guide the development in downtown . Principle 3 (Variety in Form and Function) encourages a variety of compatible buildings, uses, activities, and housing types for an inclusive and vital downtown by encouraging flexible mixed-use development, a variety of housing options, and to reduce auto travel by providing jobs and housing in proximity to each other. Principle 7 (Compatible Design) encourages higher-density projects, smaller dwelling units, and other innovative residential solutions Page 16 of 54 Item 4a CODE-0017-2023 Planning Commission Report – 02/22/2023 3.3 Consistency with the Access and Parking Management Plan The draft Access and Parking Management Plan sets a path for modernizing parking management and maximizing use of available land. It makes it easier for drivers to find available parking, which reduces traffic congestion and creates safer streets. The City’s Parking Services Division operates roughly 2,600 public parking spaces downtown, spread across five off-street surface lots, three parking structures, and street parking controlled through a variety of time limits, per-hour pricing, permits, and curb use restrictions (loading zones). A widely recognized best practice in parking management involves the comparison of actual parking utilization rates with an 85 percent occupancy threshold. Overall parking occupancy for all on and off -street spaces in the downtown study area was almost always well below the 85 percent occupancy threshold during the study period, except for Farmer’s Market nights. Parking Services offers a variety of different parking permits to meet the needs of various user groups. The Downtown Residential Overnight Parking (DROP) permits cost $375 per quarter and are valid for parking on the third and fourth floors of the Marsh Street and Palm Street structures, day and overnight, which will be available to qualifying units under the Downtown Flexible Density Program. In the third quarter of 2022, only 16 parking passes were sold to downtown residences. The Access and Parking Management Plan also includes policies for decreasing the permit rates for qualifying low-income households. 3.4 Consistency with the Active Transportation Plan According to the City’s 2021 Active Transportation Plan, the City has a jobs-to-housing ratio of 2.5:1, where many San Luis Obispo workers commute into the City from outside areas, increasing the City’s weekday population. Most employed San Luis Obispo residents work within the City, with nearly 60% reporting a daily commute time of less than 15 minutes. The Active Transportation Plan encourages increasing infill housing within the City’s urban setting to reduce commute times and alleviate single occupant vehicle dependency. Promoting housing downtown will help reduce traffic gridlock and urban sprawl, while also increasing foot-traffic along local storefronts to increase the economic vitality of the downtown commercial core. 3.5 Consistency with the Climate Action Plan The City of San Luis Obispo’s 2020 Climate Action Plan (CAP) for Community Recovery set one of the nation’s most ambitious climate action goals: community-wide carbon neutrality by 2035 (CAP Work Program). The Flexible Density Program is specifically included in the CAP Pillar for Connected Communities as Foundational Action No. 5.1. Transportation is the single largest source of greenhouse gas emissions (GHG) in San Luis Obispo, due primarily to the use of single -occupancy fossil-fueled vehicles. By continuing to build a safe pedestrian and bicycle network, producing more housing in key locations, enhancing public transit, supporting electric vehicle infrastructure, and investing in mobility innovations, the City can reduce GHG emissions from vehicle trips while also reducing individual mobility costs. Construction of new housing near significant Page 17 of 54 Item 4a CODE-0017-2023 Planning Commission Report – 02/22/2023 transportation nodes and corridors reduces private vehicle trips and associated GHG emissions and is therefore a fundamental concept in sustainable housing development. 4.0 PUBLIC ENGAGEMENT According to the Public Engagement and Noticing (PEN) manual, the process for the ordinance adoption would typically fall under inform/consult because the program is specifically identified in the Housing Element as a Policy and Program, and included as a work program item in the 2021-23 Financial Plan Housing & Homelessness Major City Goal. However, the public engagement approach for this program followed the consult/collaborate approach due to the sensitivity of downtown and interest in housing needs for the community. A more detailed overview of the public engagement efforts are provided in Attachment B (Public Engagement Summary). The engagement efforts are summarized below;  Consultations were held with the Planning Division, Utilities Department, Transportation & Parking Divisions, for collaboration and coordination on the components of the Draft Ordinance.  The Draft Ordinance was reviewed by the City’s Fire Department, Utilities Department, Building Division, Engineering Division, Parking Division, and Transportation Division.  The Program was posted on Open City Hall to provide a community forum discussion regarding increasing housing opportunities downtown. The survey has received 304 responses (58% in favor, 42% opposed). All public comments and recommendations from the survey are summarized in Attachment B.  A news release was published on January 23, 2023. Interviews have been provided for: The Tribune, Cal Poly Mustang News, New Times, KSBY, and the Agenda Breakdown podcast.  Four stakeholder group interviews were conducted with 12 different interest groups. One additional stakeholder group is scheduled for February 17 th. All stakeholder recommendations are summarized in Attachment B.  A presentation was provided for the Downtown Association (February 14th), additional presentations are scheduled for the Chamber of Commerce (February 16th), the Regional Housing Team (February 16th), and the Developer’s Roundtable (March 1st) to introduce the concepts of the program and facilitate discussion. Public notice of this hearing has been published in a widely circulated local newspaper, and hearing agendas for this meeting have been posted at City Hall, consistent with adopted notification procedures. Email notices have been provided for each public meeting to those on the interested parties list. Page 18 of 54 Item 4a CODE-0017-2023 Planning Commission Report – 02/22/2023 5.0 ENVIRONMENTAL REVIEW Pursuant to CEQA Guideline 15164, an addendum to the Initial Study / Negative Declaration for the Zoning Regulations Update (GENP -0327-2017) was prepared for the proposed Downtown Flexible Density Program (Attachment A, Exhibit A). The addendum concluded the following: i. Pursuant to Section 15162 of the State CEQA Guidelines , a subsequent environmental impact report is not required because: a) The project changes do not result in new or more severe environmental impacts. b) The circumstances under which the project is undertaken will not require major changes to the adopted Negative Declaration , and c) The modified project does not require any new mitigation measures. ii. The proposed Downtown Flexible Density Program, including proposed amendments identified in this Addendum, would make revisions, additions, corrections and clarifications to various sections of the Zoning Regulations to ensure consistency and successful implementation of the Housing Element. The proposed Downtown Flexible Density Program and associated amendments to Municipal Code Title 17 are consistent with the scope of the previously approved Comprehensive Zoning Regulations Update. iii. The changes are consistent with State Law, the City of San Luis Obispo Climate Action Plan, and the City of San Luis Obispo General Plan. 6.0 OTHER DEPARTMENT COMMENTS Staff comments from Public Works, Utilities, Transportation, Parking, Fire, and Building and Safety, have been incorporated into the draft Downtown Flexible Density Program. It should be noted that all proposed residential projects must comply with all objective City policies, thresholds of significance, development standards, and design standards for all City departments as established in, but not limited to, the General Plan, City Standard Specifications and Engineering Standards, Building and Fire Code Requirements, Active Transportation Plan, Transportation Impact Study Guidelines, Climate Action Plan, Community Design Guidelines and the City’s Municipal Code. 7.0 ALTERNATIVES 7.1 Continue the project. An action continuing the project should include direction to the staff on pertinent issues. 8.0 ATTACHMENTS A - Draft Resolution with Exhibit A (Addendum) and Exhibit B (Draft Council Ordinance) B - Public Engagement Summary Page 19 of 54 Page 20 of 54 RESOLUTION NO. PC-XXXX-23 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF SAN LUIS OBISPO RECOMMENDING THE CITY COUNCIL INTRODUCE AND ADOPT AN ORDINANCE AMENDING TITLE 17 (ZONING REGULATIONS) OF THE MUNICIPAL CODE TO INCLUDE INCORPORATE A DOWNTOWN FLEXIBLE DENSITY PROGRAM FOR QUALIFYING RESIDENTIAL PROJECTS. PROJECT IS CONSISTENT WITH THE PREVIOUS MITIGATED NEGATIVE DECLARATION FOR THE 2018 COMPREHENSIVE ZONING REGULATIONS UPDATE AS REPRESENTED IN THE PLANNING COMMISSION AGENDA REPORT AND ATTACHMENTS DATED FEBRUARY 22, 2023 (DOWNTOWN CORE; CODE-0017-2023) WHEREAS, on February 5, 2019, the City of San Luis Obispo adopted a comprehensive update of the Zoning Ordinance (2018 Zoning Ordinance); and WHEREAS, on November 17, 2020, the City Council of the City of San Luis Obispo conducted a public hearing in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California on November 17, 2020, for the purpose of final adoption of the sixth cycle update to the General Plan Housing Element that included Program 2.15 and Policy 6.6 that directed staff to create a Downtown Flexible Density Program for consideration; and WHEREAS, the Planning Commission of the City of San Luis Obispo conducted a public hearing in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California on February 22, 2023, for the purpose of considering the various amendments to Title 17 (Zoning Regulations) of the Municipal Code to implement the Downtown Flexible Density Program; and WHEREAS, notice of said public hearing were made at the time and in the manner required by law; and WHEREAS, the Planning Commission has duly considered all evidence, including the testimony of the applicant, interested parties, and the 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 does hereby recommend the City Council introduce and adopt the proposed Downtown Flexible Density Program for qualifying residential projects based on the following findings: 1. The proposed amendments to Title 17 to implement the Downtown Flexible Density Program will not cause significant health, safety, or welfare concerns since the amendments are consistent with the General Plan and directly implement City goals and polices. Page 21 of 54 Planning Commission Resolution No. PC-XXXX-23 CODE-0017-2023 Page 2 2. The proposed amendments to Title 17 of the Municipal Code are consistent with the 6th Cycle Housing Element Program 2.15 which states “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 Core and portions of Upper Monterey and Mid-Higuera Special Focus Areas to support the production of 50 smaller residential units (150 to 600 square feet) per year during the planning period.” 3. The proposed amendment to Title 17 of the Municipal Code are also consistent with the 6th Cycle Housing Element Policy 6.6 which states “Consistent with the City’s goal to stimulate higher density infill where appropriate in the Downtown, 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.” SECTION 2. Environmental Review. Pursuant to CEQA Guideline 15164, an addendum to the Initial Study / Negative Declaration for the Zoning Regulations Update (GENP-0327-2017) was prepared for the proposed Downtown Flexible Density Program. The addendum concluded the following: i. Pursuant to Section 15162 of the State CEQA Guidelines , a subsequent environmental impact report is not required because: a) The project changes do not result in new or more severe environmental impacts. b) The circumstances under which the project is undertaken will not require major changes to the adopted Negative Declaration , and c) The modified project does not require any new mitigation measures. ii. The proposed Downtown Flexible Density Program, including proposed amendments identified in this Addendum, would make revisions, additions, corrections and clarifications to various sections of the Zoning Regulations to ensure consistency and successful implementation of the Housing Element. The proposed Downtown Flexible Density Program and associated amendments to Municipal Code Title 17 are consistent with the scope of the previously approved Comprehensive Zoning Regulations Update. iii. The changes are consistent with State Law, the City of San Luis Obispo Climate Action Plan, and the City of San Luis Obispo General Plan. Based on the foregoing, the City Council does hereby adopt the Addendum to the Initial Study Negative Declaration that was prepared for the Comprehensive Zoning Regulations Update for the Downtown Flexible Density Program, as provided in Exhibit A. Page 22 of 54 Planning Commission Resolution No. PC-XXXX-23 CODE-0017-2023 Page 3 SECTION 3 . Recommendation. The Planning Commission does hereby recommend the City Council introduce and adopt an ordinance amending Title 17 (Zoning Regulations) of the Municipal Code to include the Downtown Flexible Density Program for qualifying residential projects as set forth in Exhibit B. Upon motion of ______________________, seconded by __________________ and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was passed and adopted this 22nd day of February 2023. ___________________________ Tyler Corey, Secretary Planning Commission Page 23 of 54 EXHIBIT A Addendum to the Initial Study/Mitigated Negative Declaration for the 2018 Zoning Regulations Update, San Luis Obispo, California FEBRUARY 2023 PREPARED FOR City of San Luis Obispo PREPARED BY SWCA Environmental Consultants Page 24 of 54 ADDENDUM TO THE INITIAL STUDY/MITIGATED NEGATIVE DECLARATION FOR THE 2018 ZONING REGULATIONS UPDATE, SAN LUIS OBISPO, CALIFORNIA Prepared for City of San Luis Obispo 919 Palm Street San Luis Obispo, CA 93401 Attn: Kyle Bell, Housing Coordinator Prepared by SWCA Environmental Consultants 1422 Monterey Street, Suite C200 San Luis Obispo, CA 93401 (805) 543-7095 www.swca.com SWCA Project No. 71167.04 February 2023 Page 25 of 54 Addendum to IS/MND for the 2018 Zoning Regulations Update i CONTENTS Introduction ..................................................................................................................... 1 Purpose of Addendum ..................................................................................................... 1 Project Revisions ............................................................................................................ 3 Minor Technical Changes to the MND............................................................................. 4 Basis for Addendum ...................................................................................................... 13 Page 26 of 54 Addendum to IS/MND for the 2018 Zoning Regulations Update 1 INTRODUCTION On February 5, 2019, the City of San Luis Obispo (City) adopted a Mitigated Negative Declaration (MND; State Clearing House [SCH] #2013121019) for the Zoning Regulations Update (project) and approved revisions to the Zoning Regulations that were focused on implementation of the policies and programs in the City’s General Plan Land Use and Circulation Element (LUCE). Specifically, the revisions included specifying density for dwelling units less than 600 square feet in size as 0.50 density units, consistent with LUCE Policies 2.15 and 4.28. Since the Zoning Regulations update was consistent with the 2014 LUCE, the MND tiered with and incorporated, by reference, the City’s previously-certified Program Final Environmental Impact Report (September 2014; FEIR; SCH #2013121019) prepared for the LUCE pursuant to State CEQA Guidelines Sections 15150, 15152, and 15168. The City is now seeking minor revisions from what was analyzed in the MND to amend the Zoning Regulations and revise the density for dwelling units less than 600 square feet in size that are in the Downtown Core from 0.50 density units to 0.00 density units (see discussion below). The project would apply to the Downtown Core (as identified in the LUCE) on parcels zoned C-D (Downtown Commercial) and C-R (Retail Commercial), see Figure 1 below. PURPOSE OF ADDENDUM Pursuant to Section 21166 of CEQA and Section 15162 of the State CEQA Guidelines, when a lead agency has adopted an MND for a project, a subsequent MND does not need to be prepared for the project unless the lead agency determines that one or more of the following conditions are met: 1. Substantial project changes are proposed that will require major revisions of the previous MND due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects; 2. Substantial changes would occur with respect to the circumstances under which the project is undertaken that require major revisions to the previous MND due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects; or 3. New information of substantial importance that was not known and could not have been known with the exercise of reasonable diligence at the time the previous MND was adopted shows any of the following: a. The project will have one or more significant effects not discussed in the previous MND; b. Significant effects previously examined will be substantially more severe than identified in the previous MND; c. Mitigation measures or alternatives previously found not to be feasible would in fact be feasible, and would substantially reduce one or more significant effects of the project, but the project proponent declines to adopt the mitigation measures or alternatives; or d. Mitigation measures or alternatives that are considerably different from those analyzed in the previous MND would substantially reduce one or more significant effects on the environment, but the project proponent declines to adopt the mitigation measures or alternatives. Page 27 of 54 Addendum to IS/MND for the 2018 Zoning Regulations Update 2 Figure 1. Downtown Core and Downtown Planning Area Page 28 of 54 Addendum to IS/MND for the 2018 Zoning Regulations Update 3 Preparation of an Addendum to an MND is appropriate when none of the conditions specified in Section 15162 (above) are present and some minor technical changes to the previously adopted MND are necessary (see discussion below). PROJECT REVISIONS The MND analyzed revisions to the Zoning Regulations that included changing the City’s bedroom density approach and establishing a minimum density unit count in multi-unit zones. Studio and one-bedroom dwelling units less than 600 square feet in size (in all zones except AG, C/OS, and R-1), were assigned a density unit value of 0.50 (i.e., if a parcel has a maximum density allowance of 4, up to 8 units less than 600 square feet in size could be built). The City now proposes to revise the density unit value of dwellings less than 600 square feet in size in the Downtown Core from 0.50 density units to 0.00 density units to facilitate the implementation of LUCE Policy 4.28, which calls for variable density and efficiency units1 in the downtown. The City uses floor-area-ratio (FAR) to regulate the intensity of uses through a combination of height and lot coverage standards. The existing maximum FAR in the C-D zone is 3.0 for structures up to 50 feet tall, 3.75 for structures over 50 feet tall, and 4.0 for structures over 50 feet tall that either include a transfer of development credits for open space or historic preservation. The existing maximum FAR in the C-R zone is 3.0. The existing height limit in the C-D zone is 50 feet, or up to 75 feet with approval of a use permit from the Planning Commission contingent upon performance standards described in Section 17.32.030 of the Zoning Regulations. The maximum allowed lot coverage in the C-D zone is 100 percent. The existing height limit in the C-R zone is 45 feet. The proposed revision would alter the traditional allocation of residential capacity in the Downtown Core away from density units per acre and only rely on the FAR allowances of individual parcels as the threshold for the maximum number of units less than 600 square feet (limited to a studio or one-bedroom configuration). Standard density limitations would apply for all units larger than 600 square feet. By relying on the FAR rather than density units per acre, a parcel could have greater flexibility in the number of qualifying units within the footprint of the structure. Residential uses on the ground floor would still be prohibited in the C-D zone due to the existing flood zone restrictions. The proposed revisions would not alter FAR, height, or lot coverage standards. Based on the City’s Housing Element Development Capacity Calculation (Appendix E), and assuming an average 50% floor-area-ratio (FAR) dedicated toward residential uses, the maximum additional buildout capacity of the Downtown Core would be approximately 1,000 units, which would likely be single or double occupancy units. However, the draft ordinance proposes to limit the program to 500 units. 1 Efficiency units are defined by Health and Safety Code Section 17958.1 and are units that are a minimum of 150 square feet in size that may also have partial kitchen and bathroom facilities. Page 29 of 54 Addendum to IS/MND for the 2018 Zoning Regulations Update 4 MINOR TECHNICAL CHANGES TO THE MND Aesthetics. The MND determined potential impacts resulting from the implementation of the Zoning Regulations Update may include: blockage of views by construction equipment and staging areas; disruption of views by temporary signage; exposure of slopes and removal of vegetation; structural development within identified scenic areas; and view blockages by new structures, signs, and parking areas. The proposed density revisions would not alter the height, FAR, lot coverage, or design guideline standards and would not result in new development where such development is currently prohibited. No new or more significant aesthetic impacts beyond what was identified in the MND would occur and no new mitigation measures are required. Agriculture. The MND determined that buildout of the City pursuant to the Zoning Regulations Update would facilitate the development and redevelopment of residential uses in areas of the city near agricultural areas. The proposed density revisions would apply only to the Downtown Core and would not apply to land designated for agriculture or to land that is near agriculture areas. No new or more significant agriculture impacts beyond what was identified in the MND would occur and no new mitigation measures are required. Air Quality. The MND citing the 2014 LUCE FEIR identified inconsistencies with the assumptions used in the San Luis Obispo Air Pollution Control District’s (SLOAPCD’s) Climate Action Plan (CAP). This change was determined to be significant and unavoidable and a statement of overriding considerations was adopted by the City Council. The MND did not identify any new or more significant CAP consistency impacts beyond what was identified in the 2014 LUCE FEIR and no mitigation measures were required. The proposed density revisions would exceed the population growth projections of the SLOAPCD CAP as the density is higher than what was accounted for. However, this impact was considered in the MND and the proposed density revisions would not substantially increase this projection (500 new units). No new or more significant SLOAPCD CAP consistency impacts would occur beyond what was identified in the MND, and no new mitigation measures are required. The MND determined that future development projects proposed under the Zoning Regulations Update would require construction activity resulting in the generation of criteria air pollutants and ozone precursor emissions. The MND cited the 2014 LUCE FEIR which determined that adherence to relevant policies and implementation of SLOAPCD‐recommended project‐specific mitigation measures would reduce potential impacts associated with future development under the proposed Zoning Regulations Update to a less‐than‐significant level. The MND did not identify any new or more significant construction-related air pollutant emissions impacts beyond what was identified in the 2014 LUCE FEIR and no mitigation measures were required. The proposed density revisions would not increase the total potential development of a parcel, which would still be governed by FAR, height, and lot coverage standards. No new or more significant construction-related air quality impacts would occur beyond what was identified in the MND, and no new mitigation measures are required. The MND determined that future development projects proposed under the Zoning Regulations Update would involve the operation of development projects that would generate long-term emissions of criteria pollutants and ozone precursors. However, the MND also noted that consistent with the LUCE, the Zoning Regulations Update may result in beneficial environmental impacts on air quality by developing incentives in the Downtown area to reduce the use of cars, including provisions that would allow for corner stores in residential areas, further allowing upper- story residential uses in commercial areas, providing for an enhanced pedestrian experience in Page 30 of 54 Addendum to IS/MND for the 2018 Zoning Regulations Update 5 the Downtown, providing additional dwelling units within medium to high residentially-zoned areas, maintaining rural character and protecting natural resource areas, incorporating further sustainability standards into land use regulations, and adjusting parking requirement to achieve multi-modal objectives identified in the General Plan. The MND did not identify any new or more significant construction-related air pollutant emissions impacts beyond what was identified in the 2014 LUCE FEIR and no mitigation measures were required. The proposed density revisions would implement an incentive to reduce the use of cars by providing additional residential uses in the Downtown Core, in proximity to shopping, dining, transportation, and recreation, which may result in a beneficial environmental impact to air quality. No new or more significant operational air quality impacts beyond what was identified in the MND would occur and no new mitigation measures are required. The MND determined that the Zoning Regulations Update would not result in the exposure of sensitive receptors to substantial sources of local carbon monoxide concentrations, toxic air contaminants, or odors, based on the 2014 LUCE FEIR, because the Zoning Regulations Update would occur in areas of the City that were assessed in the 2014 LUCE FEIR. The proposed density revisions would not result in the placement of new sensitive receptors closer to existing sources of air pollution in comparison to existing conditions. No new or more significant impacts beyond what was identified in the MND would occur and no new mitigation measures are required. Biological Resources. The MND determined that future development pursuant to the Zoning Regulations Update would be required to comply with local, state, and federal laws and policies, and all applicable permitting requirements of the regulatory and oversight agencies intended to address potential impacts to special‐status wildlife species. The MND determined that implementation of local policies, as well as compliance with state and federal laws and policies and the requirements of regulatory and oversight agencies as appropriate, and reliance on establishment of project‐specific mitigation measures where appropriate would reduce potential impacts to a less than significant level. The proposed density revisions would apply to the Downtown Core, which is a largely built-up area with little remaining native habitat. San Luis Obispo Creek flows in a man-made channel and through a concrete tunnel beneath downtown San Luis Obispo emerging near Mission San Luis Obispo de Tolosa. Future development resulting from the proposed revisions would be subject to creek setback requirements and performance standards identified in the Zoning Regulations. Additionally, Conservation and Open Space Element (COSE) Policy 7.3 requires that projects within or adjacent to known occurrences of Natural Communities of Special Concern, or in areas that have potential to contain one or more of these habitats, to have a site-specific biology report prepared and undergo individual project environmental review to determine the location, extent, and proposed impact to those habitats. No new impacts to biological resources beyond what was identified in the MND would occur and no new mitigation measures are required. Cultural Resources. The MND, citing the 2014 LUCE FEIR, determined that development facilitated under the LUCE and Zoning Regulations Update could have an adverse impact on historical structures by damaging or destroying historical buildings or structures, diminishing the integrity of the context and setting of individual properties, or diminishing the integrity of the historical district. The loss of historic buildings or new developments within the existing historic districts that could impact historical resources was considered potentially significant. However, the policies and programs identified in the LUCE and COSE, the City’s Historic Preservation Ordinance, Historic Preservation Program Guidelines, Historic Context Statement, the City‐ designated Cultural Heritage Committee (CHC) policies and guidelines, and compliance with CEQA would directly address this impact. The MND did not identify any new or more significant Page 31 of 54 Addendum to IS/MND for the 2018 Zoning Regulations Update 6 impacts on historical resources beyond what was analyzed in the 2014 LUCE FEIR. The proposed density revisions would not make any changes to the LUCE and COSE, the City’s Historic Preservation Ordinance, Historic Preservation Program Guidelines, Historic Context Statement, or the City‐designated Cultural Heritage Committee (CHC) policies and guidelines and would not allow new development in areas not contemplated by the LUCE or Zoning Regulations Update. No new impacts to historical resources beyond what was identified in the MND would occur and no new mitigation measures are required. The MND determined that development facilitated under the Zoning Regulations Update would result in impacts to archeological and paleontological resources and human remains. This impact was determined to be less than significant with the adherence to the City’s Archaeological Resource Preservation Program Guidelines and compliance with federal and state regulations. The MND did not identify any new or more significant impacts on archaeological and paleontological resources or human remains beyond what was analyzed in the 2014 LUCE FEIR. The proposed density revisions would not make any changes to the LUCE and COSE, the City’s Historic Preservation Ordinance, Historic Preservation Program Guidelines, Historic Context Statement, or the City‐designated Cultural Heritage Committee (CHC) policies and guidelines and would not allow new development in areas not contemplated by the LUCE or Zoning Regulations Update. No new impacts to archaeological and paleontological resources or human remains beyond what was identified in the MND would occur and no new mitigation measures are required. Geology and Soils. The MND, citing the 2014 LUCE FEIR, determined that compliance with the California Building Code and the City’s General Plan would reduce geologic and seismic impacts to less than significant. The MND did not identify any new or more significant impacts on geological resources beyond what was analyzed in the 2014 LUCE FEIR. The proposed density revisions would not allow new development in areas not contemplated by the LUCE or Zoning Regulations Update. No new impacts to geological resources beyond what was identified in the MND would occur and no new mitigation measures are required. Greenhouse Gas Emissions. The MND determined that the Zoning Regulations Update will be one of the principal tools for implementing the LUCE and will advance greenhouse gas reduction goals as mandated by the State (AB32, SB375) and the City’s CAP. The Zoning Regulations Update facilitates the development of a sustainable, multi-modal community to reduce per capita vehicle miles traveled (VMT) and greenhouse gas (GHG) emissions through increased design standards, new design guidelines, and the imposition of general site regulations. New strategies in the updated Zoning Regulations include:  As an incentive for increased height in the C-D zone and a community benefit for a PD overlay, having a developer provide net-zero energy construction features  Reducing the allowable pervious surface coverage in front yards of R-1 zones from 50 percent to 40 percent  As an incentive for increased height in the C-D zone and a community benefit for a PD overlay, requiring a Transportation Demand Management (TDM) program that achieves measurable 20 percent mode shift and that is covenanted for long-term implementation  Allowing shared car services (e.g., ZipCar) spaces to be located in developments without increased parking requirements  Parking requirements for alternative clean fuel vehicles  Requirements for showers, lockers and changing rooms for large developments Page 32 of 54 Addendum to IS/MND for the 2018 Zoning Regulations Update 7 The MND did not identify any new or more significant impacts on GHG emissions beyond what was analyzed in the 2014 LUCE FEIR. The proposed density revisions would not allow new development in areas not contemplated by the LUCE or Zoning Regulations Update and would not change existing GHG policies of the City’s CAP or LUCE. No new GHG impacts beyond what was identified in the MND would occur and no new mitigation measures are required. Hazards and Hazardous Materials. The MND determined that allowing residential development in areas of commercial use or previous commercial use could expose occupants or construction workers to potentially hazardous materials including asbestos-containing materials and lead- based paint, but that compliance with LUCE and the Climate Adaptation and Safety Element (CASE) policies, City Demolition and Moving of Buildings Section 115 Public Safety Requirements, and state and federal regulations would reduce impacts to less than significant. The MND did not identify any new or more significant impacts related to hazards and hazardous materials beyond what was analyzed in the 2014 LUCE FEIR. The proposed density revisions would not allow new development in areas not contemplated by the LUCE or Zoning Regulations Update and would not introduce residential uses in proximity to hazards beyond what was contemplated in the MND. No new impacts related to hazards and hazardous materials beyond what was identified in the MND would occur and no new mitigation measures are required. Hydrology and Water Quality. The MND determined that potential development associated with the Zoning Regulations Update could result in the pollution of natural watercourses and/or underground aquifers. However, impacts were determined to be less than significant with the mandatory compliance of General Plan policies and the City’s Stormwater Quality Ordinance. The MND did not identify any new or more significant impacts related to hydrology and water quality beyond what was analyzed in the 2014 LUCE FEIR. The proposed density revisions would not allow new development in areas not contemplated by the LUCE or Zoning Regulations Update and would not increase the total development potential of a parcel, which currently allows 100% lot coverage. No new impacts related to pollution of natural watercourses and/or underground aquifers beyond what was identified in the MND would occur and no new mitigation measures are required. The MND determined that the Zoning Regulations Update has the potential to increase the amount of impervious surface within the City, which could result in a decrease in percolation to the groundwater basin, the alteration of drainage patterns, and increases in the volume of surface runoff. Adherence to the City’s General Plan and compliance with the City’s Storm Water Management Program and Drainage Design Manual was determined to be adequate to reduce impacts from additional impervious surfaces to less than significant. The proposed density revisions would not allow new development in areas not contemplated by the LUCE or Zoning Regulations Update and would not increase the total development potential of a parcel, which currently allows 100% lot coverage. No new impacts related to additional impervious surfaces beyond what was identified in the MND would occur and no new mitigation measures are required. The MND determined that future development resulting from the Zoning Regulations Update could result in new development within a 100-year floodplain and introduce structures in areas that could impede or redirect flood flows. Adherence to the City’s Floodplain Management Zone Regulations, the Waterway Management Program, the Drainage Design Manual, and the Stream Management and Maintenance Program was determined to be sufficient to ensure that impacts from flooding remain less than significant. The proposed density revisions would not allow new development in areas not contemplated by the LUCE or Zoning Regulations Update and would not increase the total development potential of a parcel, which currently allows 100% lot coverage. No new impacts related to flooding beyond what was identified in the MND would occur and no Page 33 of 54 Addendum to IS/MND for the 2018 Zoning Regulations Update 8 new mitigation measures are required. Land Use/Planning. The MND determined that the update to the Zoning Regulations would not result in the division of the community. The proposed density revisions would not allow new development in areas not contemplated by the LUCE or Zoning Regulations Update and would introduce new uses or infrastructure that could divide a community. No new impacts related to additional impervious surfaces beyond what was identified in the MND would occur and no new mitigation measures are required. The MND, citing the 2014 LUCE FEIR, determined that the Zoning Regulations Update would make the Zoning Regulations consistent with the LUCE by including standards and requirements that: facilitate protection of the environment, including hillsides, creeks, surface and groundwater, soils, and air quality; include development and redevelopment standards that support a well- balanced community; and maintain and where appropriate adapt the City form to preserve open space, create compact, mixed-use neighborhoods that locate housing, jobs, recreation, and other daily needs in close proximity to one another, protect the quality of life in established neighborhoods through compliance with proposed edge conditions regulations, and encouraging multi-modal transportation. Impacts related to environmental policy consistency were determined to be less than significant. The proposed density revisions would not allow new development in areas not contemplated by the LUCE or Zoning Regulations Update. Future land uses that occur pursuant to the proposed density revisions would be required to conform to all applicable regulations and standards of the updated Zoning Regulations and the LUCE. No new impacts related to additional environmental policy consistency beyond what was identified in the MND would occur and no new mitigation measures are required. Mineral Resources. The MND determined that there are no mineral resource recovery sites within the city and that implementation of the Zoning Regulations Update would have no impact on mineral resources. The proposed density revisions would not be located in areas of the city no contemplated by the Zoning Regulations Update. No new impacts related to mineral resources would occur, there would be no impact, and no new mitigation measures are required. Noise. The MND, citing the 2014 LUCE FEIR, determined that development constructed pursuant to the Zoning Regulations Update would result in construction activities that could generate noise levels that exceed the standards of the City’s Noise Control Ordinance. This impact was determined to be significant and unavoidable and a statement of overring considerations was adopted by the City Council. The MND did not identify any new or more significant construction noise impacts beyond what was identified in the 2014 LUCE FEIR and no mitigation measures were required. The proposed density revisions would not allow construction in areas not contemplated by the LUCE or Zoning Regulations Update and would not increase the construction potential of a property which would still be governed by FAR, height, and lot coverage standards. No new impacts related to noise beyond what was identified in the MND would occur and no new mitigation measures are required. The MND determined that consistent with the analysis and conclusions in the 2014 LUCE FEIR, implementation of the Zoning Regulations Update would result in increased traffic volumes and associated noise levels along major transportation routes. New development associated with the Zoning Regulations Update could also result in the siting of new sensitive receptors in close proximity to transportation noise sources such as major roadways and the railroad, with the potential to exceed the land use compatibility and transportation noise exposure standards in the existing Noise Element. Future development is required to comply with the City Noise Element and Noise Control Ordinance which require site-specific mitigation for development; therefore, Page 34 of 54 Addendum to IS/MND for the 2018 Zoning Regulations Update 9 impacts were determined to be less than significant. The proposed density revisions would not allow construction in areas not contemplated by the LUCE or Zoning Regulations Update and would not increase the construction potential of a property which would still be governed by FAR, height, and lot coverage standards. No new impacts related to transportation noise beyond what was identified in the MND would occur and no new mitigation measures are required. The MND, citing the 2014 LUCE FEIR, determined that the Zoning Regulations Update could facilitate development that would increase stationary source noise levels exceeding the thresholds of the City’s Noise Element and Noise Control Ordinance. Noise Element policies and standards would require all future development to comply with the City’s adopted noise standards, noise mitigation procedures, and sensitive land use siting policies, including site‐specific noise studies and mitigation measures, if necessary, to ensure that the development meets noise thresholds. Because the City’s Noise Element contains policies and programs that address and mitigate potential site‐specific impacts for individual projects, this impact was determined to be less than significant. The proposed density revisions would not allow construction in areas not contemplated by the LUCE or Zoning Regulations Update, would not increase the construction potential of a property that would still be governed by FAR, height, and lot coverage standards, and would not alter the policies and standards governing noise. No new impacts related to stationary source noise beyond what was identified in the MND would occur and no new mitigation measures are required. Population/Housing. As documented in the 2014 LUCE FEIR, as of January 2013, the City has a population of 45,541, and is expected to have a population increase of 4,613 people by 2035. LUCE Policy 1.11.2 Residential Growth Rate, states that the City shall manage the growth of the city's housing supply so that it does not exceed one percent per year, on average, based on thresholds established by Land Use Element Table 3 [One Percent City Population Growth Projection]. Because of the annual growth rate limitation, impacts were determined to be less than significant. The MND did not identify any new or more significant impacts on the population beyond what was identified in the 2014 LUCE FEIR and no mitigation measures were required. Based on the 2021 General Plan Annual Report, the City has maintained a 0.81 percent growth rate since 2015. Housing in the Downtown Core (C-D Zone) is exempt from the City’s Residential Growth Ordinance, so the potential increase in residential units would not be in conflict with the General Plan. The proposed density revisions would positively impact the jobs-to-housing ratio within the City, which is consistent with LUCE Policy 1.5 which states that the City’s housing stock should keep pace with the growth in employment so that the jobs-housing balance would not worsen. The proposed density revisions would not result in new or more significant impacts beyond what was identified in the MND and no new mitigation measures are required. The MND determined that the Zoning Regulations Update would not result in a loss of housing or displace existing residents. Housing Element Program 3.10 states that “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 17.86 (Downtown Housing Conversion Regulations) of the Zoning Regulations”. The Zoning Regulations Update retained the statement that “development projects within the Downtown Planning Area shall not result in a net housing loss.” The MND did not identify any new or more significant impacts beyond what was identified in the 2014 LUCE FEIR and no mitigation measures were required. The proposed density revisions would not alter the no net loss requirements of the Zoning Regulations or Housing Element. No new or more significant impacts beyond what was identified in the MND would occur and no new mitigation measures are required. Page 35 of 54 Addendum to IS/MND for the 2018 Zoning Regulations Update 10 Public Services. Fire. The MND cited the 2014 LUCE FEIR, which determined that new residential development facilitated by the LUE would place additional service demands on the San Luis Obispo Fire Department (SLOFD) and that the increased service demands would have the potential to result in a significant environmental impact if new or physically altered fire service facilities would be required to ensure that the City’s four-minute response standard was achieved. Mitigation was identified in the 2014 LUCE FEIR that the Safety Element be updated to include policy so that new development can only be approved when adequate fire services and facilities are available or would be made available by the new development. The MND did not identify any new or more significant impacts to fire services beyond what was identified in the 2014 LUCE FEIR and no mitigation measures were required. The Safety Element was recently updated in 2023 as the Climate Adaptation and Safety Element (CASE) which includes Policy FI-5.3 (City-Wide Fire- Smart New Development) that ensures that adequate fire services and facilities are available for all new developments. The proposed density revision would have the potential to increase the residential population in the Downtown Core. However, CASE Policy FI-5.3, which replaced the Safety Element policy referenced in the MND, would not be altered, and future development could only be approved if adequate fire services and facilities exist. No new or more significant fire service impacts beyond what was identified in the MND would occur and no new mitigation measures are required. Police. The MND cited the 2014 LUCE FEIR, which determined that new residential development facilitated by the LUE would place additional service demands on the San Luis Obispo Police Department (SLOPD) and that the increased service demands would have the potential to result in a significant environmental impact if new or physically altered police service facilities would be required to ensure that the City’s officer to population standard was achieved. However, this impact was determined to be less than significant because new or altered police facilities to meet the officer-to-population standard would be required to meet community design guidelines, and its location would need to meet the response time needs of the community. The MND did not identify any new or more significant impacts on police services beyond what was identified in the 2014 LUCE FEIR and no mitigation measures were required. The proposed density revision would have the potential to increase the residential population in the Downtown Core. With additional officers, there could be additional need for evidence and equipment storage, locker space, area to park police vehicles, and support staff (and their associated space needs) necessary to support additional officers. However, consistent with the MND, the proposed density revisions are unlikely to result in adverse physical impacts associated with the provision of new or altered facilities needed to maintain the existing ratio of officers to the population served because any new or reconstructed facility would be required to meet community design guidelines, and its location would need to meet the response time needs of the community. No new or more significant impacts beyond what was identified in the MND would occur and no new mitigation measures are required. Schools. The MND determined that residential development associated with the Zoning Regulations Update would increase the population of the City which would likely increase the number of children attending the City’s public schools. With the payment of Government Code Section 65970 school impact fees, impacts were determined to be less than significant. The MND did not identify any new or more significant impacts to school facilities beyond what was identified in the 2014 LUCE FEIR and no mitigation measures were required. The proposed density revision would have the potential to increase the residential population in the Downtown Core, but all new development would be required to pay any applicable school impact fees. No new or more significant schools impacts beyond what was identified in the MND would occur and no new mitigation measures are required. Page 36 of 54 Addendum to IS/MND for the 2018 Zoning Regulations Update 11 Parks. Citing the 2014 LUCE FEIR, upon buildout of development allowed by the LUCE and Zoning Regulations, the City’s parkland per capita would increase from 3.32 acres per 1,000 residents to 3.44 acres per 1,000 residents with the addition of approximately 52 acres of parkland. The MND determined that impacts to parks would be less than significant as projects are evaluated on a case-by-case basis to determine the level of project-specific open space or park area required. The MND did not identify any new or more significant impacts to park facilities beyond what was identified in the 2014 LUCE FEIR and no mitigation measures were required. The proposed density revision would have the potential to increase the residential population in the Downtown Core by 500 units, which would require approximately 5-10 additional acres of parkland to meet the City’s goal of 10 acres per 1,000 residents. However, consistent with the MND, all projects implemented as a result of the proposed density revisions would be evaluated on a case-by-case basis to determine the level of project-specific open space or park area required. No new or more significant park impacts beyond what was identified in the MND would occur and no new mitigation measures are required. Recreation. The MND determined that existing General Plan policies applicable to the development of future recreational facilities would reduce potential environmental impacts to less than significant. Most of the future parkland to be provided in the city would be constructed as part of the buildout of previously approved (Margarita, Orcutt, San Luis Ranch, Avila Ranch, Froom Ranch) Specific Plans. There are several park and recreation facilities within the Downtown Planning Area (Figure 1), including Cheng Park, Mitchell Park, Triangle Park, Mission Plaza, Mission Plaza Extension, San Luis Creek Open Space, Jack House Gardens, Emerson Park, and Ludwick Community Center. Planned parks in the Downtown Planning Area include Monterey Street Plaza, Toro/Marsh Pocket Park, Courthouse Park, Higuera Street Plaza, Rosa Butron Adobe, and Diagonal Paseo. The proposed density revisions would be required to comply with existing General Plan policies for construction of new recreational facilities; however, due to the built-out condition of the Downtown Core, it is unlikely that new or additional recreation facilities would be constructed as a result of development facilitated by the proposed density revisions. No new or more significant recreation impacts beyond what was identified in the MND would occur and no new mitigation measures are required. Transportation/Traffic. The MND, citing the 2014 LUCE FEIR, determined that development facilitated by the Zoning Regulations Update would result in significant and unavoidable impacts on congestion on the City’s roadways (level of service), specifically to the following eight roadway segments would experience significant impacts due to increases in volumes: Broad (entire corridor south of South Street, South – Orcutt, Orcutt – Tank Farm Road and Buckley – South City Limit); Chorro (Foothill – Lincoln; Los Osos Valley Road (just west of the City Limits); and Prado (US 101 – Higuera and Higuera – Broad). The MND did not identify any new or more significant impacts to roadway congestion and no mitigation measures were required. After the adoption of the MND, the CEQA checklist was revised to replace level of service (congestion) with vehicle miles traveled (VMT) as the preferred metric for evaluating a project’s transportation impacts, in compliance with SB 743. In June 2020, the City formally adopted the transition from LOS to VMT for the purposes of CEQA evaluation and also established local VMT thresholds of significance. While VMT was not specifically analyzed in the 2014 LUCE FEIR, its current inclusion in the CEQA checklist does not warrant an analysis of the entire project unless the project changes would result in new or more severe significant environmental impacts or unless there is new information of substantial importance that was not known at the time of the 2014 LUCE FEIR. Page 37 of 54 Addendum to IS/MND for the 2018 Zoning Regulations Update 12 The proposed density revisions are not anticipated to result in VMT impacts as the potential dwelling units associated with the density revisions would be located downtown, in close proximity to the City’s transit station, the train station/Amtrack, shopping, dining, recreation, and offices. Per the City’s Transportation Impact Study Guidelines VMT Screening Map, while lacking specific data for the Downtown Core, is adjacent to and surrounded by areas with residential VMT per capita that is less than 85% of the regional average. Therefore, the proposed density revisions would not create new or more significant impacts beyond what was identified in the MND and no new mitigation measures are required. Tribal Cultural Resources. The MND determined that development facilitated under the Zoning Regulations Update would result in impacts to tribal cultural resources. This impact was determined to be less than significant with the adherence to the City’s Archaeological Resource Preservation Program Guidelines and compliance with federal and state regulations. The MND did not identify any new or more significant impacts to tribal cultural resources beyond what was analyzed in the 2014 LUCE FEIR. The proposed density revisions would not make any changes to the LUCE and COSE or the Archaeological Resource Preservation Program Guidelines and would not allow new development in areas not contemplated by the LUCE or Zoning Regulations Update. No new impacts to tribal cultural resources beyond what was identified in the MND would occur and no new mitigation measures are required. Utilities/Service Systems. Wastewater. The 2014 LUCE FEIR determined that buildout of development allowed under the LUCE would exceed the capacity of the City’s Water Resource Recovery Facility by 0.26 million gallons per day. However, this impact was determined to be less than significant because at the time the City was proposing to upgrade the Water Resource Recovery Facility to increase in average dry weather flow (ADWF) capacity to serve the buildout of the LUCE, and because policies in the LUCE and the Water and Wastewater Element require projects to demonstrate that adequate treatment capacity at the Water Resource Recovery Facility exists. The MND determined that the Zoning Regulations Update would result in similar impacts as those disclosed in the 2014 LUCE FEIR and no new or more significant impacts to wastewater were identified. The City’s Water Resource Recovery Facility has since been completed and is operational with a capacity of 5.2 million-gallons-per-day. The proposed density revisions would allow an additional 500 units in the Downtown Core and would generate between 45 and 105 gallons of wastewater per day per unit, based on the City’s wastewater generation rates (0.5-1.2 acre-feet-per-year total). The Downtown Core is not within a sewer capacity-constrained area and future development would be required to demonstrate that adequate treatment capacity at the Water Resource Recovery Facility exists prior to construction. No new impacts to wastewater beyond what was identified in the MND would occur and no new mitigation measures are required. Water. The MND, citing the 2014 LUCE FEIR, determined that buildout of development facilitated by the Zoning Regulations Update would require a water supply of 7,815 acre-feet-per-year. The City’s current water supply totals approximately 10,630 acre-feet-per-year, which exceeds the demand that would be generated by the LUCE buildout/Zoning Regulations buildout. Impacts were determined to be less than significant and no new or more significant impacts to waster were identified. Based on the assumptions in the LUCE2, and assuming any residential units constructed under the proposed density revisions would be single or double occupancy, the proposed density revisions would result in approximately 127 to 254 additional acre-feet-per-year of water demand. This would bring the LUCE projected water demand to 7,942 to 8,069 acre- 2 Assumes water reduction requirements of SBX7‐7 would reduce per capita water use to 117 gallons per day by 2020. Page 38 of 54 Addendum to IS/MND for the 2018 Zoning Regulations Update 13 feet-per-year, which is within the City’s water supply of approximately 10,630 acre-feet-per-year. No new impacts to water beyond what was identified in the MND would occur and no new mitigation measures are required. Stormwater. The MND determined that future development could cause an increase in the amount of impervious surfaces within the City which could increase the volume of surface runoff into City stormwater systems. Impacts were determined to be less than significant because future development would be required to comply with Central Coast Regional Water Quality Control Board Post Construction Requirements and the City’s Storm Water Management Program. The MND did not identify any new or more significant impacts related to stormwater beyond what was identified in the 2014 LUCE FEIR and no mitigation measures were required. The proposed density revisions would not allow new development in areas not contemplated by the LUCE or Zoning Regulations Update and would not increase the total development potential of a parcel, which currently allows 100% lot coverage (and 100% impervious surface). No new impacts related to stormwater beyond what was identified in the MND would occur and no new mitigation measures are required. Solid Waste. The MND determined that the Zoning Regulations Update would not interfere with the City’s ability to comply with solid waste management and diversion regulations. Additionally, LUCE Policy 1.13.10 requires the City to determine if adequate solid waste disposal capacity exists prior to approving future development. The MND did not identify any new or more significant impacts related to solid waste disposal beyond what was identified in the 2014 LUCE FEIR and no mitigation measures were required. The proposed density revisions would not increase the total development potential of a parcel and new development would only be allowed if adequate solid waste disposal capacity exists, per LUCE policy. No new impacts related to solid waste beyond what was identified in the MND would occur and no new mitigation measures are required. BASIS FOR ADDENDUM In accordance with Section 15164 of the State CEQA Guidelines, the City of San Luis Obispo has determined that this Addendum to the adopted MND is necessary to document changes or additions that have occurred in the project description since the MND was originally adopted. The changes proposed are relatively minor in nature and, as documented above, would not result in any new significant environmental effects or a substantial increase in the severity of previously identified significant effects. Additionally, no new information of substantial importance that was not known and could not have been known with the exercise of reasonable diligence at the time the previous MND was adopted has been identified. The City has reviewed and considered the information contained in this Addendum and finds that the preparation of subsequent CEQA analysis that would require public circulation is not necessary. This Addendum does not require circulation because it does not provide significant new information that changes the adopted MND in a way that deprives the public of a meaningful opportunity to comment upon a substantial adverse environmental effect of the project or a feasible way to mitigate or avoid such an effect. The City shall consider this Addendum with the adopted MND as part of the approval of the proposed ordinance. Page 39 of 54 EXHIBIT B: DRAFT CITY COUNCIL ORDINANCE O _____ ORDINANCE NO. _____ (2023 SERIES) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, AMENDING TITLE 17 (ZONING REGULATIONS) OF THE MUNICIPAL CODE TO INCORPORATE A DOWNTOWN FLEXIBLE DENSITY PROGRAM FOR QUALIFYING RESIDENTIAL PROJECTS. PROJECT IS CONSISTENT WITH THE PREVIOUS MITIGATED NEGATIVE DECLARATION FOR THE 2018 COMPREHENSIVE ZONING REGULATIONS UPDATE (DOWNTOWN FLEXIBLE DENSITY PROGRAM, CODE-0017-2023) WHEREAS, on February 5, 2019, the City of San Luis Obispo adopted a comprehensive update of the Zoning Ordinance (2018 Zoning Ordinance); and WHEREAS, on November 17, 2020, the City Council of the City of San Luis Obispo conducted a public hearing in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California on November 17, 2020, for the purpose of final adoption of the sixth cycle update to the General Plan Housing Element that included Program 2.15 that states, “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 Core and portions of Upper Monterey and Mid- Higuera Special Focus Areas to support the production of 50 smaller residential units (150 to 600 square feet) per year during the planning period”; and WHEREAS, the 6th Cycle Housing Element includes Policy 6.6 that states, “Consistent with the City’s goal to stimulate higher density infill where appropriate in the Downtown, 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”; and WHEREAS, the Planning Commission of the City of San Luis Obispo conducted a public hearing in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California on February 22, 2023, for the purpose of considering the various amendments to Title 17 (Zoning Regulations) of the Municipal Code to implement the Downtown Flexible Density Program; and WHEREAS, the City Council of the City of San Luis Obispo conducted a public hearing in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California on _____________, 2023, for the purpose of considering the various amendments amendment to Title 17 (Zoning Regulations) of the Municipal Code to implement the Downtown Flexible Density Program; WHEREAS, the City Council finds that the proposed amendment is consistent with the General Plan, Zoning Regulations, and other applicable City goals and policies as amended; and WHEREAS, notices of said public hearing were made at the time and in the manner required by law. Page 40 of 54 Ordinance No. _____ (2023 Series) EXHIBIT B O _____ WHEREAS, the City Council has duly considered all evidence, including the testimony of the applicant, interested parties, and the evaluation and recommendations by staff, presented at said hearing. NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis Obispo as follows: SECTION 1. Incorporation of Recitals. The City Council find that the foregoing recitals and administrative report presented with this ordinance are true and correct and are incorporated in the ordinance by this reference and adopted as the findings of the City Council. SECTION 2. Findings. Based upon all the evidence, the City Council makes the following finding: 1. The proposed amendments to Title 17 to implement the Downtown Flexible Density Program will not cause significant health, safety, or welfare concerns since the amendments are consistent with the General Plan and directly implement City goals and polices. 2. The proposed amendments to Title 17 of the Municipal Code are consistent with the 6th Cycle Housing Element Program 2.15 which states “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 Core and portions of Upper Monterey and Mid -Higuera Special Focus Areas to support the production of 50 smaller residential units (150 to 600 square feet) per year during the planning period .” 3. The proposed amendment to Title 17 of the Municipal Code are also consistent with the 6th Cycle Housing Element Policy 6.6 which states “Consistent with the City’s goal to stimulate higher density infill where appropriate in the Downtown, 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.” SECTION 3. Environmental Determination. Pursuant to CEQA Guideline 15164, an addendum to the Initial Study / Negative Declaration for the Zoning Regulations Update (GENP-0327-2017) was prepared for the proposed Downtown Flexible Density Program. The addendum concluded the following: i. Pursuant to Section 15162 of the State CEQA Guidelines , a subsequent environmental impact report is not required because: a) The project changes do not result in new or more severe environmental impacts. b) The circumstances under which the project is undertaken will not require major changes to the adopted Negative Declaration , and c) The modified project does not require any new mitigation measures. Page 41 of 54 Ordinance No. _____ (2023 Series) EXHIBIT B O _____ ii. The proposed Downtown Flexible Density Program, including proposed amendments identified in this Addendum, would make revisions, additions, corrections and clarifications to various sections of the Zoning Regulations to ensure consistency and successful implementation of the Housing Element. The proposed Downtown Flexible Density Program and associated amendments to Municipal Code Title 17 are consistent with the scope of the previously-approved Comprehensive Zoning Regulations Update. iii. The changes are consistent with State Law, the City of San Luis Obispo Climate Action Plan, and the City of San Luis Obispo General Plan. Based on the foregoing, the City Council does hereby adopt the Addendum to the Initial Study Negative Declaration that was prepared for the Comprehensive Zoning Regulations Update for the Downtown Flexible Density Program, as provided in Exhibit A. SECTION 4. Section 17.70.040.A.3, entitled “Maximum Residential Development Potential” is hereby amended to add a new subsection “a” entitled “Downtown Flexible Density Program”, and reads as follows: 3. Maximum Residential Development Potential. Maximum residential development potential shall be the net lot area (in whole and fractional acres), multiplied by the maximum density allowed (in density units per acre) according to Subsections A.1 through A.2, above. The resulting number (in density units, carried out to the nearest one hundredth unit) will be the maximum residential development potential. Any combination of dwelling types and numbers may be developed, so long as their combined density unit values do not exceed the maximum potential. a. Downtown Flexible Density Program. Properties zoned C-D or C-R within the Downtown Core may be developed at a residential density that is greater than the base density for the zone in which the lot is located, subject to the provisions outlined in Chapter 17.141 (Downtown Flexible Density Program). SECTION 5. Section 17.70.130.D.1.a, entitled “Ground Floor Limitations” is hereby amended to read as follows: a. Ground Floor Limitations. In the Downtown Core (as shown in Section 17.141.020, Figure 8-1) and the C-D zone, residential units shall not occupy any ground floor space. In all other zones, residential units shall not occupy more than 50 percent of the ground floor space within the first 50 feet of floor area measured from each building face adjacent to a street toward the rear of the building, with no more than 30 percent of the building frontage to be occupied by residential uses. SECTION 6. Section 17.138.020.A, is hereby amended to add a new subsection “8”, and reads as follows: A. This Chapter shall apply to all residential development projects, except the following types of residential development projects are exempt: Page 42 of 54 Ordinance No. _____ (2023 Series) EXHIBIT B O _____ 1. Residential additions, repairs, or remodels, provided that such work does not increase the number of existing dwellings; 2. The addition or inclusion of Accessory Dwelling Units (ADUs) or Junior Accessory Dwelling Units (JADUs) associated with an existing or proposed residential or mixed-use development; 3. Affordable housing projects in which 100 percent of the dwellings to be built will be sold or rented in conformance with the City’s Affordable Housing Standards (excluding any on-site manager unit); 4. Housing projects that include a density bonus. 5. Emergency projects or projects which the Council determines are necessary to protect public health and safety; 6. Development projects which the Director determines are essentially noncommercial or nonresidential in nature, which provide educational, social, or related services to the community and which are proposed by public agencies, nonprofit agencies, foundations, and other similar organizations; 7. Projects which replace or restore a structure damaged or destroyed by fire, flood, earthquake, or other disaster within three years prior to the application for the new structure(s) (see Chapter 17.92 Nonconforming Structure); 8. Residential units that qualify under the Downtown Flexible Density Program (see Chapter 17.141). SECTION 7. Chapter 17.141, entitled “Downtown Flexible Density Program” is hereby added to Municipal Code Title 17 Article 8, to read as follows: Chapter 17.141 – Downtown Flexible Density Program 17.141.010 – Purpose and Intent The provisions in this Chapter are intended to carry out a key program directed by the 2014 General Plan Land Use Element, and the 2020 Housing Element to implement the Downtown Flexible Density Program. The Program is intended to facilitate the construction of smaller housing units within the City’s Downtown Core by relaxing density limitations for qualifying units and providing development standard incentives. The Program will be in effect until January 1, 2029, or until 500 residential units have been entitled or permitted, whichever occurs first. 17.141.020 - Applicability The Downtown Flexible Density Program eliminates residential density requirements for units less than 600 square feet in size. Projects that qualify under this Chapter may be developed at a residential density that is greater than the base density for the zone in which the lot is located. Page 43 of 54 Ordinance No. _____ (2023 Series) EXHIBIT B O _____ A. Location. The Downtown Flexible Density Program shall only be available to properties zoned C-D or C-R within the Downtown Core as shown in the Figure 8- 1 (Downtown Core). B. Residential Units. The Downtown Flexible Density Program is limited to studio or one-bedroom units that are less than 600 square feet, all other residential units 600 square feet or larger shall conform to the standard density limitations of the underlying zone. 1. The provisions of this Chapter shall not apply to projects that include a request for a density bonus in accordance with Section 17.140.040 (Standard Incentives for Housing Projects). Standard density limitations shall apply to any project that includes a request for a density bonus, in accordance with Section 17.70.040.A.1 (Density Calculation – General). Page 44 of 54 Ordinance No. _____ (2023 Series) EXHIBIT B O _____ Figure 8-1: Downtown Core Page 45 of 54 Ordinance No. _____ (2023 Series) EXHIBIT B O _____ 17.141.030 - Development Standards Incentives Applications submitted for review in accordance with this Chapter shall conform to all applicable development standards of the underlying zone, including but not limited to height, setbacks, floor area ratios, and building lot coverage, unless otherwise stated in this Chapter or prohibited by state law. A. Residential Density. Residential units that are less than 600 square feet in size and limited to a studio or one-bedroom configuration may exceed the base density for the zone in which the lot is located, in accordance with all provisions of this Chapter. For the purposes of this Program, qualifying units shall have a density unit value of 0.0, rather than the standard 0.5 density unit. 1. Standard density limitations shall apply to all residential units that are larger than 600 square feet or include two or more bedrooms, in acc ordance with Section 17.70.040.A.1 (Density Calculation – General). B. Inclusionary Housing Exemption. Residential units less than 600 square feet that are of a studio or one-bedroom configuration shall be exempt from inclusionary housing requirements, as described in Section 17.138.040 (Inclusionary Housing Requirements), subject to the following: 1. Commercial Linkage fees shall apply (Municipal Code Chapter 4.60). 2. Residential units 600 square feet or larger shall be subject to the standard Inclusionary Housing Requirements (Chapter 17.138: Inclusionary Housing Requirements). C. Parking Requirements. Vehicle parking requirements shall be required in accordance with Chapter 17.72 (Parking and Loading), except as otherwise provided below; 1. Minimum Parking Requirements. Qualifying units under the Downtown Flexible Density Program shall require minimum parking rate of one-half that required in Table 3-4: Parking Requirements by Use. 17.141.040 - Review Procedures All new construction projects including additions or alterations to existing buildings that include new units that qualify under this Chapter shall be subject to the City’s discretionary development review process, unless otherwise exempt, as outlined in Chapter 17.106 (Development Review). 17.141.050 - Program Duration The Flexible Density Program shall have an initial duration consistent with the current Housing Element Cycle and expire on January 1, 2029, or until 500 new residential units are entitled or permitted under this program, whichever occurs first. A. Exclusion of Affordable Housing Units. Housing units that are deed restricted as affordable to moderate-income or below households, as defined in the City’s Below Market Rate Housing Standards, will not count towards the 500 -unit Program limit. Page 46 of 54 Ordinance No. _____ (2023 Series) EXHIBIT B O _____ B. Pending Applications. Any application for new development that is deemed complete prior to the expiration of the Program term as established in this Section, may continue to be processed in accordance with this Chapter. SECTION 8. Chapter 17.142, entitled “Downtown Housing Conversion Regulations” Figure 8-1 (Downtown Planning Area and Downtown Core) is hereby relabeled as 8-2, respectfully, including all text references throughout Title 17. SECTION 9. Section 17.144.020, entitled “Standard Incentives for Housing Projects” subsection “D” is hereby amended to read as follows: 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 Ddowntown Ccore (C-D zone as shown on the official zoning map), and legally established accessory dwelling units shall be exempt from these regulations. Enforceably restricted shall mean dwellings that are subject to deed restrictions, development agreements, or other legal mechanisms acceptable to the City to ensure long-term affordability, consistent with City affordable housing standards. In expansion areas, the overall number of units built must conform to the City approved phasing plan. SECTION 10. Severability. If any subdivision, paragraph, sentence, clause, or phrase of this Ordinance is, for any reason, held to be invalid or unenforceable by a court of competent jurisdiction, such invalidity or unenforceability shall not affect the validity or enforcement of the remaining portions of this Ordinance, or any other provisions of the city's rules and regulations. It is the city's express intent that each remaining portion would have been adopted irrespective of the fact that any one or more subdivisions, paragraphs, sentences, clauses, or phrases be declared invalid or unenforceable . Page 47 of 54 Ordinance No. _____ (2023 Series) EXHIBIT B O _____ SECTION 11. Implementation. A summary of this ordinance, together with the names of Council members voting for and against, shall be published at least five (5) days prior to its final passage in The New Times, a newspaper published and circulated in this City. This ordinance shall go into effect at the expiration of thirty (30) days after its final passage. INTRODUCED on the ___ day of ___, 202 3, AND FINALLY ADOPTED by the Council of the City of San Luis Obispo on the ___ day of ___, 202 3, on the following vote: AYES: NOES: ABSENT: __________________________ Mayor Erica A. Stewart ATTEST: _______________________ Teresa Purrington City Clerk APPROVED AS TO FORM: ________________________ J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on ______________________. ___________________________ Teresa Purrington City Clerk Page 48 of 54 Memorandum DATE: February 15, 2023 TO: Planning Commission FROM: Tyler Corey, Deputy Director Community Development VIA: Kyle Bell, Housing Coordinator SUBJECT: Downtown Flexible Density Program – Public Engagement Summary SUMMARY According to the Public Engagement and Noticing (PEN) manual, the process for the ordinance adoption would typically fall under inform/consult because the program is specifically identified in the Housing Element as a Policy, and the Council’s Major City Goal was to bring the program to review within this fiscal plan. However, the public engagement approach for this program followed the consult/collaborate approach due to the sensitivity of downtown and interest in housing needs for the community. The Public Engagement effort consisted of several stakeholder interviews and presentations, as well as an Open City Hall Public Forum, as discussed in more detail below. Stakeholder Interviews On Friday, January 20, 2023, Staff contacted 15 interest groups from various organizations around the city to attend a roundtable discussion. The roundtable discussions were provided to facilitate a conversation around the key features of the Downtown Flexible Density Program and included a presentation on the background of the origins of the Program. Each group assigned a representative to attend one of the scheduled Roundtable Discussions (except for Cuesta). The meetings were not assigned, and the attendance of each meeting was based on the organization’s availability.  Chamber of Commerce  Downtown Association  Homebuilder’s Association  YIMBY  GALA Pride and Diversity Center  Diversity Coalition SLO County  Race Matters SLO  Transitions Mental Health Association  HASLO  People’s Self-Help Housing  Save our Downtown  Building a Better SLO  Healthy Communities Working Group  Cal Poly  Cuesta Page 49 of 54 Memo: Public Engagement Summary Memo Page 2 Roundtable 1 – January 26, 2023 Attendees: YIMBY and Downtown Association General Consensus: Attendees conveyed support of program, based on goals of providing a more diverse, welcoming, cultural, and inclusive downtown community. Recommendations:  Add additional parking districts, increase parking permit costs, and expand the DROP Program to mitigate parking issues.  Calculate the average capacity of parking structures and overnight parking.  Amend ordinance to 1 parking space for every 3 housing units.  Expand the boundary of the program beyond the Downtown Core to include properties further down Monterey Street.  Amend ordinance to allow developments to qualify through average unit size.  Place a limit on the amount a developer can charge for parking. Roundtable 2 – January 30, 2023 Attendees: Transitions Mental Health, HASLO, People’s Self -Help Housing, Cal Poly General Consensus: Attendees conveyed support of program, based on the appeal to current demographics of the community, and opportunity to convert unused office space to housing. However, the group took exception to the exemption of the Inclusionary Housing Requirement. Recommendations:  Expand the DROP Program and provide discounts for low-income residents.  Reduce impact fees for projects that include affordable housing.  Provide priority to downtown employees that do not own a car.  Provide bike share program.  Monitor pricing of units to verify level of affordability.  Include requirements to comply with Inclusionary Housing Requirements  Gather information from major city employers to verify whether this housing typology is in demand for the City’s workforce. Roundtable 3 – January 31, 2023 Attendees: GALA Pride and Diversity Center, Save our Downtown, Building a Better SLO, and Healthy Communities Working Group. General Consensus: Majority of attendees conveyed support of program, with one group expressing opposition. Attendees who expressed support of the program noted benefits related to active transportation, commute reductions, and increased economic vitality of the downtown. Attendees who express opposition of the program noted concerns towards the small size of the units as unfit for families, and pandemic concerns for over-crowding. All attendees expressed support of incentivizes housing Page 50 of 54 Memo: Public Engagement Summary Memo Page 3 supportive infrastructure such as grocery stores. Recommendations:  Remove the sunset clause or allow for more than 500 units before the deadline.  Require open air stairs, positive air pressure systems, and freight elevators to plan for higher density living during future pandemics.  Require communal/rooftop green space. Roundtable 4 – February 7, 2023 Attendees: Home Builders Association General Consensus: Attendees conveyed support of program, as a positive method to increase housing production in the community. Recommendations:  Expand the boundary of the program beyond the Downtown Core to include the entire Downtown Planning Area. Roundtable 5 – February 17, 2023 Attendees: Race Matter’s SLO and Diversity Coalition of SLO County [This meeting had been rescheduled to facilitate representatives from these organizations who were unable to attend the previous roundtable discussions due to scheduling conflicts.] Staff Presentations Downtown Association - Board of Directors – February 14, 2023 Comments: Attendees asked for clarification on how many residential units exist downtown (214) and how many more units are planned in the pipeline (~300 residential units). The group expressed support for incentivizing relevant infrastructure such as grocery stores. Recommendations:  Provide information on where the existing residents within downtown currently park their vehicles Chamber of Commerce – February 16, 2023 [The Chamber of Commerce was invited to attend the roundtable discussions but opted to have staff provide a presentation to their members to inform them of the program] Regional Housing Team – February 16, 2023 [Staff will provide a presentation on the key features of the Program at the next regularly scheduled meeting ] Page 51 of 54 Memo: Public Engagement Summary Memo Page 4 Developer’s Roundtable – March 1, 2023 [The Developer’s Roundtable was invited to participate in the Open City Hall Community Forum, staff has scheduled a presentation on the key features of the program at the next regularly scheduled meeting ] Open City Hall Public Survey A Community Forum was provided through Open City Hall for members of the public to provide input on the various components of the draft Program. The forum was designed to facilitate an open discussion regarding the needs of housing within the Downtown area. Participates were asked to provide their feedback on the key components of the program to meet the needs of the community. Open City Hall Community Forum: https://www.opentownhall.com/portals/189/Issue_12545 General Response 58% in favor of the program, 42% opposed to the program. Reasons for Support Participants of the Survey identified various reasons for support of the program, the top five reasons include;  Increasing the supply of housing within downtown.  Promotes community goals for economic vitality for downtown businesses  Provides more options for single household living within downtown  Promotes community goals for active transportation such as bicycle and transit infrastructure and reduces vehicle dependency.  Prevents urban sprawl and preserves the city’s green belt by focusing development within the urban core rather than expanding out. 114 32 31 24 10 8 Reasons to Support Increases Housing Supply Support Economic Vitality Smaller Unit Living Support Alternative Transportation Prevents Sprawl Support Climate Action Page 52 of 54 Memo: Public Engagement Summary Memo Page 5 Reasons for Opposition Participates of the Survey identified various reasons in opposition of implementing the Program as presented, the top five reasons conveyed in opposition include;  Not enough parking downtown.  The units will not be affordable to those who need it.  Adding more housing downtown will create over -crowding which will increase crime and noise in the community.  Adding more housing will increase traffic throughout the community.  The size of the units within the Program are too small. Public Recommendations A list of public recommendations has been provided below for consideration by the Planning Commission. 1. The Program should require compliance with Inclusionary Housing Requirements or increase affordable housing requirements – design for existing residents/workforce. 2. Preserve the “small town” feel – limit the Program to 3-stories in height and require design review. 3. Incentivize support for housing amenities such as grocery stores, laundry, and provide open space requirements for residents. 4. Prioritize addressing homelessness and improving existing infrastructure before adding more housing. 5. Enhance existing bicycle and transit infrastructure, ensure readily available bicycle parking is provided for residents 6. Increase the size of the units within the Program and allow for more unit type configurations such as two-bedroom units. 7. Do not provide for any parking reductions associated with the program. 94 41 34 29 13 9 3 Reasons to Not Support Insufficient Parking Unaffordable Overcrowding Increases Traffic Too Small of Units Water Infrastructure Impacts Viewshed Page 53 of 54 Memo: Public Engagement Summary Memo Page 6 8. Reduce parking requirements further or eliminate minimum parking requirements altogether. 9. Remove the 500-unit limit within the program and consider expanding the program boundaries beyond the Downtown Core. 10. Reduce fees associated with development of housing projects, provide opportunities for permit streamlining. 61 27 24 23 21 15 15 11 10 10 Public Recommendations More Affordable Housing "Small Town Feel" Incentivize Amenities Prioritize Homelessness and Other Infrastructure Enhanced Bicycle and Transit Infrastructure Increase Size of Units No Parking Reduction Reduce Parking Expand the Program Remove Cost Barriers Page 54 of 54 Downtown Flexible Density Program Title 17 Amendments February 22, 2023 Review of a draft Ordinance amending Title 17 (Zoning Regulations) of the Municipal Code to implement Housing Element Program 2.15 and Policy 6.6 to provide a Downtown Flexible Density Program. Recommendation 2 Adopt a draft Resolution to: ​​Recommendthe City Council introduce and adopt an Ordinance amending Title 17 (Zoning Regulations)of the Municipal Code to incorporate the Downtown Flexible Density Program for qualifying residential projects. Downtown Flexible Density Program Background 3 2014 Land Use Element directed the City to consider alternatives to standard density thresholds in Downtown. Discussed in the 2017 Downtown Concept Plan. Identified in the 2018 Comprehensive Zoning Regulations Update:Flexible Density White Paper. Identified in the 2020 Climate Action Plan as a program initiative (Connected 5.1). Memorialized in the 2020 Housing Element Update: Program 2.15 and Policy 6.6. Identified as one of SLO’s Major City Goals for 2021- 2023:Housing and Homelessness. Housing Program Initiatives 4 ▪The Flexible Density Program is only one tool to achieve housing objectives. ▪Additional tools the City utilizes are: ▪Fractional density units -Production ▪Minimum density allowances –Production ▪Tiered impact fee structure that incentivizes smaller units –Production ▪Ministerial review of ADUs and JADUs –Streamlining/Production ▪SB 9 –H.O.M.E.Act –Streamlining/Production ▪Streamlined Development Review process –Streamlining ▪Objective Design Standards –Streamlining ▪Density Bonus Regulations –Affordable Housing ▪Inclusionary Housing Requirements –Affordable Housing Housing Element 5 Program 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 Core and portions of Upper Monterey and Mid-Higuera Special Focus Areas to support the production of 50 smaller residential units (150 to 600 square feet) per year during the planning period. Key Program Features 6 1.Reduces density thresholds for qualifying units: limited to less than 600 sf in size (studio or one-bedroom configuration). 2.​​Prohibited on the ground floor. 3.Limited to the C-D or C-R zone within Downtown Core. 4.Reduced minimum parking requirements for qualifying units in the C-R zone (no changes in the C-D zone). DROP Program available. 5.Qualifying units exempt from Inclusionary Housing Requirements as an incentive. 6.Program is not available in conjunction with Density Bonus projects. 7.Expires on January 1, 2029, or until 500 new residential units are entitled or permitted, whichever occurs first. 8.No changes to the Development Review process. 9.No changes to development standards such as Building Height, Floor Area Ratio, Setbacks, lot coverage, etc. Flexible Density Program –Residential Capacity 7 Existing Fractional Density Thresholds; Studio/1-bed units (<600 sf) = 0.5 Density Units 1-bed units (<1,000 sf) = 0.66 2-bed units = 1.0 3-bed units = 1.5 4-bed+ units = 2.0 Flexible Density Program Threshold Changes; Studio/1-bed units (<600 sf) = 0.0 Density Units Ex. Existing Density Standards –Fractional Density C-D or C- R zone Lot Area (sf*)Acres Density Allowance Available Density Maximum # of Units < 600 sf Example Property 10,000 0.23 36 Density Units/ Acre 8.26 16 units Ex. Downtown Flexible Density Program C-D or C- R zone Lot Area (sf*) 3.0 FAR (sf) Ground Floor Retail (sf) Remaining Building Area (sf) Maximum # of Units w/ Average size of 550 sf Example Property 10,000 30,000 10,000 20,000 36 units Flexible Density Program –Parking 8 In 1981, parking requirements were reduced in the C-D zone to ½ that required elsewhere in the City. The parking in-lieu fee district was established in 1987. No changes are proposed to parking requirements in the C-D zone or to the parking in-lieu fee district. The parking incentive under the program is limited to qualifying units in the C-R zone. There are over 2,600 public parking spaces in Downtown. Downtown residents are eligible to participate in the Downtown Residential Overnight Parking (DROP) Program. Public Engagement –PEN Manual 9 Public engagement followed the consult/collaborate approach due to the sensitivity of downtown and interest in housing needs for the community. Public Engagement consisted of; ▪Consultations with various City Departments and Divisions. ▪Open City Hall Community Forum. ▪City News Release. ▪Stakeholder group interviews. ▪Presentations were provided to the Downtown Association Board of Directors, Chamber of Commerce, and the Regional Housing Action Team. Environmental Review 10 Pursuant to CEQA Guideline 15164,an addendum to the Initial Study /Negative Declaration for the Zoning Regulations Update (GENP-0327-2017)was prepared for the proposed Downtown Flexible Density Program. A subsequent environmental impact report is not required because: a)The project changes do not result in new or more severe environmental impacts. b)The circumstances under which the project is undertaken will not require major changes to the adopted Negative Declaration,and c)The modified project does not require any new mitigation measures. The proposed Downtown Flexible Density Program and associated amendments to Municipal Code Title 17 are consistent with the scope of the previously approved Comprehensive Zoning Regulations Update. The changes are consistent with State Law,the City of San Luis Obispo Climate Action Plan,and the City of San Luis Obispo General Plan. Recommendation 11 Adopt a draft Resolution to: ​​Recommendthe City Council introduce and adopt an Ordinance amending Title 17 (Zoning Regulations)of the Municipal Code to incorporate the Downtown Flexible Density Program for qualifying residential projects. Examples of units that are less than 600 sf. 12 451 square feet. 600 square feet. 288 square feet Housing Element 13 Policy 6.6: Consistent with the City’s goal to stimulate higher density infill where appropriate in the Downtown, 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. Downtown Core and Planning Area 14 Overview of Development Review Process 15 ▪Exempt projects –Ministerial,no public review process ▪Qualifying projects under Objective Standards (Chapter 17.69) ▪Less than 5 dwellings with average size less than 1,200 square feet. ▪Minor Development Review –No hearing,final action by CDD Director ▪10 units or less. ▪Moderate Development Review –ARC or CHC hearing,final action by CDD Director ▪Between 11 and 49 units. ▪Major Development Review –ARC/CHC hearing,final action by Planning Commission ▪50 units or more. ▪All significant additions,and new construction in the C-D zone. Overview of Existing Development Standards 16 Existing Development Standards for the Downtown Core Development Standards C-D Downtown Commercial C-R Retail Commercial Maximum Density 36 units/acre Minimum Street Yard No street setback Minimum Other Yard As provided in zone of adjacent lot, or Edge Conditions Maximum Building Height 50-75 feet 45 feet Maximum Floor Area Ratio 3.0 –4.0 FAR; varies with building height 3.0 FAR Maximum Lot Coverage 100% Minimum Lot Area (sf*)3,000 9,000 Minimum Required Parking Half the requirement of Table 3-4 Table 3-4: Parking Requirements by Use Overview of Existing C-D Standards 17 ▪Limitation on New Driveways ▪Residential Required ▪No Net Housing Loss ▪Minimum Height of 2-stories ▪Maximum Building Height above 50 feet ▪Subject to Community Benefits (affordable housing required) ▪Visual Study required for buildings taller than 30 feet. ▪Upper story step-back requirements Public Engagement –Stakeholder Comments 18 Parking ▪Add additional parking districts around downtown to prevent spillover into neighborhoods. ▪Reduce parking requirements further or eliminate requirement for qualifying units. ▪Provide bike share program. Program Boundary and Duration ▪Expand the boundary of the Program beyond the Downtown Core. ▪Remove the sunset clause or allow for more than 500 units before the deadline,or change program based on occupancy rather than entitlement. Unit Size ▪Amend program to allow developments to qualify through average unit size. Affordable Housing ▪Require Inclusionary Housing Requirements. ▪Reduce impact fees for projects that include affordable housing. Design Features ▪Require open air stairs,positive air pressure systems, communal/rooftop green space,and freight elevators to plan for higher density living during future pandemics. Review Process ▪Streamline review process for modifications to existing entitled projects. Public Engagement –Comments 19 1)Require affordable housing. 2)Preserve “small town feel”limit to 3-stories in height. 3)Incentivize grocery stores,and other residential amenities. 4)Prioritize addressing homelessness and improving existing infrastructure. 5)Enhance bicycle and transit programs. 6)Increase the size of the units,allow two-bedrooms. 7)Do not reduce parking. 8)Reduce parking further or eliminate for qualifying units. 9)Remove 500-unit cap and expand boundaries. 10)Reduce fees associated with housing developments. 61 27 24 23 21 15 15 11 10 10 Public Comments More Affordable Housing "Small Town Feel" Incentivize Amenities Prioritize Homelessness and Other Infrastructure Enhanced Bicycle and Transit Infrastructure Increase Size of Units No Parking Reduction Reduce Parking Expand the Program Remove Cost Barriers Public Engagement –Reasons for Support 20 General Response ▪58%in favor of the program,42%opposed to the program (304 responses). Top 5 Reasons for Support ▪Increases the supply of housing within downtown. ▪Promotes community goals for economic vitality of downtown businesses. ▪Provides more options for single household living within downtown. ▪Promotes community goals for active transportation such as bicycle and transit infrastructure and reduces vehicle dependency. ▪Prevents urban sprawl and preserves the city’s green belt by focusing development within the urban core rather than expanding out. 114 32 31 24 10 8 Reasons to Support Increases Housing Supply Support Economic Vitality Smaller Unit Living Support Alternative Transportation Prevents Sprawl Support Climate Action Public Engagement –Reasons for Opposition 21 General Response ▪58%in favor of the program,42%opposed to the program (304 responses). Top 5 Reasons for Opposition ▪Not enough parking downtown. ▪The units will not be affordable to those who need it. ▪Adding more housing downtown will create over- crowding which will increase crime and noise in the community. ▪Adding more housing will increase traffic throughout the community. ▪The size of the units within the Program are too small. 9441 34 29 13 9 3 Reasons for Opposition Insufficient Parking Unaffordable Overcrowding Increases Traffic Too Small of Units Water Infrastructure Impacts Viewshed