HomeMy WebLinkAboutItem 8a. Study Session on Housing Needs and Opportunities Item 8a
Department: Community Development
Cost Center: 4008
For Agenda of: 3/5/2023
Placement: Study Session
Estimated Time: 90 minutes
FROM: Timmi Tway, Community Development Director
Prepared By: Teresa McClish, Housing Policy and Programs Manager
Daisy Wiberg, Homelessness Response Manager
SUBJECT: HOUSING NEEDS AND OPPORTUNITIES STUDY SESSION
RECOMMENDATION
Receive a presentation and conduct a study session on current status of the City’s
housing continuum, including options to increase and diversify housing supply in the City.
REPORT-IN-BRIEF
The purpose of this study session is to provide the City Council and the community with
an overview of the existing housing landscape in the City and summarize housing needs,
constraints, and opportunities. The discussion in the report is organized around the idea
of a “housing continuum,” as it is important to realize a variety of housing types in the
community. In addition to background information, the report identifies constraints and
various opportunities to encourage certain types of housing. Some of the opportunities
are being addressed in existing work plan items, and others could be integrated into future
work plans at the Council’s direction.
POLICY CONTEXT
The 2023-2025 Financial Plan Major City Goal for Housing and Homelessness is to:
Support the expansion of housing options for all, and continue to facilitate the
production of housing, including the necessary supporting infrastructure, with
an emphasis on affordable and workforce housing as well as accessibly
connected development. Collaborate with local non-profit partners, non-
governmental agencies, the county, the state, and federal governments to
advocate for increased funding and implementation of comprehensive and
effective strategies to prevent and reduce homelessness.
Included in goal implementation strategies is an action item to “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.”
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This study session is part of the ongoing implementation of the Major City Goal work plan
to implement the City’s 6th Cyle General Plan Housing Element, with policies and
programs that relate to increasing housing production and diversified supply shown in
Attachment A that are designed to work in concert to accomplish the vision for housing in
our community.
DISCUSSION
Background
Policy Background
The state of California has some of the most expensive home prices and rents in the
nation and the scale of the state’s homelessness crisis is larger than any other state and
worsened during the Covid-19 pandemic1. The intertwined housing and homelessness
crises have galvanized the state to pass a series of landmark legislation starting in 2017
to reduce barriers to housing production and increase local government accountability.
This has created the need and opportunity for local policy to be reshaped to align with
state legislative mandates, including policies to address the City’s Regional Housing
Needs Allocation (RHNA), or fair share housing needs assigned to each jurisdiction.
The City’s 6th Cycle Housing Element provides City policy, goals, and implementation
programs to address the City’s RHNA, housing supply, fair housing, housing affordability,
special needs housing and homeless response over an eight -year cycle. Additionally, the
inclusion of housing and homelessness response as a Major City Goal over the past
several financial cycles provide prioritization of City resources to address these crises.
Increasing opportunities for production of a variety of housing types combined with smart
growth principals as adopted in the City’s General Plan also align with Major City Goals
for Economic Resiliency, Cultural Vitality and Fiscal Sustainability by promoting a healthy
ratio of jobs and housing; Diversity, Equity and Inclusion by promoting accessible shelter
and housing; and Climate Action, Open Space and Sustainable Transportation by
reducing greenhouse gas emissions.
City’s Role in Housing
The City is a municipality that does not construct housing and does not receive funds for
homelessness response; however, as a regulator, the City can remove some barriers to
the provision of housing and plan for more housing in the community. This can be do ne
through policy changes, programs, and the creation of new infrastructure to support
housing and the new population that results from housing. In addition, the City can, and
does, collaborate with regional partners to diversity housing supply and c onnect the
unhoused with shelter and housing.
1 https://ternercenter.berkeley.edu/blog/five-recent-trends-california-homelessness/
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Through policies, the City can encourage certain housing types over others. Policy
changes can impact regulations (such as zoning regulations) or processes (such as the
process to seek approval for a new building). The City can also make policy decisions
about what type of housing or programs it will fund through its Affordable Housing Fund,
which has provided funding support for several important affordable housing projects that
total more than 600 new units.
Also through housing policy, the City can also co-solve for increasing needs for
community resiliency due to climate change and require housing development to facilitate
walkable and livable communities. For example, the City’s Flexible Density Program
allows unlimited density for downtown units smaller than 600 sq. ft., to incentivise
residential use near transit and jobs, and lower greenhouse gas emissions.
Population and Housing in San Luis Obispo
The City’s Housing Element and the United States Census2 provide information about the
population and housing stock that exists in the City. This is important information to
consider, as it can illustrate the unique housing needs of the community, which can inform
policy and funding decisions.
Several key population related statistics that should be considered are:
SLO is home to 47,063 people according to the 2020 census.
The average family size in SLO is 2.74 and in the State as a whole, it is 3.39.
The median household income in the City is $65,000; however, this number varies
greatly depending on the type of household. For example, for married -couple
families, the median income is $140,000, and for “nonfamily” households3, it is
$41,065.
According to the US Census 2022 American Community Survey, 31.5% of
residents in San Luis Obispo are experiencing poverty, as opposed to 12.2% of all
people in California. This is likely due to the significant student population, which
can impact income statistics.
The population pyramid figure below illustrates the age breakdown of the City’s
population, which shows a significant number of 20 to 24 year olds (due to students
residing in the City).
2 https://data.census.gov/profile/San_Luis_Obispo_city,_California?g=160XX00US0668154 ;
https://data.census.gov/table/ACSST5Y2022.S2504?q=housing%20stock%20san%20luis%20obispo%20
city&g=160XX00US0668154
3 Defined as hhouseholds with one or more non-relatives, and not including living alone (Housing Element
Appendix B – Section j).
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Figure 1 City population by age and gender
Key housing related statistics in the City include:
There are approximately 21,562 housing units in San Luis Obispo (as of 2020).
Of the occupied units in the City, 7.3% are studios, 13.4% are one bedroom, 62.2%
are 2 or 3 bedrooms, and 17.1% are 4 or more bedrooms.
According to the 2020 Housing Element, 40% of the housing units in the City are
multifamily structures, 53% are single family homes, and 7% are mobile home
units.
During the last housing element cycle (2014-2019), 1,548 units were constructed.
During the first half of the current eight-year RHNA cycle (2020-2028) at total of
2,047 units have been constructed.
SLO has a homeownership rate of 38%. California, as a whole, has a
homeownership rate of 55.8%.
In the City of SLO, approximately 62% of all residentially zoned land (1,714 acres)
is dedicated to single-unit zoning4, and between 2015 – 2020 approximately 50%
of all new housing constructed in the City were single-unit homes.
4 As of June 2023, the allocation of residentially zoned properties in City of SLO was: R-1 (7 units/net
acre)= 1,714.42 acres (62%); R-2 (12 units/net acre)= 631.42 acres (23%); R-3 (20 units/net acre)= 213.16
acres (8%); R-4 (24 units/net acre) = 220.51 acres (8%); Total = 2,779.52 acres
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The County of SLO is the second least affordable small metro area in the entire
nation. The cost of housing in the County is about 51.7% higher than the national
average, ranking it as a small metro area with the fourth highest housing cost in
the United States. As of February 2022, rent averaged at $2,347 per month – $719
more than the national average. The median rental household spends 38% of its
income on housing, meaning that over half of all rental households in the County
are at increased risk of homelessness due to the burden that housing costs place
on family budgets5.
The City's 6th Cycle Housing Element contains an extensive analysis of other pertinent
housing and population statistics and trends.
Regional Housing Needs Allocation (RHNA)
Importantly, the contents of the Housing Element are informed by the City’s RHNA. The
City’s RHNA number is the number of units that the City must plan to accommodate during
the Housing Element Cycle (in this case, the 6 th cycle, which spans 2020-2028). The
RHNA is broken down into affordability categories, which means the City must plan to
accommodate, and show progress in accommodating, housing units that are at multiple
affordability levels. The City’s RHNA requirement (3,354 total units) as well as the number
of units permitted through 2023 (2,555) is shown in the summary table below. Greater
details for RHNA progress will be provided in the 2023 General Plan Annual Report
scheduled for City Council consideration in April.
Table 2 Regional Housing Needs Allocation Progress
Income Level
(% of County
Median
Income)
6th Cycle
RHNA
Allocation
Building Permitted Units Issued
by Affordability
Total Units
Permitted
by Income
Level
Total Units
Remaining
by Income
Level Year 1 –
2020
Year 2 –
2021
Year 3 –
2022
Year 4 –
2023
Extremely
Low
24.5% 825 0 14 36 0 50 683
Very Low 14 42 14 22 92
Low 15.5% 520 36 82 71 5 194 326
Moderate 18% 603 13 9 2 47 71 532
Above
Moderate 42% 1,406 939 472 439 298 2,148 0
Total Units
3,354 1,002 619 562 415 2,555
Total
Remaining
for RHNA
Period:
1,615
5 SLO Countywide Plan to Address Homelessness
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The City has made significant progress toward meeting its RHNA mandate , meeting 54%
of the total RHNA halfway through the eight-year cycle. However, while the City has
issued permits for 742 Above Moderate dwelling units in excess of its requirement for this
income category, more progress is needed in below-moderate income categories: the
City is meeting approximately 12% for the Moderate-Income category, 37% for the Low-
Income category, and 17% of the Very-Low and Extremely-Low Income categories.
Housing Continuum
While land use policies and zoning regulations historically have focused on market rate
housing in typical formats such as single-family detached, single family attached, and
multi-family rental housing, in reality, housing needs are more diversified. Policies and
programs that identify and describe how housing needs can be met lend to an expanded
continuum of housing shown below in Figure 2. This expanded continuum can help meet
the needs of key beneficiary groups, including those who are experiencing homelessness,
those with special needs, families, seniors, students, and the city’s workforce.
Figure 2 Housing Continuum
As illustrated in the graphic above, the housing continuum includes:
Homeless: While not necessarily a housing type, this portion of the continuum
represents those in the community who are currently experiencing homelessness.
Emergency shelters: Emergency shelters are housing with minimal supportive
services for people experiencing homelessness.
Transitional housing: Transitional housing is a type of supportive housing used to
facilitate the movement of people experiencing homelessness into permanent
housing.
Permanent supportive housing: Permanent supportive housing consists of
permanent housing in which housing assistance (e.g., long-term leasing or rental
assistance) and supportive services are provided to assist households with at least
one member (adult or child) with a disability in achieving housing stability.
Below market rate housing (BMR): below market rate housing is housing that is
deed restricted to be affordable to households t hat meet certain income limits.
Generally, this type of housing is provided at low, very low -, or moderate-income
levels. These income levels are set by the California Department of Housing and
Community Development (California HCD), and are based on county and
household size; and the City publishes these Below Market Rate Income Levels
yearly on the City’s website.
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Market rental housing: market rental housing refers to rental housing that is rented
at market rates (not deed restricted regardless of price).
Market home ownership: market rate home ownership refers to housing that is sold
at market rates (not deed restricted regardless of price).
Housing needs analyses benefit from consideration of housing capacity that reduces the
number of the unhoused and houses a planned population by accommodating:
new housing supply,
diverse housing types,
residents’ ability to move through the housing continuum and secure housing to
meet specific needs, and
housing stock that is affordable for people and the cost of which does not exceed
30% of their income.
Goal of Study Session
This intent of this study session is to:
Provide the City Council with an overview of housing in San Luis Obispo using the
concept of a “continuum of housing” for all community members.
Provide the City Council with an opportunity to discuss housing needs and
opportunities.
Provide the City Council with an opportunity to provide staff with feedback and
direction as to whether there are opportunities that staff should further explore as
the City seeks to encourage the provision of a diverse housing stock for all
community members.
This report is organized using this concept of a housing continuum. In the remainder of
the report, information about needs, constraints, and opportunities for the various housing
types in the continuum is provided to guide City Council discussion.
Market Rate Rental and Home Ownership Housing
In general, it is easier for developers to build market rate housing than other housing
types in the continuum due to the fact that sale or rent prices can be set by the
developer/owner and reflective of market dynamics and thus are not price or deed
restricted. Market rate housing can take many forms including: single family detached
housing, duplex/triplexes, townhomes, apartments, condominiums, and Accessory
Dwelling Units (ADUs). New market rate housing can be provided in new larger
developments, on existing single-family lots (utilizing SB9 lot split or ADU regulations), as
well as on infill parcels or as part of mixed-use projects.
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Need for Market Rate Housing in SLO
According to the RHNA allocation, the City of SLO should encourage the construction o f
1,406 market rate housing units in the City by 2028. The City has already exceeded its
market rate housing unit target for this RHNA cycle with the approval of 2,148 market rate
units. There are an additional 478 units currently in the construction pipeline (please see
major development project pipeline in Attachment B). Market rate housing production is
needed to provide supply of rental apartments, townhomes, condominiums, ADU’s and
detached single family homes to help meet the needs of residents moving through the
housing continuum.
Constraints
While market rate housing can be easier to encourage than other types of housing, there
are constraints that impact the provision of such housing in the City. Som e constraints
cannot be directly addressed by the City (e.g. cost of construction, cost of land, interest
rates), while others can be impacted by City policy (e.g. zoning regulations, process for
project approval). Housing constraints are discussed at len gth in the 6th Cyle Housing
Element and include:
Cost and availability of land. Land is becoming increasingly more expensive, and
the cost of land is a significant constraint on the production of housing and can
impact the ability of a developer to make a project financially viable. The City
generally does not have the ability to impact this factor, however, implementing
process improvements that streamline housing project review can help, as this can
reduce holding costs for property owners during the entitlement and permitting
process.
Cost and availability of financing. Changes in the cost and availability of financing
also impact the provision of housing units. The City generally does not have the
ability to impact this factor, except for participation in down payment assistance
programs6, limited instances of infrastructure finance programs such as the
Statewide Community Infrastructure Program (SCIP)7 and other tax increment
financing generally available for below market rate housing.
Cost of construction. Construction costs have risen significantly (up to 80%8) in
the past several years and these costs, coupled with rising costs of insurance,
developer fees, and labor, can greatly impact the financial viability of housing
projects.
6 The City currently offers a program for affordable housing only through the State BEGIN program
described more under the BMR Housing Section. The City also participates in a Down Payment Assistance
Program in which the developer provides $20,000 in assistance for Avila Ranch Workforce units as required
through the project Development Agreement.
7 SCIP is a financing program that enables developers to pay most impact fees and finance public
improvements through an acquisition agreement that qualify under the 1913/1915 Act (excluding school
fees) via tax-exempt bond issuance proceeds (https://cscda.org/infrastructure-finance-programs/). The City
is participating in this program for a portion of the East Airport Annexation properties.
8 Residential construction costs have gone up 80% in 10 years. Stephen Peck Planning February 2024.
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Zoning regulations and policies. Zoning regulations can impact the ability of a
developer to create housing. For example, requiring parking can impact the ability
of a developer to provide housing units, because providing parking spaces costs
money and requires valuable land. Height limits and setbacks are other examples
of zoning regulations that restrict building area and profit margins.
Process constraints. Housing can also be constrained when the process for
permitting and approval of housing units can be confusing, uncertain, or lengthy.
Many cities, including SLO, have looked at process improvements and changes in
order to provide more certainty to developers, shorten the length of time required
to gain approval for housing units, and provide additional certainty to project pro-
formas9.
Opportunities to encourage the provision of market rate housing
There are things that a jurisdiction can do to encourage the provision of market rate sale
and rental housing in a community. This section describes what the City is doing to
encourage this type of housing, as well as opportunities that the City may want to consider
in the future.
Existing and Upcoming City Policies and Programs
1. Density Bonus Incentives:
Developers in the City may use Density Bonus Incentives that provide for
additional density on a site (allowing for more market rate units), as well as other
deviations from zoning standards, site development standards or parking
requirements in exchange for the provision of deed restricted below market rate
housing units in a project. The additional density allows for additional market rate
homes.
The City had previously increased incentives beyond state requirements to support
housing projects and gain more BMR units; however, these efforts have largely
been subsumed within the recent multi-year series of amendments by the state
legislature that make it easier for an applicant to secure greater density. Due to the
popularity of Density Bonus, the City is likely to see projects with higher density
and reduced parking as allowed by state law as this increases housing revenue
potential through the sale or rental of additional units. Nonetheless, housing costs,
as described above, remain formidable and still impact the feasibility for density
bonus projects.
9 A pro forma is the financial analysis a developer uses to estimate total development costs relative to
projected income (e.g., the revenue from monthly rents or sales) in order to determine financial feasibility
(https://ternercenter.berkeley.edu/research-and-policy/making-it-pencil-2023/)
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2. Policies to encourage missing middle housing:
“Missing Middle” housing is a range of multiunit or clustered housing types,
compatible in scale with single-family homes, that help meet the growing demand
for walkable urban living, respond to shifting household demographics, and meet
the need for more housing choices at different price points10. Missing middle
housing is considered within the market rate categories of the housing continuum
as this type of housing is not deed or price restricted at below market rates. The
City currently has policies in place (Housing Element Policy 5.3 and Program 5.4)
to address missing middle housing. A 2023 analysis prepared by ECONorthwest
on affordable-by-design housing in SLO County (SLOCOG/REACH’s Affordable
by Design study), concluded that market-rate developments that have rents that
are affordable to households earning less than 120% of the Area Medium Income11
(AMI) are significantly limited and for-sale units in the category are unlikely to be
viable12. Nonetheless, according to the ABD Study, while not considered
affordable, jurisdictions can implement a variety of regulatory and planning
measures to remove barriers and may support “missing middle” housing
production at a more moderate price point.
The City is taking a multi-pronged and expanded approach to missing middle
housing to include various smaller scale housing units and in districts allowing both
residential and mixed uses. The first prong is to implement state laws that directly
impact infill density for small lot, multi-unit dwellings13 or Accessory Dwelling Units
(ADU’s). To date, this prong primarily includes ADU laws, SB9 (Weiner) legislation
that allows four-dwellings on single family lots, and state Density Bonus Law. This
is important because these state laws already provide for increased densities and
flexibility in development standards and promote smaller units. The second prong
is to implement the Flexible Density Program. Third, as proposed further below
under opportunities, an update to the City’s objective design standards for small
lot and small house infill projects that can be approved ministerially, as well as pre-
approved ADU plans, to further promote missing middle housing. The final prong
is an update the City’s Zoning ordinance to potentially add incentives specific to
missing middle housing and potentially leverage provisions of state laws (Example,
SB10 [Weiner]) described further below, to increase residential density where
appropriate. The City has implemented a series of zoning provisions that allows
reduced fees or higher density for smaller units.
10 Parolek, D. (2020). Missing Middle Housing -Thinking Big and Building Small to Respond to Today’s
Housing Crisis. Island Press.
11 https://www.hcd.ca.gov/sites/default/files/docs/grants-and-funding/income-limits-2023.pdf
12 "Working with the Market: Understanding and Supporting Affordable-by-Design Housing in San Luis
Obispo County" Prepared for SLOCOG, August 2023
13 Multi-Unit Dwellings. Two or more dwelling units attached or detached, not including any accessory
dwelling units, on a site or lot. Types of multiple unit dwellings include a duplex, townhouses, common
interest subdivisions, garden apartments, senior housing developments, and multistory apart ment
buildings. Multi-unit dwellings may also be combined with nonresidential uses as part of a mixed -use
development. (Ord. 1705 §§ 99, 100, 2021; Ord. 1650 § 3 (Exh. B), 2018: Ord. 1647 § 7 (Exh. D (part)),
2018)
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The following is a summary of implementation programs that incentivize missing
middle units:
a. Density Bonus Law implementation provide incentives for smaller units as
higher densities are achieved for infill lots.
b. The inclusionary housing in-lieu fee is based on square footage. As a
result, smaller units have lower fees, which incentivise smaller infill
development.
c. The Downtown Flexible Density Program developed through the State
SB2 Grant programs removes density requirements for units less than 600
s.f. downtown.
d. Ministerial review and reduced fees for ADUs and JADUs;
e. The City utilizes a tiered fee structure that provides substantial reductions
in cost for smaller residential units for water, sewer and transportation
impact fees;
f. Minimum density allowances for residential districts: R-1=1 density unit; R-
2 = 2 density units; R-3 = 3 density units; R-4 = 4 density units14.
g. Fractional density allowances based on unit size and number of bedrooms
which allows more units (studios and 1-bedrooms less than 600 s.f. = 0.5
unit and 1-bedrooms less than 100 s.f. = .66 unit15;
h. Subdivision ordinance update that allows flexible lot design for R-1
districts.
i. Updated Tiny Homes on Wheels Regulations; and
j. Implementation of SB 9 (California H.O.M.E Act) allowing for up to four
houses on single-family lots.
3. Streamlining:
The City has amended its Zoning Ordinance and permitting practices to allow more
projects to be eligible for ministerial review and shorter processing time as follows:
a. Established new section to exempt specific housing projects from
discretionary review (17.106.020.C);
b. Streamlined Discretionary Review for Housing Projects less than 49 units
(17.106.030); and
c. Implemented E-review processes to allow digital permit and plan submittal
and review. This will improve transparency and hopefully streamline
existing permitting processes.
14 https://sanluisobispo.municipal.codes/Code/17.18.020;
https://sanluisobispo.municipal.codes/Code/17.20.010
https://sanluisobispo.municipal.codes/Code/17.22.020
15 https://sanluisobispo.municipal.codes/Code/17.70.040
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4. Mixed Use
The 2021 Zoning amendments included allowance of Mixed -Use Developments in
C-S and M zones by right. This has resulted in significant new area available for
residential development and a total of 621 units in the C -S or M zones that are
currently under building review or construction, including: Victoria Crossing (33-
units); Broad Street Place (40-units); Orcutt Mixed Use (5-units); Laurel Creek (98-
units); Bridge St. Apartments (94-units); Tribune Work-Live Project (43-units); 650
Tank Farm (249-units); 1030 Orcutt (15-units); and McMillan Mixed Use (44-units).
5. Objective Design Standards (ODS)
Objective design standards were approved by Council in December 2021 to
address projects approved in accordance with SB35 (Wiener) or otherwise
qualifying projects inclusive of a certain percentage of BMR units. Additionally, the
City allows for all qualifying projects that are required to be approved by -right
through state law to use these objective design standards, including urban lot splits
and 2-unit developments through SB9.
6. Specific Plan Amendments and other geographic opportunities
One way to directly encourage the provision of new housing is to provide additional
capacity through upzoning or by changing zoning to allow housing in areas where
it was previously not allowed. The City has incorporated the following two specific
plan updates into the 2023-25 Financial Plan Major City Goal work program for
Housing & Homelessness:
a. Margarita Area Specific Plan - The Margarita Area Specific Plan (MASP) was
adopted in 2004 and much of the residential development potential of the plan
was limited by the San Luis Obispo County Regional Airport, Airport Land Use
Plan. In 2021 the Airport Land Use Plan (ALUP) was amended. As such,
several areas of the MASP are either available for residential development
(where it was not allowed before) or available for higher density residential
development. Staff is preparing a Request For Proposals (RFP) for a consultant
to prepare amendments to the MASP that would increase density on existing
residentially zoned land and specifically include opportunities and incentives to
develop “Missing Middle” Housing types as well as allowing mixed-use
development on commercially zoned land. The RFP for consultant services to
move this effort forward is tentatively scheduled for City Council consideration
in April 2024. It is estimated to be completed in fall 2025.
b. Airport Area Specific Plan – Airport Area:
a. In 2020 the City amended the Zoning Regulations to allow mixed -use
development by right within the Service Commercial (C-S) and
Manufacturing (M) zones but did not extend this change to any of the
specific plan areas. With the update and amendment to the ALUP and
the recent allowance for mixed use development in the rest of the City,
the City is currently moving forward with an applicant-funded application
to review options for allowing mixed-use development with a Conditional
Use Permit where consistent with the ALUP. Approximate estimate for
work completion is by the end of 2024.
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7. Address parking as a potential barrier to housing.
As part of the current financial plan Major City Goal work program for Housing
and Homelessness the City will evaluate its parking requirements as described in
this program
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.
Staff have prepared a project plan and draft scope of work for a Parking Standards
Update. A City Council agenda item for approval of issuing RFP to move this
effort forward is tentatively planned for July 2024 depending on budget
supplement consideration.
Future Opportunities to encourage the provision of Market Rate Housing
In addition to the actions already being taken by the City, the City Council could consider
whether additional policy changes or work programs should be integrated into future work
programs.
1. Leverage new Impactful State Laws that create opportunities for missing middle
housing: There are several state laws that provide opportunities for alignment with
the Major City Goal work program, especially for the development of housing that
supports buyers who are ineligible for BMR housing but cannot afford more
expensive homes, and for the City to ensure that the housing meets policy
expectations for infill development and design. Three specific work program items
identified below would provide opportunities for missing middle housing in
conjunction with recent state law.
a. Amend and update the City’s Objective Design Standards (ODS) to better
address increased infill development expected from applications under recent
state laws. On January 1, 2022, the California HOME Act, or SB9 (Atkins) took
effect and makes it possible for low-density residentially (R-1) zoned properties
to split their lots and build up to four homes on a single-family parcel. In
anticipation of continued applications under this provision, amendments to the
ODS would include more design standards that would apply and facilitate
“missing middle” housing design, such as duplex, triplex, fourplex and cottage
style developments, to look similar to single family housing units and easily
integrate into existing lower density neighborhoods.
b. Customized Pre-approved ADU plans: AB 1332 (Carrillo) streamlines and
requires pre-approved ADU plans to incentivize ADU construction by January
1, 2025. Staff is in the process of allowing pre-approved ADU plans that were
developed by consultants for the County of SLO through a state grant to be
available for City use. The City may be able to seek additional grant support for
this effort, as it requires additional work to ensure plans comply with local
regulations.
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c. Pursue zoning amendments that increase missing middle housing
opportunities. A zoning ordinance could utilizing incentives through SB 10
(Wiener), which is a voluntary statute effective in 2022 through 2029 that
provides that local agencies may adopt an ordinance to allow up to 10 dwelling
units on any parcel, at a height specified in the ordinance, if the parcel is within
a transit-rich area16 (which is not applicable for the City) or urban infill site17
(which is applicable to infill areas of the City zoned for residential or mixed -
use18). The law also provides increased ability for pro-housing cities to increase
density without being subject to California Environmental Quality Act (CEQA)
processing. The purpose of pursuing the zoning update would be specifically
to further address incentivize duplex/triplex/fourplex housing units in limited
areas of the City. The statute has some limitations, and the City could pursue
upzoning regulations to increase missing middle housing opportunities with or
without provisions of SB10.
2. Specific Plan Amendments
a. Upper Monterey planning area: The current Financial Plan includes an effort
to begin outreach and engagement with property owners and businesses in the
Upper Monterey Special Focus Area to confirm scope in pursuing an area plan
consistent with Land Use Element Policy 8.2.2. This work is scheduled to
commence in the fourth quarter of FY25. The City could develop strategies for
the plan to include specific provisions to increase market rate ownership and
rental housing or missing middle housing, in addition to placemaking and
economic revitalization for the area.
b. Mid-Higuera planning area: The Mid-Higuera area could be explored as a
location for zoning changes that could encourage missing middle housing. This
work is not currently in the work plan but could be implemented in a future
financial plan consistent with General Plan Land Use Element Program 8.4 that
identifies the area as an opportunity to develop customized land use
approaches19.
3. Preapproved plans for “missing middle” housing.
In addition to including specific design criteria for “missing middle” housing in an
update to the City’s ODS, pre-approved plan sets could be developed similar to
pre-approved ADUs. This may include duplex, triplex, fourplex or cottage -style
development to be “house-scale” and fit into various neighborhoods.
16 “Transit-rich area” means a parcel within one-half mile of a major transit stop, as defined in Section
21064.3 of the Public Resources Code, or a parcel on a high-quality bus corridor.
17 “Urban infill site” refers to legal parcels in an urbanized areas, with at least 75% of site perimeter adjoining
parcels developed with urban uses, and zoned for residential or mixed use.
18 Approximate number of parcels based upon estimated zoning, lot size , and developed parcels.
19 General Plan Land Use Element Program 8.4 states: “Mid-Higuera Area. The City will update the plan
for this multi-block commercial area to reflect current needs and changes that have occurred since the 2001
plan was adopted".
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4. As indicated in the SLOCOG and REACH’s Affordable by Design study as
referenced above, the City could offer housing projects with missing middle design
the option of ministerial review with applicable ODS criteria.
Below Market Rate Housing
Below market rate (BMR) housing generally refers to housing that is deed restricted to be
affordable to community members at very low, low, or moderate incomes. BMR housing
can be more difficult to construct, as the constraints that hinder housing supply are
especially impactful to BMR housing, which has a smaller profit margin for developers,
and, developers may be relying on special financing for BMR projects/units.
Need for Below Market Rate Housing in San Luis Obispo
According to the Census, 31% of the population in San Luis Obispo experiences poverty;
however, this number is likely skewed by incomes of the relatively large student
population in the City. In addition, the City’s RHNA allocation indicates that the City should
encourage the construction of 825 very low income units, 520 low income units, and 603
moderate rate units between 2020 and 2028. BMR units are a crucial housing type in the
housing continuum as it provides vulnerable community members the ability to stay in the
community. It also provides much needed affordable housing for those who work in the
City but cannot afford market rate housing due to the high housing costs in the area.
To date, there have been 142 BMR units permitted in this housing element cycle. While
the City is only meeting approximately 21% of the total RHNA allocation for all BMR units,
it should be noted that several BMR projects received entitlements or have been deemed
eligible for building permit issuance and have or are expected to pull permits in 2024
because grant, tax credit or in-lieu funding has been appropriated, which will help show
significant RHNA progress next year. These projects include HASLO’s Bridge Street
Family Apartments and the Maxine Lewis Apartments that are about to start construction.
A summary of BMR units recently permitted or under construction are summarized in
Attachment C.
Nonetheless, the need for more housing that meets the need for those who make less
than 120% of median income is clear. It should be noted that the City gains its moderate -
income category allocation primarily by counting a portion of ADU’s as allowed by th e
California HCD. And while low, very- low-income category projects are challenging, they
do benefit from state and federal funding sources that are almost exclusively targeted to
the below-moderate income households, or households that earn less than 80% of the
AMI. There are far fewer opportunities to fund projects for households that do not qualify
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for below-moderate income units but also cannot afford market rate units in SLO because
they are generally making between 80% and 120% of AMI.
Constraints to the provision of Below Market Rate Housing
The constraints to the provision of BMR housing units are very similar to the constraints
for the provision of market rate units explained in the previous section of this report. For
BMR units in particular, the financing aspect is extremely important due to the fact that
BMR units generally do not make a profit and many affordable housing projects depend
on grant funding or other subsidies, such as tax credits.
Opportunities to encourage the provision of Below Market Rate Housing
Existing City Programs and Policies
The City has taken actions to encourage BMR housing units over several years. These
actions include:
1. Density Bonus Incentives work to promote higher densities in both the market rate
and BMR housing continuum. The incentives provide developers with significant
opportunities to construct more market rate housing with relaxed development
requirements with the provision of BMR housing.20 As explained above under
market rate housing, the City has implemented density bonus programs. These
programs also help make affordable housing more viable in a project. Minor
amendments to the Zoning Ordinance are needed to maintain consistency with
state Density Bonus Law, including recent state legislation, AB1287 (Alvarez),
which allows additional incentives and concessions. The ordinance update is
estimated to come to the Council before the end of 2024.
2. In 202221, the City updated its Inclusionary Housing Ordinance to help address
impacts that occur as a result of residential or commercial development in the
form of requiring BMR units or payment of an in-lieu fee. Since the most recent
version of the ordinance became effective in September 2022, $416,080 of in -lieu
fees have been collected22. Fees collected are placed in the City’s Affordable
Housing Fund and affordable housing developers may apply to the City Council
for funds for 100% BMR projects for low and very low-income eligible households.
3. Grant and long-term loan awards from the City’s Affordable Housing Fund. The
City’s AHF receives revenue through the IHO, loan repayments, one-time funds
directed by the City Council (for example, through the American Rescue Plan Act
(ARPA) see below), and anticipated future state Prohousing Incentive Funds.
20 The Density Bonus Law (found in California Government Code Sections 65915 – 65918) provides
developers with tools to encourage the development of affordable and senior housing, including up to a
50% increase in project densities for most projects, dependi ng on the amount of affordable housing
provided, and an 80% increase in density for projects which are completely affordable.
21 (Resolution No. 11349 (2022 Series)
22 Projects entitled prior to the Inclusionary Housing Ordinance are not subject to the updated in -lieu and
commercial linkage fees including San Luis Ranch and Avila Ranch.
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BMR housing developers, such as the Housing Authority of San Luis Obispo
(HASLO) and Peoples Self Help Housing (PSHH) apply to the City Council for the
funds for use of the funds for the provision of affordable housing and for
reasonable costs associated with the development of affordable housing at the
discretion of the Council23. The City has made 22 awards since 2003 for at total
of $15.7M and a total of 633 units (please see Affordable Housing Fund
information in Attachment D).
4. Streamlined Ministerial Approval Process provided through SB 35 and SB 423
(Wiener) that allows qualif ied multifamily infill projects with BMR housing units to
go through a simplified and expedited housing approval process and use
Objective Design Standards
for jurisdictions that are not meeting RHNA production in all categories.
3. Use of American Rescue Plan Act (ARPA) funds to leverage financing for
affordable housing projects. In June 2022, the City Council authorized a one -time
use of ARPA funds by allocating $2,964,467 into the Affordable Housing Fund in
the 2022-2023 Supplemental Budget to support at -risk populations via affordable
housing fund awards to be made at the City Council’s sole discretion24. This money
has been awarded to HASLO for the Anderson Hotel project and Maxine Lewis
Apartment Project.
4. Expand down-payment assistance programs for below-market assistance
programs. The City is a participant in the state Building Equity and Growth in
Neighborhoods (BEGIN) program that provides down-payment assistance loans
to first-time low and moderate-income homebuyers. The program was launched in
2009 through $300k from the California HCD and used for 10-units within the
Laurel Creek development. The City currently does not have available funds under
the BEGIN program but does make new loans based upon when older loans are
repaid. However, the state is not issuing new applications for program funds
through HCD. Work has recently started on development of an expanded program
using other state program funds, however feasibility has not yet been determined.
5. Further development of the City’s BMR Housing Administration, and updates to
Affordable Housing Guidelines and Standards and the City’s Equity Share
program. This program is needed to provide options, education and transparency
to better connect potential purchasers and renters to BMR units. The City has
previously updated standards and guidelines and continue to receive input from
the real estate and lending community to help eligible buyers. The standards are
continuing to be evaluated for potential updates to improve the process for
applicants, builders, and the City.
23 https://sanluisobispo.municipal.codes/Code/17.138.060
24 Resolution No. 11333 approving the allocation of $13,564,467 in State and Local Fiscal Recovery Funds
in Accordance with the U.S. Treasury Final Rule
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Future Opportunities to encourage Below Market Rate Housing
1. As the City is now designated as a Prohousing City by the state, application will
be made for Prohousing Incentive Program (PIP) funds that may be used for a
variety of purposes, including support for affordable and special needs housing
as well as for programs such as down payment assistance. Application for funds
for up to $750,000 is underway and expected to be submitted in March.
2. Investigation into bond programs or other local revenue measure could lead to
the generation of a dedicated local revenue stream. Tax exempt bond programs
could help increase the supply of BMR rental units for moderate-income qualifying
households by new construction of BMR units or allowing acquisition of market
rate apartment buildings that are then converted to BMR rental housing for
moderate-income households25 and provide rehabilitation of apartment unit stock.
General obligation bonds or a local revenue measure would similarly develop a
dedicated funding stream for BMR housing26. Such measures would require
outside resources to develop.
3. Update development impact fee loan deferrals that expand opportunities to help
reduce initial costs for projects that include affordable housing. Loan deferrals
are currently made to 100% affordable housing projects and helps projects
receive tax credit financing. An update to criteria for these loan deferrals in
consideration of best practices, and inclusive of loan deferral timelines and
repayment provisions may be ready for City Council in summer 2024.
4. SB 4 (Sen. Wiener) provides by-right approval and CEQA exempt status for
affordable housing on land owned by religious organizations and higher education
institutions, which sunsets on Jan 1, 2036. The City has 41 properties that would
qualify under this statute, 18 of which are larger than an acre and may allow
limited construction of units depending on many factors and interest. The City
has not received any applications under SB4, although there has been some
discussion in monthly faith community meetings with staff regarding opportunities.
Units could be BMR rental units or alternatively, as described below, units could
be temporary modular units and rented in conjunction with a supportive s ervice
partner. Incentives could be developed to encourage applications, with provision
of staff resources.
5. Leverage City property to promote BMR housing including providing funding
support for the Waterman Village on Dana Street. On February 6, 2024, the City
Council approved an amended and restated exclusive negotiating agreement with
Smart Share Housing Solutions to allow rehabilitation and adaptive re -use of the
25 Programs include the California Statewide Communities Development Authority (“CSCDA”), California
Community Housing Agency (“CalCHA”), and the California Municipal Finance Authority (“CMFA”).
26 The ability to pass local tax or bond measures may be impacted by the recent passage of Assembly
Constitutional Amendment 1, and dependent on the November 2024 election, may allow the threshold to
pass measures for taxes and bonds that cities use to pay f or affordable housing to be lowered from two-
thirds to 55%.
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City-owned Rosa Butron Adobe together with installation of small clustered BMR
residential units. If approved, the project would allow the City to leverage property
and an opportunity to consider awards from the Affordable Housing Fund to create
20-BMR housing units. The project is currently in the process of environmental
review.
Permanent Supportive Housing
Permanent Supportive Housing is below market rate housing that includes on or off -site
services to assist residents in retaining housing, improving their health status, and
maximizing their ability to live and, when possible, work in the community. Examples in
the City of permanent supportive housing are HASLO’s Anderson Hotel and the upcoming
People’s Self-Help Housing project at the Calle Joaquin Homekey, which together will
bring 144 additional permanent supportive housing units to the City. These units will add
to the 19 existing permanent supportive units operated by People’s Self-Help Housing at
Broad Street Plance and Brizzolara Apartments and 151 beds operated by Transitions-
Mental Health Association throughout the City.
Need for Permanent Supportive Housing in the Community
Permanent supportive housing has evolved to be more recognized in recent years as a
critical component in homelessness prevention and the reduction of homelessness due
in part to deinstitutionalization trends and the reduction of state funding for mental health
and social service programs27 over the last four decades and the growing popularity of
housing first policies.28
2022 Point in Time Count29 data for the City of San Luis Obispo shows that 248 individuals
were experiencing unsheltered homelessness, and 137 individuals were experiencing
sheltered homelessness, utilizing emergency shelters or transitional housing. Those 385
individuals represent a segment of the population tha t would benefit from permanent
supportive housing opportunities. Currently, unhoused individuals who are utilizing the
emergency shelter at 40 Prado Homeless Services Center, or other emergency shelter
or transitional housing options, are struggling to transition out of those short-term housing
options into permanent housing solutions due to the lack of available permanent
supportive housing.
27 https://californialocal.com/localnews/statewide/ca/article/show/4114-california-mental-health-crisis-
gavin-newsom-care-court/
28 https://files.hudexchange.info/resources/documents/Housing-First-Permanent-Supportive-Housing-
Brief.pdf
29 https://www.slocounty.ca.gov/Departments/Social-Services/Homeless-Services-Division/Point-in-Time-
Count/Previous-PIT-Count-Reports/2022-SLO-County-PIT-Count-Report.pdf
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Constraints
As permanent supportive housing is housing connected with social services, further
development of this type of housing supply requires collaboration with the County of SLO
and homelessness and housing services providers. Additionally, the service aspect of
this type of housing requires additional operating funding beyond capital and maintenance
expenses.
Opportunities to Encourage Permanent Supportive Housing
Existing City Programs and Policies
1. The City applied and received a Project Homekey grant from the State in the
amount of $19.4 million for the Calle Joaquin Homekey project with People’s Self-
Help Housing (PSHH) as co-applicants. This project will provide 75 additional
Permanent Supportive Housing units.
2. The City continues to collaborate closely with the County of San Luis Obispo to
implement the recently awarded $13.4 million Encampment Resolution Grant for
the Welcome Home Village project30 that will provide 46 permanent supportive
housing units as part of an 80-unit project to house people experiencing
homelessness on the Bob Jones Bike Trail Corridor. The City will utilize $574,000
of the grant funding for encampment outreach and services , including portable
restrooms and trash receptacles. This significantly impactful project will provide a
path back to housing for those that are currently living unsheltered in the Bob Jones
encampment corridor; reduce the burden of homelessness on surrounding
neighborhoods; and improve response capacity of service providers and outreach
teams.
3. The City amended the Zoning Ordinance in 2021 in accordance with state law to
allow permanent supportive housing b y-right in all zones in the City that allow
residential or mixed-use (a minor use permit is required in the Public Facility district
and the use is prohibited in Agriculture, Open Space or Business Park Districts),
and allow ministerial processing of permits in order to ensure that zoning or
process are not barriers to the development of this type of housing. Calle Joaquin
Homekey is an example of a Permanent Supportive Housing project that is being
processed ministerially through these zoning amendments.
Future Opportunities to encourage Permanent Supportive Housing
1. Provide continued support for permanent supportive housing partners as they
pursue additional projects in the City, including funding for THMA’s Palm Street
Studios. Palm Street Studios will provide six (6) one-bedroom units and two (2)
one-bedroom ADUs for a total of 8 supportive housing units. The project will also
provide behavioral health treatment and services for the most vulnerable homeless
individuals. Palm Street Studios is not yet included in the City’s RHNA numbers as
it is still in the pipeline. Although the City Council previously allocated $300K of
Affordable Housing Funds for the project, those funds were reallocated to the
Maxine Lewis Orcutt Road Apartments, and it is expected that THMA will re-
request funds in Sprint 2024.
30 https://www.slocounty.ca.gov/welcomehomevillage.aspx
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2. Leverage legislation under SB 4 (Weiner), as discussed above under the Future
Opportunities for BMR Housing section. This may come in the form of housing
units or pallet shelters that are developed or pla ced on church properties in
conjunction with a housing partner such as PSHH, HASLO or Habitat for Humanity,
and managed and operated with services provided as permanent supportive
housing units.
Transitional Housing
In addition to permanent supportive housing, interim or transitional housing opportunities
are needed to bridge the gap between unsheltered homelessness and the utilization of
emergency shelters and/or permanent supportive housing. Transitional housing provides
individuals and families with temporary, non-congregate housing, including supportive
services, to create stability and facilitate the transition into permanent housing.
Need for Transitional Housing
The population of individuals experiencing unsheltered and sheltered homelessness in
the City of SLO would benefit from the availability of transitional housing opportunities to
serve as an interim option until permanent housing is available. Transi tional housing also
serves as a helpful tool in preparing individuals for permanent housing by facilitating
treatment and service referrals, vocational training, and employment support.
Transitional housing programs traditionally operate on a 90-day minimum timeframe to
provide a period of time for participants to engage in supportive services and prepare for
the transition to permanent housing.
The City does not directly operate or fund transitional housing programs, however
Transitions Mental Health Association (TMHA) currently operates a 12-bed transitional
housing program in the City of SLO. The Adult Transitional Program (ATP) is facilitated
through a contract with the County’s Behavioral Health Department and requires direct
referrals from Behavioral Health. The transitional housing site is staffed 24-hours a day,
7 days a week and provides a higher level of care to clients with severe mental illnesses.
The maximum length of stay at ATP is 18 months.
TMHA was also recently awarded a 3-year contract from the County Behavioral Health
Department to operate a 10-bed transitional housing program similar to ATP with the
target population originating from and referred through the Countywide CARE Court
system similar to how clients are referred to housing through the Coordinated Entry
System. This new system is estimated to be implemented Countywide by the end of
2024. As a part of that program, TMHA will also operate an 8-bed step-down transitional
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housing program for clients moving towards housing independence who do not require
the higher level of support. These 18 transitional housing beds will be located within the
City of SLO and TMHA is scheduled to start housing clients in those projects in July 2024.
Constraints
Similar to permanent supportive housing, the social services that are integral to
transitional housing adds significant operational costs to housing developments. In
addition, a substantial constraint for transitional housing can be neighborhood opposition ,
which may lengthen the time frame and expense for approval and/or implementation of
transitional housing projects.
Existing City Programs and Policies
In recognition of the need and role transitional housing has in the City, the City has
actively partnered with the County of San Luis Obispo and other regional partners to
encourage the provision of more transitional housing. Specific projects and policies
supporting transitional housing include:
1. The Welcome Home Village project described above under the Existing
Opportunities for Permanent Supportive Housing section provides 34 transitional
housing units as part of the 80-unit project to house people experiencing
homelessness on the Bob Jones Bike Trail Corridor.
2. The 2021 Zoning amendments also allowed for transitional housing by-right in
most zones in the City (a minor-use permit would be needed in the Public Facility
district and the use is prohibited in the Agriculture, Open Space or Business Park
Districts), to allow ministerial processing of permits in order to ensure that zoning
or process are not barriers to the development of this type of housing.
Opportunities to Encourage Transitional Housing
1. Ongoing support for CAPSLO, which is working to develop projects in San Luis
Obispo to shelter and house families experiencing homeles sness with one-time
funding from a $5 million Bezos Day 1 Families Fund Grant. Potential projects may
include transitional and/or permanent supportive housing for families.
2. Other future opportunities for additional transitional housing will likely emerge
through grant opportunities and continued collaboration and support for Regional
Partners, including PSHH, Five Cities Homeless Coalition (5CHC), ECHO, TMHA,
Restorative Partners, and others.
Emergency Shelters
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Emergency shelters provide temporary shelter for unhoused individuals without requiring
participants to sign a lease or occupancy agreement. Emergency shelters generally
provide overnight shelter, meals, restrooms, showers, and laundry facilities, and other
basic needs such as toiletries, clothing, and bedding. Emergency shelters often include
case management requirements and/or housing-focused programming.
Need for Emergency Shelters
The City’s main opportunity for successful homelessness response efforts is
homelessness prevention by connecting individuals to shelter, services and housing.
Sheltering unhoused community members through emergency shelters does not only
offer lifesaving protection from the elements and critical provision of safety, but it is
inclusive of food, showers and restrooms, and connection to social services. Emergency
shelters are often the first point of contact unhoused individuals have to services and they
serve as the gateway to treatment, services, and housing opportunities. Emergency
shelters are not often considered as part of the housing continuum; however, shelters
operate as places community members live in the City.
Constraints
Since the City has no ongoing state or federal funding sources for social services, the
City has limited control over adequate operational resources to match needed capacity
for emergency shelters. The continued operation of emergency shelters requires a
substantial amount of funding. Additionally, similar to transit ional housing constraints,
emergency shelters encounter challenges related to community and neighborhood
opposition. The City allows Homeless shelters by-right in all zones except Agriculture,
Conservation/Open Space, Business Park, and R-1 districts. Funding is a critical
constraint as ongoing capacity needs, maintenance and operational needs are pressing.
Existing City Programs and Policies
The 40 Prado Homeless Services Center (40 Prado HSC) is the only emergency shelter
in the City and it has required significant investment from the City and County of SLO
over the past decade31. In response to the increasing need, expansion of other formats
of emergency shelters have expanded in the north and south county in the past few years ,
and the work of cities, county and service providers is evolving to inform a coordinated
system of shelter32. However, each facility operates near capacity limits.
1. Funding and collaboration: The 40 Prado HSC is the primary entry point for the
continuum of care for services, and it is a critical component of the housing
continuum for people experiencing homelessness. The City provides funding for
31 The Prado Day Center opened in September 1997, providing day services and meals in partnership with
The People’s Kitchen. In 2018, the Prado Day Center and the Maxine Lewis Memorial Shelter were
combined to form the new 40 Prado HSC facility, built in partnership between the public and private sectors.
40 Prado HSC remains the only emergency, congregate shelter in SLO County, serving unhoused
individuals countywide.
32 El Camino Homeless Organization (ECHO) operates a 60-bed shelter in Atascadero, and in 2020
expanded their operations to include 70 shelter beds in the Paso Robles Homekey. In South County, 5
Cities Homeless Coalition operates 20 temporary emergency shelter beds at their Cabins for Change site,
which utilizes modular units.
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the 40 Prado HSC from the general fund through each financial plan to support
ongoing operations for 129 shelter beds, overnight capacity expansion, warming
center, hotel voucher, and safe parking programming, and in -kind bus tokens,
currently funded at $238,826 through the 2023-2025 Financial Plan. Additionally,
CAPSLO has received funding through the City’s competitive grant programs,
including $341,959 of the City’s allocation of Community Development Block Grant
(CDGB) funds from 2020-202433.
2. Overnight Safe Parking: In 2013, the City adopted regulations for safe parking
facilities on property located outside of the public right-of-way in certain zoning
districts34. The purpose of the safe parking ordinance was to provide homeless
individuals and families with vehicles a safe place to temporarily park overnight in
order to facilitate the transition to permanent housing. The 40 Prado HSC recently
received approval of an amended conditional use permit to increase the capacity
of the 40 Prado Safe Parking Program from seven to twelve safe parking spaces
that provide people experiencing vehicular homelessness with a safe place to park
overnight and connection to services. The program requires participants to
register through the 40 Prado HSC and engage in case management35.
During the Statewide COVID-19 Emergency Declaration, the City of SLO
partnered with CAPSLO to implement an Overnight Safe Parking Pilot Program for
up to 20 vehicles at the Railroad Square location. The program operated from April
2021 to August 2023, and successfully facilitated permanent housing placements,
family reunifications, and job placements for participants.
In conjunction with the COVID-19 emergency order being lifted, the City’s Safe
Parking Pilot Program ended in August 2023 and participants transitioned to the
40 Prado Safe Parking Program. The City and CAPSLO are partnering with faith -
based organizations to develop a Rotating Overnight Safe Parking Program that
would provide 12 overnight safe parking spaces at various host site locations that
would rotate on a monthly basis.
The City also continues to advocate for a regional safe parking model to provide
safe parking for homeless individuals Countywide.
Future Opportunities to support success of Emergency Shelter
City programs to support Emergency Shelter are incorporated in the Homelessness
Response Strategic Plan, however two critical programs that require City funds and staff
support are described below:
1. Support strategic collaboration to ensure resiliency of t he 40 Prado HSC and
sustainability of emergency shelter operations due to the increasing homelessness
crisis and unanticipated events such as pandemic response and climate
33 The City receives yearly funding allocations for the CDBG program administered by the U.S. Department
of Housing and Urban Development (HUD) as a subrecipient of the SLO County Urban Counties
Cooperation Agreement.
34 Ordinance 1592 (2013 Series)
35 https://sanluisobispo.municipal.codes/Code/17.86.230
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adaptation for extreme weather events, including heat waves and flooding.
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2. Facilitate the establishment of small scale (12 parking spaces or less) overnight
safe parking programs operated in conjunction with the 40 Prado Safe Parking
Program at City and faith-based partner sites throughout the City in a rotating
format to provide individuals experiencing vehicular homelessness throughout the
city with safe locations to park overnight and connections to services, including
housing navigation services.
People Experiencing Homelessness
Need for Services
Homelessness is a component in the housing continuum because community members
live unhoused and unsheltered throughout the City. A conservative estimate of the
number of people experiencing homelessness is 385 according to the 2022 SLO County
Point-in-Time data, which includes individuals experiencing sheltered and unsheltered
homelessness. Ensuring available housing supply is critical to implement rapid re-housing
and/or homelessness prevention.36
Constraints
The greatest challenges to addressing and preventing homelessness are the ava ilability
of shelter, affordable housing, and services. In order to effectively and consistently
respond to homelessness, it is vital to have a robust continuum of housing offering
pathways out of homelessness and into permanent housing. In addition to hou sing and
shelter needs, the City is reliant on the County and regional partners to provide adequate
funding and services, including social services and behavioral health services. When the
provision of any or all of those services are at capacity, the City’s homelessness response
efforts are constrained.
36 Rapid Re-housing activities are designed to move people experiencing homelessness into permanent
housing as quickly as possible. Component services and assistance generally consist of short -term and
medium-term rental assistance, rental arrears, rental application fees, security deposits, advance payment
of last month's rent, utility deposits and payments, moving costs, housing search and placement, housing
stability case management, mediation, legal services, and credit repair. Homelessness Prevention activities
are designed to prevent an individual or family from moving into an emergency shelter or living in a public
or private place not meant for human habitation. Component services and assistance ge nerally consist of
short-term and medium-term tenant-based or project-based rental assistance, rental arrears, rental
application fees, security deposits, advance payment of last month's rent, utility deposits and payments,
moving costs, housing search and placement, housing stability case management, mediation, legal
services, and credit repair. https://www.hudexchange.info/homelessness-assistance/coc-esg-virtual-
binders/esg-program-components/rapid-re-housing/
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Existing and Future Opportunities to Reduce Homelessness
Homelessness Strategic Plan
The City’s first Homelessness Response Strategic Plan was adopted by City Council on
March 21, 2023, as a two-year plan to support the Countywide Plan to Address
Homelessness. This study session provides the opportunity to focus on housing and
homelessness response. Additionally, homelessness response activities specific to
homelessness prevention are tied to key component areas in the Homelessness
Response Strategic Plan and summarized in Attachment E. Staff will be providing an
update of the City’s Strategic Plan to the City Council in May 2024.
Summary of Future Opportunities to Fill Gaps in Housing Continuum
For City Council consideration, future opportunities identified above for each component
of the housing continuum are summarized in Attachment F, with preliminary
considerations from staff. Most programs will require capacity and resources to assess
feasibility.
Focus Questions
Focus questions identified for consideration of the proposed strategic direction are
summarized below:
1. Are there housing types on the housing continuum or programs that are of special
interest to the City Council that should be pursued in the next financial plan?
2. Are there housing types or programs that are not discussed in this report that staff
should consider?
3. Which of the programs in Attachment F does the City Council direct staff to explore
for future work programs for the next financial plan cycle, for which planning will
begin in the Fall, in balance with competing needs.
Previous Council or Advisory Body Action
Previous City Council actions applicable to the Housing MCG work program include:
Objective Design Standards
2021 Zoning Regulations Update
Flexible Density Ordinance
Subdivision Ordinance Update
Homelessness Response Strategic Plan
Homekey Round 3
Prohousing Designation
Public Engagement
Housing Engagement Activities that impact this study session benefitted from the public
outreach process conducted during the update of the 2020 Housing Element, and public
engagement activities for previous City Council actions listed above.
Page 99 of 116
Item 8a
Primary Homelessness Response Engagement Activitie s continue to benefit from the
Homelessness Response Strategic Planning community engagement efforts and the
recently conducted Annual Community Survey, which received 366 responses .37
CONCURRENCE
Community Development concurs with this report. For Homelessness Response, the
City’s Steering Committee for Homelessness Response have provided input into housing
and homelessness prevention activities listed in this report.
ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) does not apply to the recommended
actions in this report because the actions do not constitute a “Project” under CEQA
Guidelines Section 15378. If a housing project or programs is developed, it will be
evaluated to determine if the project or program or any of its components requires
environmental review under CEQA prior to adoption.
FISCAL IMPACT
Budgeted: Yes Budget Year: 2023-25
Funding Identified: N/A
Fiscal Analysis:
Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund $ $ $ $
State
Federal
Fees
Other:
Total $ $ $ $
There are no fiscal impacts directly associated with this item. Actions to address issues
related to the City’s housing continuum, including options to increase and diversify
housing supply in the City may have an associated fiscal impact. Those impacts will be
identified at the time that specific recommendations are made to the Council.
37 https://communityfeedback.opengov.com/portals/sanluisobispoca/Issue_13401
Page 100 of 116
Item 8a
ALTERNATIVES
Continue consideration to a future meeting. If the City Council does not have sufficient
information to provide direction to staff, or if additional time is needed for discussion, the
Council can continue consideration of the item to a future meeting. If the City Council
decides to continue the meeting, direction should be provided to staff on any additional
information needed to complete the discussion.
ATTACHMENTS
A – Key Housing Work Program
B – Major Development Projects
C – BMR Pipeline Projects
D – Affordable Housing Fund
E – Key Components Homelessness Strategic Plan
F - Summary of Future Potential Housing Opportunities
Page 101 of 116
Page 102 of 116
ATTACHMENT A
KEY HOUSING WORK PROGRAM PROJECTS
Table 1 Key Housing Work Program Projects
HE
Program
No.
HE Policy or Program
Key Housing Work
Program Projects
Status
6.22; 2.17;
2.18
Update the City’s municipal code to expand
objective design standards within one year of
the adoption of the Housing Element Update:
Allowance of developments that include at least
20% low income affordable units by-right:
Utilize objective design standards to allow
residential uses by-right for developments that
include at least 20% low income units
Objective Design
Standards
(Streamlining)
Completed
5.5
Update the Zoning Regulations to allow mixed-
use development within Service Commercial (C-
S) and Manufacturing (M) zones
Zoning Code Update
(Add Flexibility) Completed
6.23
Update the development review process and
expand the thresholds of each review level
(minor, moderate, and major) to eliminate or
reduce the number of public hearing required
for housing projects within one year of adopting
the Housing Element.
Zoning Code Update
(Streamlining) Completed
2.13
Update the Inclusionary Housing Ordinance,
including Table 2A, based on findings and
recommendations in the 2020 Affordable
Housing Nexus Study and conduct further
feasibility analysis in order to evaluate the City’s
ability to provide affordable housing in the
proportions shown in the Regional Housing
Needs Allocation, per Policy 2.4.
Inclusionary Housing
Ordinance (IHO) Update
(RHNA)
Completed
4.6
Amend the City’s Inclusionary Housing Ordinance
to require that affordable units in a development
be of similar size, number of bedrooms, character
and basic quality as the non-restricted units in
locations that avoid segregation of such units,
including equivalent ways to satisfy the
requirement. Also evaluate adjusting the City’s
allowable sales prices for deed-restricted
affordable units per a variety of unit types.
IHO Update
(BMR Housing
production)
Completed
Page 103 of 116
2.15
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.
Flexible Density (Missing
Middle) Completed.
6.20
Evaluate and update the Subdivision
Regulations, within three years of Housing
Element adoption, to support small lot
subdivisions, ownership bungalow court
development and other alternatives to
conventional subdivision design.
Subdivision Update
(Missing Middle) Completed
5.3 and
5.4
Encourage the development of a variety of
“missing middle” housing types.
Evaluate and implement “missing middle”
housing types (e.g. duplex, triplex, quadplex,
cottages, etc.) to increase housing options in the
City within three years of adopting the Housing
Element
Missing Middle Housing Ongoing
1.1 Assist those citizens unable to obtain safe shelter
on their own.
Homelessness Response
Strategic Plan
Ongoing
2.4
Encourage housing production for all financial
strata of the City's population, as allocated in the
Regional Housing Needs Allocation, for the 6th
cycle planning period. The number of units per
income category are: extremely low and very low
income, 825 units; low income, 520 units;
moderate income, 604 units; and above
moderate income, 1,405 units
RHNA Ongoing
3.5
Encourage and support creative strategies for the
rehabilitation and adaptation and reuse of
residential, commercial and industrial structures
for housing.
Project Homekey
(BMR production and
Homelessness Response)
Ongoing
6.8
To help meet the 6th cycle RHNA production
targets, the City will support residential infill
development and promote higher residential
density where appropriate.
Updates to Airport Area
Specific Plan and Santa
Margaria Area Specific
Plan
(RHNA; Missing Middle)
Ongoing
7.3
Higher density housing should maintain high
quality standards for unit design, privacy,
security, amenities, and public and private open
space. Such standards should be flexible enough
to allow innovative design solutions.
Second update Objective
Design Standards
(Missing Middle
Ongoing
Page 104 of 116
9.3
Continue to encourage the development of
dwellings with energy-efficient designs, utilizing
passive and active solar features, and the use of
energy-saving techniques that exceed minimums
prescribed by State law.
Clean Energy for New
Buildings
(Sustainability)
Ongoing
8.1
Encourage housing development that meets a
variety of special needs, including large families,
single parents, disabled persons, the elderly,
students, veterans, farmworkers, the homeless,
or those seeking congregate care, group housing,
single-room occupancy, or cohousing
accommodations, utilizing universal design.
Flexible Density Program;
Collaborating with BMR
developers; Leveraging
ARPA funding for
Anderson Hotel and
Maxine Lewis Orcutt
Road Apartments;
Project Homekey;
supporting SLO County
Encampment Resolution
Grant/Welcome Home
Village
Ongoing
Page 105 of 116
Page 106 of 116
Attachment B
Major Development Projects in the Construction Pipeline
Major Development Projects
Development Status Unit Count
Orcutt Area Under Construction 36
San Luis Ranch Permits Issued 164
Avila Ranch Under Construction 66
2800 Broad Mixed-Use Under Construction 20
Lofts at the Creamery Under Construction 36
1131 Olive Mixed Use Under Construction 10
Peach Street Commons Under Construction 5
Laurel Creek Mixed Use Under Construction 100
Montalban Mixed Use Under Construction 11
Victoria Crossing Mixed Use Under Construction 30
Total 478
Page 107 of 116
Page 108 of 116
ATTACHMENT C
RECENTLY PERMITTED AND PIPELINE BELOW MARKET RATE HOUSING PROJECTS
Project Name
Affordability
Status Total
Units
Extremely
Low
Very
Low Low Moderate Caretakers
Broad Street
Place 40 12 7 20 0 1 Under Construction
Toscano 38 2 27 8 0 1 Under Construction
Tiburon Place 68 24 15 28 0 1 Under Construction
The Anderson
Hotel 68 66 0 2 Under Construction
Bridge Street
Family Apt 94 94 0 Building Permit Review
Jones Mixed-
Use 9 9 0 Building Permit Review
Palm Street
Studios 8 8 0 Building Permit Review
Monterey
Mixed Use 106 106 0 Entitlements Approved
Orcutt Road
Apartments 40 39 0 1 Entitlements Approved
Waterman
Village 22 21 0 1 Entitlements Under Review
Victoria
Mixed-use 33 33 0 Entitlements Under Review
Avila Ranch
Multi-Family 60 Awaiting Submittal
Project
Homekey* 75 75 Building Permit Review
Welcome
Home Village* 80 80 SLO County Self Permit
TOTAL 741** 193 123 358 0 7
*Permanent and Transitional Housing Units included for the purposes of RHNA reporting. Income levels
estimated.
** Income levels for Avila Ranch Multi-family not yet estimated.
Page 109 of 116
Page 110 of 116
ATTACHMENT D
Affordable Housing Fund Awards
Year Project AHF Award Unit Count
2002-03 Judson Terrace Lodge $ 215,000.00 32
2006-07 Peoples' Self Help Housing: Villas
at South Higuera $ 500,000.00 28
2007-08 Moylan Terrace $ 709,900.00 27
2008-09 Habitat for Humanity $ 332,500.00 2
2009-10 Aids Support Network $ 82,780.00 4
2009-10 Village at Broad $ 1,905,809.00 41
2009-10 Wineman Hotel Rehab $ 1,500,000.00 30
2009-10 TMHA 3592 Broad $ 174,700.16 2
2011-12 Habitat for Humanity $ 38,783.00 3
2014-15 South Street Apartments $ 650,000.00 43
2014-15 TMHA Supportive Housing $ 95,814.00 1
2014-15 860 On the Wye $ 352,029.00 20
2014-15 Iron Works $ 920,000.00 46
2016-17 Bishop Street Studios $ 850,000.00 34
2017-18 Courtyard at the Meadows $ 630,000.00 36
2019-20 Broad Street Place $ 1,300,000.00 40
2019-20 Tiburon Place $ 700,000.00 68
2020-21 HASLO-SLONP At-Risk of
Homelessness Acquisition $ 77,000.00 1
2020-21 Toscano Apartments $ 335,000.00 38
2021-2022 Anderson Inn Acquisition and
Renovation $ 1,700,000.00 68
2023-24 Bridge Street $ 1,429,286.00 30
2023-24 Maxine Lewis Apartments $ 1,264,467.00 39
Total $ 15,763,068.16 633
Page 111 of 116
Page 112 of 116
Key Components Progress and Opportunities
1 Communications
Enable equitable access to resources and
increase transparency so that all community
members are aware of efforts to address
gaps in service and know where/how/when
to reach out for assistance to address
concerns related to homelessness.
• Provision of Homeless Resource Pocket
Guides to unhoused community
members, businesses, and community
partners to help connect individuals with
resources and emergency shelter.
• Annual Homelessness Response Survey
conducted to receive input and prioritize
housing needs for our community.
2 Data
Streamline internal and external data
collection processes to enable timely and
effective coordination of homelessness
response efforts and provide analysis to
inform best practices.
• Collaborated with County on 2024 Point
in Time Count to establish baseline data
for the number of individuals
experiencing unsheltered and sheltered
homelessness in the City of SLO.
3 Pilot Programs
Collaborate with the County to develop
scalable and replicable programs to
connect those experiencing homelessness
to a variety of shelter and housing options
through timely outreach, and advocate for
County implementation of successful
programs.
• SLOPD’s Community Action Team (CAT)
engaged with 408 people in 2023, with
258 individuals electing to receive
referrals to mental health and/or
substance abuse services. CAT also
reunified 6 individuals with family
members or agencies and facilitated 3
permanent housing placements.
• The Fire Department’s Mobile Crisis Unit
(MCU) established 3,285 contacts with
individuals experiencing homelessness in
2023, reunified 91 individuals with
agencies or family, provided 56
transports to services or alternate
facilities, and fielded a total of 265 mental
health crisis intervention calls for service.
• Collaborating with faith-based
organizations and CAPSLO to develop a
Rotating Overnight Safe Parking
Program
• The City continues to advocate for
scalable and replicable programs
Countywide, including a Regional Safe
Parking Program.
4 Funding Opportunities
Proactively seek funding opportunities to
meet localized needs as aligned with
regional goals to prevent and address
homelessness.
• Collaborated with the County on the
Encampment Resolution Funding
opportunity, which was awarded in June
2023 for the Welcome Home Village
(WHV) Project. WHV will provide 34
transitional housing units and 46
permanent supportive housing units.
• Collaborated with People’s Self-Help
Table 1: Homelessness Response Strategic Plan Goals
Page 113 of 116
Key Components Progress and Opportunities
Housing, the County, HASLO, and the
Balay Ko Foundation on a Homekey
Round 3 application, which was awarded
in December 2023 for the Calle Joaquin
Homekey Project. Calle Joaquin
Homekey will provide 75 permanent
supportive housing units.
5 Regional Collaboration & Engagement
Engage regional partners in collaborative
efforts to improve the effective use of
resources.
• Collaborating with County, regional
housing and homeless services
providers, and community organizations
to identify housing continuum and service
needs, establish priorities, and develop
implementation strategies.
Page 114 of 116
ATTACHMENT F
SUMMARY OF POTENTIAL FUTURE OPPORTUNITIES TO FILL GAPS IN THE SLO
HOUSING CONTINUUM
PROJECT OR PROGRAM RESOURCE INTENSITY APPROXIMATE
TIME NEEDED
TO COMPLETE
MARKET RATE HOUSING
1. Leverage New or Recent State Laws
1a. Update Objective Design standards
Medium (may seek state
grants)
< 1 yr.
1b. Customized Pre-approved ADU plans
Low to medium -depending
on the number of plans to
provide as pre-approved
< 1 yr.
1c. Allow additional density through zoning
amendments in limited areas to allow more
missing middle housing
High 1 yr. – 2 yr.
2. Specific Plan Amendments
2a. Upper Monterey planning area High 1 yr. – 2 yr.
2b. Mid-Higuera planning area High 1 yr. – 2 yr.
3. Pre-approved plans – “missing middle”
typologies
Medium 1 yr. – 2 yr.
4. Zoning amendments for additional project
to receive ministerial review
Medium < 1 yr.
BELOW MARKET RATE HOUSING
1. Apply for Prohousing Incentive Program
(PIP) funds
Low, underway (additional
NOFA’s expected in the
future)
Immediate
2. Participate in state tax exempt bond
programs to help increase the supply of
BMR rental units; or local revenue measure
High 1 yr. – 3 yr.
3. Update development impact fee loan
deferral program
Low <1 yr.
(summer
2024)
4. Develop incentives for property owners
for SB4 housing development
Medium 1yr. – 2yr.
5. Support BMR housing on City property –
Waterman Village
Low < 1 yr.
Page 115 of 116
PROJECT OR PROGRAM RESOURCE INTENSITY APPROXIMATE
TIME NEEDED
TO COMPLETE
PERMANENT SUPPORTIVE HOUSING
1. Fund and collaborate with supportive
housing partners including TMHA and PSHH
to develop additional units
Low - medium ongoing
2. Collaborate and develop a program with
housing partners, service providers and the
faith community for small-scale permanent
housing development on church properties.
Medium 1yr. – 2 yr.
TRANSITIONAL HOUSING
1. Support potential CAPSLO projects to
house families experiencing homelessness
including potential project to provide beds
and housing for families.
Low - medium <1 yr.
2. Pursue grant funds and collaborate with
service providers to development more
beds.
Low - medium ongoing
EMERGENCY SHELTER
1. Support Resiliency Strategic Plan for 40
Prado HSC
Low <1 yr.
2. Support 12-parking space expansion of
overnight safe parking through 40 Prado HSC
rotating safe parking program.
Low – medium <1 yr.
HOMELESSNESS RESPONSE
1. Continued resource support to implement
the Homelessness Response Strategic Plan.
Medium ongoing
Page 116 of 116
1
Housing Needs and Opportunities
City Council Study Session
March 5, 2024
2
Recommendation
Receive presentation and conduct a study session on
current status of the City’s housing continuum,including
options to increase and diversify housing supply in the City.
Feedback will inform future work plan items.
3
Purpose of Study Session
1.Provide an overview of housing in San Luis Obispo using concept of
a “continuum of housing” for all community members.
2.Provide an opportunity to discuss housing needs and opportunities
within the City’s role in housing.
3.Provide City Council with an opportunity to provide staff with feedback
and direction as to whether there are opportunities that staff should
further explore as the City seeks to encourage the provision of a
diverse housing stock for all community members.
4.This study session will not cover all aspects of housing opportunities
and will focus on City role in housing and homelessness response.
4
Background
•2023-2025 Financial Plan Major City Goal for Housing and Homelessness
included an action item to “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”
•2020-2028 City 6th Cycle General Plan Housing Element includes policies
and programs to increase housing projection and diversified supply
•2023 City adopted first Homelessness Response Strategic Plan including
measures to increase opportunities for shelter and housing
5
Housing and Homelessness Crises
CA has some of the most expensive
home prices and rents in the nation
and scale of homelessness crisis is
larger than any other state
Significant housing legislation since
2017 to remove housing barriers and
increase accountability
Need and opportunity to reshape local
policy to align with state legislative
mandates including Regional Housing
Needs Allocation (RHNA)
City’s Major City Goals help prioritize
implementation of 6th Cycle Housing
Element for supply, fair housing,
affordability, special needs and
homelessness response
Opportunities exist for a variety of
housing types combined with General
Plan smart growth principals to align
with other City Major City Goals
6
Regional Housing Needs Allocation (RHNA)
7
Housing Continuum
8
Housing Continuum –Market Rate Housing
2,126 permitted units
2020-2028 RHNA Cycle
9
Market Rate Housing
NEED:
•City has exceeded RHNA -Success!
•Market rate housing production is needed to provide supply of rental
apartments, townhomes, condominiums, ADU’s and detached single
family homes to help meet the needs of residents moving through the
housing continuum.
•Market Rate housing includes the concept of "missing middle" housing
CONTRAINTS:
•Cost and Availability: land; financing, construction
•Zoning regulations and policies
•Process constraints
10
Market Rate Housing
Existing and Continuing Opportunities
11
Incentives to “Missing Middle” housing
a.Density Bonus Law implementation provide incentives for smaller units as higher
densities are achieved for infill lots.
b.The inclusionary housing in-lieu fee is based on square footage. As a result, smaller
units have lower fees, which incentivise smaller infill development.
c.The Downtown Flexible Density Program developed through the State SB2 Grant programs
removes density requirements for units less than 600 s.f. downtown.
d.Ministerial review and reduced fees for ADUs and JADUs;
e.The City utilizes a tiered fee structure that provides substantial reductions in cost for smaller
residential units for water, sewer and transportation impact fees;
f.Minimum density allowances for residential districts: R-1=1 density unit; R-2 = 2 density units;
R-3 = 3 density units; R-4 = 4 density units.
g.Fractional density allowances based on unit size and number of bedrooms which allows more
units (studios and 1-bedrooms less than 600 s.f. = 0.5 unit and 1-bedrooms less than 100 s.f. =
.66 unit;
h.Subdivision ordinance update that allows flexible lot design for R-1 districts.
i.Updated Tiny Homes on Wheels Regulations; and
j.Implementation of SB 9 (California H.O.M.E Act) allowing for up to four houses on R-1 lots
12
Market Rate Housing
Future Opportunities
•Update Objective Design Standards to better address infill development with (SB9 and SB684)
•Customized Pre-approved ADU for AB1332
•Zoning for small infill (SB10)
Leverage new impactful state laws that create missing middle housing
•Upper Monterey Special Focus Area
•Mid-Higuera Planning Area
Area Plan Amendments
Preapproved plans for missing middle housing
Incentives through permit processing for missing middle housing
13
Housing Continuum –Below Market Rate Housing
50 permitted
units 2020-
2028 RHNA
Cycle
379
permitted
units
2020-2028
RHNA Cycle
14
BMR HOUSING NEED:
RHNA Need/Progress = Meeting approximately 21%
BMR units are a crucial housing type in the housing continuum as it provides
vulnerable community members the ability to stay in the community. It also
provides much needed affordable housing for those who work in the City of SLO.
BMR HOUSING CONTRAINTS:
Like Market Rate –with financing usually dependent on grant funding or other
subsidies
14Below Market Rate Housing
15
Below Market Rate Housing
Existing and Continuing Opportunities
1.Density Bonus Incentives (AB1287) ordinance update
2.Inclusionary Housing Ordinance
3.Long-term loan awards from the City’s Affordable Housing Fund
4.Streamlined Ministerial Approval Process (SB35) and (SB423)
5.Use of ARPA funds to leverage Anderson Hotel and Maxine Lewis Apartments
6.Upcoming –Expansion of Down Payment Assistance Programs
7.Further Development of City’s BMR Housing Administration
16
Below Market Rate
Future Opportunities
1.Application and use of Prohousing Incentive Funds
2.Local Revenue Measures
3.Update Fee Deferral Loans for BMR projects
4.BMR housing on church properties (SB4)
5.Leverage City property to promote BMR housing
and historic preservation –Waterman Village project
17
Housing Continuum
291 Beds/Units
•170 Existing
•121 In queue
18
Definition: Permanent housing in which housing
assistance and supportive services are provided to
assist households with at least one member with a
disability in achieving housing stability.
Need: Critical component for individuals with disabilities to
transition out of homelessness and emergency shelters
Examples:
1.Anderson Hotel – Housing Authority of SLO
2.Broad Street Place – People’s Self-Help Housing
3.151 beds operated at various Transitions-Mental
Health Association locations
Permanent Supportive Housing
19
Programs & Policies
State Funding Opportunities
a.Homekey –$19.4M award for
Calle Joaquin Homekey project
with PSHH
b.Encampment Resolution Funding
–SLO County Welcome Home
Village project
Zoning Ordinance (2021)
a.Allow PSH by-right in all zones
that allow residential or mixed-use
Future Opportunities
a.Collaboration with housing
partners & SLO County
b.Senate Bill 4
20
Housing Continuum
64 Beds/Units
•12 Existing
•52 In queue
21
Definition: Housing designed to provide
homeless individuals and families with interim
stability and support to successfully move to and
maintain permanent housing.
Need: Interim and rapid re-housing opportunities
to facilitate the transition from homelessness or
emergency shelter to permanent housing.
Examples:
1.TMHA’s Adult Transitional Program (ATP)
2.5Cities Homeless Coalition’s Cabins For
Change
Transitional Housing
22
Welcome Home Village
a.34 Interim Housing Units in
the City of SLO
Zoning Amendments
a.Allowing Transitional Housing
by-right in most zones
Future Opportunities
a.TMHA –Transitional housing
for CARE Court referrals
b.CAPSLO –Bezos Day 1
Families Fund Grant
Programs & Policies
23
Housing Continuum
128 Shelter Beds
40 Warming
Center Beds
(40 Prado
Homeless
Services Center)
24
Definition: Temporary shelter for
unhoused individuals that does not require
participants to sign a lease or occupancy
agreement.
Need: Gateway to treatment, services,
and housing opportunities.
Example:
•40 Prado Homeless Services Center
Day Services
Housing-Focused Shelter
Program
Night-by-Night Shelter Program
Warming Center
Overnight Safe Parking
Emergency Shelters
25
Programs & Policies
40 Prado Homeless Services Center
a.Operational Funding
b.Strategic Planning & Capacity Building
Overnight Safe Parking
a.2013 Safe Parking Ordinance
b.Expansion of 40 Prado Safe Parking Program
c.Railroad Overnight Safe Parking Pilot Program
d.Rotating Overnight Safe Parking Program
Future Opportunities
a.Regional Safe Parking Model
b.Permanent Supportive and Transitional
Housing Projects
26
Housing Continuum
385
Individuals
(2022 PIT
Count)
27
Definition: Individuals and families
who lack fixed nighttime residence,
including emergency shelter or
places not meant for human
habitation
Need: 385 individuals experiencing
sheltered and unsheltered
homelessness (2022 PIT Count)
People Experiencing
Homelessness
28
Programs & Policies
Homelessness Response Strategic
Plan
a.Regional Collaboration
b.Communications
c.Data
d.Pilot Programs
e.Funding Opportunities
City-Funded Programs
a.Mobile Crisis Unit (MCU)
b.Community Action Team (CAT)
c.Community Service Officers (CSO)
29
Comments Received Regarding Student Housing Impacts
1.Cal Poly Housing Future Plan includes
increase on-campus housing
commensurate with increased enrollment,
adding 3,000 new beds in the first phase
for fall of 2026.
2.Additionally, adding 33 ownership units at
Slack and Grand for Faculty and Staff
Housing with construction slated Nov.
2023-Jan. 2026. This is the second
project for this program that currently
includes nearly 70 units at Bella Montana
at Santa Rosa St. and Highland Dr.
30
Study Session Questions
1.Are there housing types of interest to the City
Council that could be pursued in next financial
plan?
2.Are there housing types or programs not
discussed that staff should look into?
3.Are there programs listed in Attachment F that
staff should explore for future work programs for
the next financial plan cycle,in balance with
competing needs?
31
Recommendation
Receive presentation and conduct a study session on
current status of the City’s housing continuum,including
options to increase and diversify housing supply in the City.
32
Extra Slides
32
33
Table 2A
•Table 2A was repealed when the Council adopted the IHO on July 19, 2022.
•Table 2A was established to encourage projects with higher density and
smaller units sizes to be sold or rented to households that meet moderate or
lower-income standards.
•This concept did not produce affordable housing in practice.
•The feasibility analysis that the adopted IHO was based on indicated that
development would be financially feasible with the current affordable housing
percentage requirements.
34
Flexibility Density 34
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.
35
Streamlining
•The City has amended its Zoning Ordinance and permitting
practices to allow more projects to be eligible for ministerial review
and shorter processing time as follows:
•Established new section to exempt specific housing projects from
discretionary review (17.106.020.C);
•Streamlined Discretionary Review for Housing Projects less than
49 units (17.106.030); and
•Implemented E-review processes to allow digital permit and plan
submittal and review. This will improve transparency and intended
to streamline existing permitting processes.
36
Mobile Home Parks
1.No permitting authority –it lies with the State
2.City can designate where they are allowed, for SLO they are allowed in
R-1 –R-4 districts.
37
Current and Upcoming Housing Work Efforts
•Margarita Specific Plan Update –consider more housing options of all types.
(In Process -RFP on Council agenda 4/2)
•Airport Area Specific Plan Update –consider allowing mixed-use
development in the C-S and M zones where appropriate. (In Process)
•Parking Study –consider best practices that support housing production. (In
Process –Funding will be considered in the FP Supplement)
•Upper Monterey Special Focus Area –Confirm scope in pursuing an area
plan consistent with LUE Policy 8.2.2. (Fall 2024)
38
SB 684
SB 684 (Sen. Anna Caballero) –Ministerial Approval of Up to 10-
Unit Housing Projects on Small Sites effective July 1, 2024.
a.CEQA-exempt ministerial approval for up to 10 units of housing on
qualifying multifamily infill sites of no more than 5 acres and is
surrounded by qualified urban uses, without labor standards or
IHO requirements
b.Includes subdivision for a housing development project that will
result in 10 or fewer parcels and 10 or fewer units
c.High-level analysis -could impact several hundred parcels based
upon zoning, lot size, and developed parcels.
39
NOTES
1.Constraints –staircases AB 835 (Assembly Member Lee)–
Fire Marshal to Study Safety of Requirement for Apartments
to Have More than One Staircase.AB 835 requires the state
fire marshal to analyze and report to the Legislature on
standards for "single-exit,single stairway apartment houses."
The report will assess "fire and life safety"issues with respect to
the requirement to have more than one exit in apartment
buildings with three or more stories and at least two dwelling
units.Proponents of the bill contend that California's current
requirement of two exits in certain apartment buildings limits the
location and design of potential housing and contributes to
California's ongoing housing crisis.
40
Council Agenda Report Attachments
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Attachment E
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