HomeMy WebLinkAbout3/21/2023 Item 7a, Codron / Bell – Staff Agenda CorrespondenceCity of San Luis Obispo, Council Memorandum
City of San Luis Obispo
Council Agenda Correspondence
DATE: March 20, 2023
TO: Mayor and Council
FROM: Michael Codron, Community Development Director
VIA: Kyle Bell, Housing Coordinator
SUBJECT: ITEM 7A - INTRODUCE AN ORDINANCE AMENDING TITLE 17 (ZONING
REGULATIONS) TO PROVIDE A DOWNTOWN FLEXIBLE DENSITY
PROGRAM (CODE-0017-2023)
The following memorandum provides City staff responses to comments received from a
Council member regarding the Downtown Flexible Density Program. Staff determined it
would be helpful to provide this memo to all Council Members and the public, as the
responses offer clarification regarding the proposed program.
1. Owner Occupancy. “...to prevent new units built under flexible density from becoming
vacant second homes in the downtown. I’m wondering: (1) If an owner occupancy
requirement is legally permissible? (2) If not, is there something that may have a
similar effect?”
Response: As proposed, the Downtown Flexible Density Program allows for
ownership units to be created, but is expecting the vast majority of units to be rentals.
There are very few owner-occupied housing units in the City that are the size of flexible
density units (600 square feet or less). The only required units to be owner-occupied
in the City have been on a volunteer basis by the property owner/developer. That said,
the ability to impose an owner-occupancy requirement may be feasible given the
voluntary nature of the program (e.g. it is a program that a developer may elect to
participate in). If the Council would like for staff to pursue an owner-occupancy
requirement for flexible density units, additional time would be needed to research
legal issues and develop appropriate municipal code language.
2. Inclusionary Housing Exemption. “I’m curious if the determination to waive the
inclusionary housing requirements came out of an economic analysis that led us to
believe that the IHO would make building these types of units too expensive for
developers to profit?”
Response: The recommendation is not based on an economic analysis, but follows
direction provided by the City Council when the Inclusionary Housing Ordinance was
updated on August 16, 2022. As part of the update, Council eliminated Table 2A
Item 7a – CODE-0017-2023
Downtown Flexible Density Program
Agenda Correspondence Memo Page 2
(Inclusionary Housing Adjustment Factors) and advised staff to explore other options
for incentivizing housing production of smaller units. The Flexible Density Program is
intended to accomplish this by allowing more residential density without increasing
affordable housing requirements. However, these projects are not exempt from the
Inclusionary Housing Ordinance in total. Inclusionary Housing Requirements would
remain in effect for all other components of a project, including the commercial linkage
fee for retail floor area, and the in-lieu fee for the residential units that are larger than
600 square feet.