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HomeMy WebLinkAboutItem 5j followup, Tway (ProhousingDesignation requested memo) 6/30/2023 Christian, Kevin From:Christian, Kevin Sent:Friday, June 30, 2023 9:06 AM To:CityClerk Cc:Tway, Timothea (Timmi); Bell, Kyle; McClish, Teresa Subject:cc Tway (Item 5J - Prohousing Designation Program, requested memo) Attachments:Prohousing Memo Item 5J.pdf Bcc: Council All Dear Mayor and Council, Please find attached the requested follow-up to Council Agenda Item 5J, June 20, 2023 Agenda, from Community Development Director, Timmi Tway. Kevin Christian Deputy City Clerk City Administration City Clerk's Office 990 Palm Street, San Luis Obispo, CA 93401-3218 E kchristi@slocity.org T 805.781.7104 slocity.org Stay connected with the City by signing up for e-notifications 1 City of San Luis Obispo, Council Memorandum DATE: June 30, 2023 TO: Mayor and City Council FROM: Timothea Tway, Community Development Director VIA: Derek Johnson, City Manager PREPARED BY: Kyle Bell, Housing Coordinator Teresa McClish, Housing Policy and Programs Manager SUBJECT: Item 5J – Prohousing Designation Program Application (From June 20, 2023 City Council Meeting) Purpose At the June 20th City Council meeting, the City Council considered a resolution authorizing the City Manager to submit a Prohousing Designation Program Application to the California Department of Housing and Community Development. During discussion of the item, the City Council requested a memo from staff addressing comments received from a member of the public regarding the Prohousing Designation Program Application (City Council Agenda Item 5J). This memo provides contextual information about City progress, policies, and future plans related to housing and addresses the comments from the public. Background City Housing Programs and Accomplishments The City of San Luis Obispo has demonstrated a continuous commitment to advancing pro- housing actions to improve housing opportunities and incentivize housing production. Since the adoption of the 2021-23 Financial Plan, the Community Development Department has undertaken significant effort to implement the work programs identified in the Major City Goal for Housing and Homelessness. Several of the work program accomplishments related to housing are identified below; • On December 7, 2021, the City Council adopted the Objective Design Standards Ordinance No. 1703 (2021 Series), that provides for “by-right” housing development to streamline housing development processes, allowing supportive housing by right, allowing mixed use developments in service commercial and manufacturing districts, and reducing the number of hearings and approval steps for developments that include fewer than 50 residential units (Council Agenda Report). • On April 18, 2023, the City Council adopted the Downtown Flexible Density Program Ordinance No. 1726 (2023 Series), that expanded housing opportunities downtown by providing incentives the development of units under 600 square feet downtown. Item 5J – Prohousing Designation Program Application Page 2 • On August 16, 2022, the City Council adopted an update to the Inclusionary Housing Ordinance No. 1719 (2022 Series), that increases the amount of affordable housing units throughout the City through concurrent construction with residential development projects, or collecting and leveraging in-lieu fees or commercial linkage fees with affordable housing developers. Through this ordinance as well as our Density Bonus regulations, the City has a current estimated inventory of 1,499 deed-restricted affordable homes. Additionally, the City has approximately 533 affordable homes in the pipeline, with 214 affordable homes currently under construction. • Contracted with a Below Market Rate Housing Administrator, HouseKeys, to ensure more accountability, transparency, and efficiency in processing affordable housing transactions. This contract was recently extended another year to provide an opportunity for HouseKeys to make progress on processing applications and make overall improvements to their intake as the City onboards this administrator. A Request for Proposal (RFP) will be released next year to evaluate other options. In addition to the 2021-2023 Major City Goal work plan identified above, over the last two years, the City has implemented a variety of programs related to housing policies as identified below; • Updated the Subdivision Regulations that provides additional clarity and flexibility for lot design that will help increase homeownership opportunities. • Updated the Climate Adaptation and Safety Element that, in conjunction with other elements of the General Plan, including the Housing, Land Use, and Conservation, provides for increased safety and resiliency for SLO residents in the face of natural hazards and changing climate. • Adopted the City’s first Homelessness Response Strategic Plan that includes strategies for prevention and connection to shelter through a housing continuum. • Approved five(5) new affordable housing projects within the last two (2) years, that will provide for a total of 257 new affordable homes (2022 General Plan Annual Report). • Allocated $5.5M in Affordable Housing Fund awards to Toscano Apartments (Council Agenda Report), 736 Orcutt Road Apartments & Bridge Street Family Apartments (Council Agenda Report), Anderson Hotel and THMA Palm Street Studios (Council Agenda Report). The Toscano Apartments have nearly completed construction, and the Anderson Hotel officially closed escrow and is now under construction. • The State requires cities to reduce barriers to housing construction and plan for the number of new homes that need to be built in order to meet the housing needs of people at all income levels. This state mandate is called the Regional Housing Needs Allocation, or RHNA and the City of SLO’s RHNA obligation for the 2020-2028 cycle is 3,354 units. Through the City’s Housing Element implementation efforts including streamlined processes and incentives the City has already met 51% of our RHNA housing obligation (2022 General Plan Annual Report). Item 5J – Prohousing Designation Program Application Page 3 Public Comment In the public correspondence received for City Council Item 5J, the Prohousing Designation Program Application, a member of the public noted that several of the City’s housing policies presented in the application are required by state law and are not necessarily reflective of the City proactively addressing housing challenges. Specifically, the comment letter highlights the following categories as examples: • 1B – Permitting missing middle housing uses (e.g., duplexes, triplexes, and fourplexes) by right in existing low-density, single-family residential zones. • 1E - Increasing allowable density in low-density, single-family residential areas beyond the requirements of state Accessory Dwelling Unit law (e.g., permitting more than one ADU or JADU per single-family lot). These policies shall be separate from any qualifying policies under Category (1)(B) above. • 1F - Reducing or eliminating parking requirements for residential development as authorized by Government Code sections 65852.2; adopting vehicular parking ratios that are less than the relevant ratio thresholds. • 2I – Priority permit processing or reduced plan check times for ADUs/JADUs, multifamily housing, or homes affordable to lower- or moderate-income households. • 2C - Documented practice of streamlining housing development at the project level, such as by enabling a by-right approval process or by utilizing statutory and categorical exemptions as authorized by applicable law. • 3F - Adoption of universal design ordinances pursuant to Health and Safety Code section 17959. It is accurate that the City does indeed comply with State housing laws, and continues to ensure compliance with all applicable laws, and it should be noted that staff has not assigned points in the application for the categories in which the City regulations do not exceed the requirements of State law, as described in the application. The prohousing application, as well as the accomplishments outlined above, highlight the ways in which the City is meeting and exceeding state requirements for housing policy. The commenter also encourages the City to consider opportunities that proactively address housing challenges as highlighted in criteria 1A1, 1B, and 1C2, that are related to missing middle housing. The term "missing middle" is meant to describe a range of house-scale buildings with multiple units that are compatible in scale and form with detached single-family homes located in a walkable neighborhood. Through the Prohousing Program Application process the City has identified several new opportunities to consider in future work programs such as criteria 1A, 1B, 1 Category 1A: Sufficient sites, including rezoning, to accommodate 150 percent or greater of the current or draft RHNA, whichever is greater, by total or income category. 2 Category 1C: Sufficient sites, including rezoning, to accommodate 125 to 149 percent of the current or draft RHNA, whichever is greater, by total or income category. These points shall not be awarded if the applicant earns three points pursuant to Category (1)(A) above. Item 5J – Prohousing Designation Program Application Page 4 and 1C for consideration of new missing middle programs. The City remains dedicated to continuously working to implement proactive and progressive housing policies and will continue to identify areas for improvement. The 2023-2025 Financial Plan includes an updated work plan to address the continued efforts towards implementing the City’s Major City Goal for Housing and Homelessness. An expectation of this goal is that the City will prioritize policies and programs that continue to increase the production of housing, and implement the City’s General Plan Housing Element. The 2023-2025 Major City Goal work program for Housing and Homelessness includes the following actions that directly relate to the provision of a variety of housing types and “missing middle”: • Initiate a missing middle housing program that enables "house-scale" multi-family housing opportunities (duplex, tri-plex, bungalow court, etc.) in to be identified neighborhoods where existing infrastructure (e.g., arterial and collector streets, complete neighborhoods) can support additional infill and intensification. • Initiate an update to the Margarita Area Specific Plan to include more housing options of all types (affordable, multi-family, mixed-use) on undeveloped land, and work with property owners on a plan for the completion of the Prado Road extension to Broad Street. • Initiate an update to the Airport Area Specific Plan to allow mixed-use residential development, where appropriate and consistent with the County Airport Land Use Plan. • Conduct a Study Session with the City Council to identify needs and opportunities across the housing spectrum, including various types of transitional and supportive housing options. • Implement Below Market Rate Housing best practices including leveraging affordable housing fund revenues, down payment assistance programs, streamlined processing of loan documents, and updated policies and procedures. • Develop a scope of work for possible funding as part of the 2023-25 Financial Plan Supplement to update the City's parking requirements in consideration of best practices that support housing production. Strategies may include lowering parking minimums, establishing parking maximums, reducing parking requirements in areas close to services and transit facilities, and other proven strategies. Next Steps The purpose of this memo is to provide additional information related to City housing policies, programs, and accomplishments, as well as address public comment received regarding a previously considered City Council item. Staff will continue to implement the progressive housing programs adopted by the City Council. In addition, City Staff continues to support San Luis Obispo County and our affordable housing developers to leverage competitive state grant funds to increase the number and variety of residential units that provide interim and permanent supportive housing. The state’s Prohousing Designation would increase the City’s competitiveness for a Item 5J – Prohousing Designation Program Application Page 5 variety of housing and related infrastructure funding. Please contact Timmi Tway, Community Development Director with any specific questions or need for any follow-up information.