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HomeMy WebLinkAbout03/02/1993, 4 - REVIEW OF THE DRAFT HOUSING ELEMENT. �'I�ly�l�lllllll� 1� tJ r MEETING DATE: c� o san pais osIspo .3 - A - y 3 Ilia; COUNCIL AGENDA REPORT ITEM NUMBER: FROM: rnold Jonas, Community Development Director; By: Jeff Hoo ciate Plan er SII JECT. Review of the draft Housing Element. CAO RECOMMENDATION: 1) Give direction to staff regarding changes or additions to the Housing Element; and 2) By motion, authorize the Community Development Director to submit a revised draft Housing Element incorporating Planning Commission and City Council comments to the State Department of Housing and Community Development. SITUATION State law requires all cities and counties to review and revise their housing elements based on established deadlines. San Luis Obispo was to have updated its housing element by July 1, 1992 . Procedural and policy questions dealing with the state-mandated regional housing needs program, and the need for the housing element review process to "track" the draft land use element have prevented the City from meeting that deadline. There are no direct state sanctions against local governments which have not updated their housing elements by the deadline; however cities and counties without a state-certified housing element may not be eligible for certain state housing funds. A case in point: the future of a $444 , 000 CDBG grant for acquisition of the Women's Shelter is in question because the state has required the City of San Luis Obispo to "self-certify" that its housing element meets state housing law before the funds can be used. To expedite the housing element, staff is asking the Council to review the draft housing element and the commission's comments, provide direction on any changes or additions needed, and authorize staff to forward a revised draft to the State Department of Housing and Community Development (HCD) for its mandatory 45-day review. REPORT-IN-BRIEF This report introduces the April 1992 draft housing element, major new programs, and identifies the Planning Commission's recommended changes. After the Council reviews the draft, its recommended changes will be incorporated into the revised draft which will be forwarded to HCD for mandatory review. HCD staff will review the draft for compliance with state law, and return its comments in 45 days. A City Council Hearing Draft will then be prepared and brought back to the City Council for review this summer. BACKGROUND The Housing Element was last updated in 1987 . As part of the General Plan update, city staff has prepared a draft Housing rA IN city of san _ .is oBispo WMIGN COUNCIL AGENDA REPORT Staff Report ' Page 2 Element which has been reviewed at two public workshops, and at three Planning Commission hearings in 1992. The draft incorporates policies and programs which the Planning Commission originally discussed in October 1991, and addresses recent changes to state housing law. Last Fall the City Council considered policy options regarding the state-mandated regional housing needs plan, and directed staff to work with the League of California Cities to initiate changes in the requirement, and to hold off on further hearings on the draft housing element until the draft land use element was ready for City Council hearings. ADVISORY BODY RECOMMENDATION At its May 13 , 1992 meeting, the Planning Commission completed its review of the Draft Housing Element update and recommended several changes to the text. Most of the Commission's comments were on policy and program details and implementation. The most significant revision dealt with the City's response to "regional housing need" as determined by the San Luis Obispo Area Coordinating Council (COG) . Commissioners felt that COG's housing need allocation was unrealistic, and that the updated housing element should reflect the City's current growth management policy which allows for about a 1 percent increase (about 180 dwellings) in the housing stock per. year. Major Planning Commission changes are summarized below, and detailed comments are in the attached Planning commission minutes. 1. Housing production/regional housing need. Revise housing element policies and programs for consistency with the City's land use element's one percent growth rate in the 1990s. 2. Land costs, P. 31 1. 0: Add discussion of land costs and the availability of residentially-zoned land. 3. Chs. 10. 12, 10.14: Provide more details on types and levels of urban services which the City provides. 4. Affordable housing requirement, P. 125: Clarify the terms "project" and "expansion areas. " S. Sororities and fraternities, P. 17: Include a program to provide a greek row on the Cal Poly campus, address married students and faculty housing needs, Cuesta College student needs, and prepare a map showing one-mile radius of Cal Poly. 6. Rent controls for motel conversions, P. 16: Include a program to ensure that conversions, particularly small motel conversions, have rent controls to keep them affordable. d1�� ►�IIIII�U� ► city of san 'i s oBi spo COUNCIL AGENDA REPORT Staff Report Page 3 Other Changes Since the Planning Commission completed its review, staff has. revised sections on: housing programs to include costs and implementation; availability of water resources; public services; and revised some exhibits to reflect new demographic data. DISCUSSION Council Review Strategy Detailed council review may be premature until HCD has commented on the draft housing element. HCD will focus on information required to meet state housing law, possibly resulting in the need for additional analysis, policies or programs. The revised council hearing draft would then return for council review this summer. At this point, overall council policy direction would be most appropriate to expedite the review process, particularly with regard to: ■ Regional housing needs; and ■ Major new housing policies and programs. Regional Housing Need A report discussing policy options for addressing the State's regional housing needs requirement is attached. The Planning Commission's recommendation is essentially, "policy option 3 : General Plan (1 percent growth limit) " in the attached report. Do counci.lmembers support this approach? If not, what is the preferred approach? Major Housing Policies and Programs San Luis Obispo City has been designated by the federal government as part .of the SLO-Atascadero-Paso Robles Metropolitan Area. This designation entitles the city to receive federal block grant housing funds which could be used for a wide variety of housing related programs, like low-cost loans for homebuyers, housing rehabilitation loans, infrastructure improvements to reduce housing costs, acquisition and/or development of affordable housing, and for certain public services. The draft housing element includes several new programs which reflect these new opportunities, and engages the City in a more active role in providing or maintaining affordable housing. These include: 1. Affordable Housing Incentives. Additional incentives for developer-assisted low- and moderate-cost housing. Subject to future council review and approval, these might include 3 11111 ISI uolcity of sarrW is oBispo Wfti COUNCIL AGENDA REPORT Staff Report Page 4 waivers of planning and permit fees, expedited application processing, higher density bonuses, and direct financial assistance for unmet housing needs. 2 . Inclusionary Housing. Establish an inclusionary housing program to require that a fixed percentage of new residential units be sold or rented at levels affordable to low-and moderate-income households; or as an alternative, allow payment of an "in-lieu" fee toward the development of below- market rate housing elsewhere in San Luis Obispo. 3. Housing Trust Fund. Establish a housing trust fund, with possible funding through Community Development Block Grant (CDBG) and other sources, to provide low-cost loans and grants to leverage development of affordable housing, and to provide assistance to first-time home buyers through local non-profit housing agencies. 4. Assisted Housing. City would use CDBG or other grant funds to help acquire, build, or rehabilitate assisted housing in cooperation with the Housing Authority. 5. City Regulations Amendment. Amend regulations which unreasonably increase housing costs, and revise development standards to encourage. the production of affordable housing through density bonuses, reduced minimum lot areas, or floor area limits in new residential subdivisions. 6. Downtown Housing. Determine feasibility of expanding downtown housing through rehabilitation and retrofit of downtown buildings for single-room occupancy, low-cost housing for seniors and low/moderate income households. 7. Tenant/Landlord Assistance. Re-establish a. rental housing assistance program to mediate tenant/landlord disputes and to encourage preservation of rental housing. The program could be administered through a local non-profit housing agency and funded through CDBG funds. a. Student/Community Relations. City and Cal Poly to jointly prepare and adopt a student housing plan and "good neighbor program. " Attachments: -Staff report on regional housing needs -Planning Commission minutes Enclosure: -Draft Housing Element, April 1992 ' OA city of San .Luis OBispo 5N - 2- COUNCIL AGENDA REPORT ITEM NUMBER. FROM: nold Jonas, Community Development Director; By: Jeff Hoo sociate Pla er SUBJECT: Consideration of policy options regarding regional housing needs for San Luis Obispo. CAO RECO10 ENDATION: Evaluate the regional housing need policy options and by motion, provide direction to staff regarding the preferred policy to incorporate into the City's draft housing element update. REPORT-IN-BRIEF The City is at a "crossroads" in the preparation of its draft housing element update. The Planning Commission has completed its review, and recommended changes to the element to reflect the 1 percent growth policy incorporated into both the current and draft update land use elements. This recommendation conflicts with state requirements that the City meet "regional housing needs" in its housing element. Compliance with this requirement is necessary to assure state acceptance of the draft housing element as being in compliance with state law. The report concludes that the Commission's recommendation and the State's requirements cannot be reconciled, and that the City Council should provide direction as to the preferred growth strategy. This approach would then be included in the City Council hearing draft of the housing element. SITUATION At its May 13 , 1992 meeting, the Planning Commission completed its review of the Draft Housing Element update and directed staff to revise the draft prior to City Council review. Most of the Commission's comments were on the housing policy and program details and implementation. The Commission's most significant revision dealt with the City' s response to "regional housing need" as determined by the San Luis Obispo Area Coordinating Council (COG) . Commissioners felt that COG's housing need allocation was unrealistic, and that the updated housing element should reflect the City's current growth management policy -- allowing a 1 percent increase (about 180 dwellings) in the housing stock per year. This policy direction is not consistent with State-approved regional housing needs, and may conflict with state housing law. Before the Commission's changes are incorporated into a City Council hearing draft, and with the Commission' s understanding and agreement, staff is asking the Council to provide policy direction on how to reconcile state regional housing need requirements with City growth policies. This report discusses the regional housing need issue and presents policy options for Council consideration. HCD staff will review the draft element for compliance with State law, and return its comments in 45 days. ` MEETING GATE: 11161 I111111$1111111 city of San Luis OBISpo ITEM NUMBER: COUNCIL AGENDA REPORT Regional Housing Need Page 2 Once the Council identifies its policy preference, the City Council hearing draft housing element will be prepared and scheduled for Council hearings, and forwarded to the California Department of Housing and Community Development (HCD) for their mandatory review prior to Council action. Regional Housing Need Like many California communities, San Luis Obispo is required to update its adopted Housing Element regularly (status report on other Central Coast cities attached) . As part of the updating process, state law requires local governments to incorporate specific housing production targets -- called "regional housing need" -- into their housing elements. Regional councils of government are delegated the authority to determine regional housing needs for each city and county following state guidelines. HCD then reviews and approves the regional housing needs plans to determine compliance with state housing goals. On November 6, 1991, COG adopted a Regional Housing Plan calling for the construction of 19,880 new housing units in San Luis Obispo County by July 1997, a 22 percent increase in the number of existing units. Based on the methodology used, San Luis Obispo City is charged with providing 5, 128 new units by July 1997 , a 26 percent increase in the City's housing stock -- and over one quarter of the County's total projected housing need. After careful review, staff determined that the allocation for San Luis Obispo is based on inaccurate assumptions about City/County economic trends and population growth. Using methods similar to those used by COG and the State, and using what staff feels are more appropriate growth trends, city staff estimated that the City of San Luis Obispo's would need approximately 3 ,700 new housing units by July 1997 to meet both city and regional housing needs. The City's Housing Element update includes new policies and programs to expand the City's affordable housing supply. To put the Area Coordinating Council's numbers in perspective, however, the City would need to allow the construction of about 1, 000 dwelling units annually for the next five years to meet the adopted target. The City has never achieved this rate of housing construction --not even when housing construction has been most active. We reached a peak during the mid-1980s of about 800 units in one year. y- ` MEETING DATE: city of San Luis osispo COUNCIL AGENDA REPORT ITEM NUMBER: • Regional Housing Need Page 3 Previous "Fair Share'* Requirement This isn't the first time San Luis Obispo has addressed state- mandated housing targets. In 1984, HCD prepared a "housing needs plan" for San Luis Obispo County and all the cities within the County. During the 1987 housing element update, HCD required San Luis Obispo to include a regional housing need allocation of 10630 new dwellings between 1984 and 1990. During this period, the City gained new 2,690 dwellings -- substantially more than the HCD's regional housing need figure. The element's target numbers for new dwellings for low and very low income households, however, were not achieved. State Housing Law Changes In 1990, then Governor Deukmejian signed into law SB 2274 (Bergeson) . In effect, this law put "teeth" into the State's regional housing need requirement by revising the process of allocating local shares of regional housing need, and by requiring that HCD review housing elements to assure compliance with state- mandated housing needs prior to adoption (State Housing Law attached) . Now under state law, local governments no longer had the right to adopt a "local revision" to its regional need allocation. Instead, cities and counties could propose revisions to COG. The "catch": if COG accepts the revision, it must ensure that the total regional housing need is remains the same. Locally, that would mean that the portion of regional housing needs assigned to but not accepted by San Luis Obispo City must then be allocated to some other jurisdiction in the County. According to planning directors of the various cities in the County, these cities may be unable to meet their regional need allocation, and they are not willing to accept a portion of the City's allocated need. The County is in a similar position. COG's Action State law requires HCD to determine the regional housing needs for each COG jurisdiction, in this case, the County of San Luis Obispo. Using population growth estimates prepared by the California Department of Finance, HCD determined San Luis Obispo County' s regional housing need and notified the County in June 1990. COG staff attempted to lower the State's growth estimates, citing resource constraints to growth due to sewer and water. In March 1991, HCD agreed to lower its population growth estimates -- mainly in response to newly released 1990 Census data. MEETING DATE: �������►►�uulllil�lu �l�lll city of San Luis OBIspo ITEM NUMBER: COUNCIL AGENDA REPORT Regional Housing Need Page 4 Originally, HCD estimated that the County's total population would increase from 221,703 to 281, 100 persons between January 1, 1990 and July 1, 1997 -- an average annual increase of 3 . 6 percent. The revised, final estimate is for the County's population to grow from 221,703 to 267,600 persons between April 1, 1990 and July 1, 1997 - - an average annual increase of 3.2 percent. City Appeal of Regional Housing Needs In August 1991, City staff reviewed COG' s determination and concluded that it did not accurately reflect the City's housing need or capability to support additional growth. In September 1991, the Planning Commission discussed the regional housing need issue, and supported staff's contention that COG's numbers were not achievable. Commissioners directed staff to prepare an appeal of COG's determination as part of the housing element update work. In January 1992, the Commission reviewed staff' s proposed revision to COG's determination, and concurred with the approach. The appeal was submitted to COG staff in January, including an analysis of COG' s numbers and methods on which the needs assessment is based. COG' s regional housing need determination was based primarily on employment growth projections and availability of water resources. On April 8, 1992 COG denied the City's appeal, finding that the City's proposed revision was not justified because: 1) the regional housing needs were developed following state law and accepted planning methods; 2) if employment projections on which the regional needs are based were not achieved, the City still has unmet need for housing for existing local employees; and 3) the City' s revision would require reallocating the difference in housing need to other jurisdictions in the County, and evidence indicates that these jurisdictions are not able to accommodate the additional housing. The main factors that COG used to determine the City's regional housing need are summarized below. Employment Growth The 1980s were years of rapid growth for much of San Luis Obispo County. According to COG figures, San Luis Obispo and surrounding areas showed a 28 percent increase in the number of jobs between 1980 and 1987. As noted in COG's study, one-half of the County's jobs were in San Luis Obispo City. To arrive at housing need figures, COG's plan assumes that a robust 18 percent rate of job growth will prevail through the planning period. �'O ' MEETING DATE: city of San Luis OBlspo COUNCIL AGENDA REPORT ITEM NUMBER: Regional Housing Need Page 5 The rate of job growth in the "central county" area during the 1990s is likely to be much less than the 28 percent experienced during the economic boom days of the 1980s. These job growth figures included large employment generators which are not likely to continue, at least in the foreseeable future, such as construction of P.G. & E. 's Diablo Canyon nuclear power. plant, major enrollment and facility expansions at Cal Poly and Cuesta College, and growth in State and County employment. The Diablo Canyon facility is built out, and enrollment at Cal Poly and Cuesta College have stabilized, and will probably decline due to budget constraints. A lack of water, coupled with recessionary economic factors state wide are likely to dampen public and private sector employment growth for the period covered by this plan. The plan notes that "San Luis Obispo's role as a regional employment center is expected to continue, although employment growth is expected to be deflected to other communities due to water and sewage disposal service limitations in San Luis Obispo. " Between January 1989 and . January 1990, job growth in SLO County dropped to about 1 percent. According to State Employment Development Department (EDD) staff, that employment growth rate is expected to last at least through 1992 . Yet COG's plan assumes an overall job growth rate of 18 percent between January 1991 and July 1997, (based on a 1990 estimate of 37,317 jobs in the "central county" area) , despite reduced economic expectations for the early 1990s. Based on EDD data and economic trends, a more realistic estimate of 10 percent overall job growth should be used for the planning period. Revised calculations for additional housing need based on employment trends are: 10% job growth from 1/1/91 through 7/1/97 equals 0. 10 (37, 371) 3,332 new jobs; substituting, 3, 332 new jobs/ (1.2 employed person per household x 0. 95 occupancy rate) = 2, 923 new dwellings. The city's average number of employed persons per household is 1.2, not 1.1 as used in COG's analysis. Hence, the base housing need for the City of San Luis Obispo (January 1991 through July 1997) should equal about 2,923 housing units. To allow for housing demolitions and conversions and a 5 percent vacancy rate, this figure is increased by 8 percent to an adjusted need of 3,282 new housing units by July 1997. -9 • MEETING DATE: llblU city of San Luis OBISpo ITEM NUMBER: COUNCIL AGENDA REPORT Regional Housing Need Page 6 Water Resources Since COG prepared its housing need estimates, the time frame for development of new City water sources has changed. COG assumed that the Salinas Reservoir expansion would provide 1, 350 acre feet in January 1994, Nacimiento Reservoir water in 1995, and State Water Project coastal branch water would be available in 1996. Due to the actual time needed for engineering and environmental studies, design and construction, the earliest any of these new sources will be available, optimistically, is July 1995 (Salinas Reservoir) , at least 1 1/2 years later than anticipated. COG assumes 41400 new units could be served with water during the planning period; however using the most accurate estimates available, the most dwelling units which could be served based on anticipated water supplies between 1992 and July 1997 is 2,900 units. According to state law, availability of public services like water, sewers, police and fire services limits growth only in terms of timing. Thus, the regional housing allocation plan can consider the time needed to provide the necessary services to support growth in setting housing allocations. The law does not allow cities and counties to set permanent growth limits based on limited water or sewer facilities. Summary Using COG's methods and substituting more realistic assumptions about demand, job growth, available land, and public services, the City's base share of regional housing need is 1, 170 to 2, 923 new housing units between January 1991 and July 1997 . To allow for a 5 percent vacancy factor and demolitions, an additional 234 dwelling units is added to the base housing need, for a total need of 3, 282 new housing units. For reasons cited above, COG's total projected housing need for SLO County is lower than that projected by the State Department of Housing and Community Development. So a portion of the difference between COG's projected regional need and the State' s projected need was allocated to each city and to the unincorporated area based on the amount of growth forecast for each. So to be consistent with COG's method, the City's regional need allocation was adjusted accordingly: 3,282 units (projected City need) + 451 units (HCD added need) revised regional housing need of 31733 dwelling units. MEETING OATS: city of san Luis ogispo COUNCIL AGENDA REPORT ITEM NUMBER: Regional Housing Need Page 7 To produce enough housing to meet this revised need, the City would need to accommodate 575 new dwellings per year between January 1, 1991 and July 1, 1997. Even if the City did tailor its policies and programs to allow this rate of housing production, it still might not be achieved. It could be achieved only if: ■ City water supply improvements proceed as planned, and necessary public services (water, sewers, roads, schools) are available to meet the needs of current residents plus those of new residents; ■ the City receives development applications proposing at least this number of new housing units; ■ City policies are amended to allow growth to exceed the 1 percent level identified in the General Plan and proposed Land Use Element update; and ■ the City annexes land within its urban reserve to allow room to accommodate this level of residential growth. Consequences of Not Meeting Regional Housing Needs State law requires the City to include policies and programs in its Housing Element which would allow the City to achieve its regional housing need, but it does not hold the City responsible for actually producing this housing. If the City makes a "good faith" effort to allow this much housing and provide the necessary policies, programs, properly zoned land, and resources but the housing is not built, it would be deemed to be in compliance with state housing law, according to HCD officials. For example, if the City is not able to secure additional water during the planning period from 1992 to 1997, HCD would recognize that situation as a legitimate reason for not achieving COG's regional housing need. There is, however, a likelihood that the state will try to "carry forward" the unmet housing need into the City's future housing programs. If the City does not reflect COG's regional housing need numbers in the pending Housing and Land Use Element updates, it is likely that HCD will find the City's Housing Element to be not in compliance with state housing law (Article 10. 6. , Ch. 65580 et.seq. , Calif. Govt. Code) , according to Gary Collord, State Department of Housing and Community Development (June 10, 1992) . This action has at least two possible ramifications: 1) As a result of developer or citizen legal action, the adequacy MEETING DATE: ��� �o�i�►illlll����' l�Ulli city o� San lues OBISp0 COUNCIL AGENDA REPORT STEM NUMBER: Regional Housing Need Page 8 of the City's General Plan could be challenged. Courts have restricted cities' ability to issue construction permits where it's been determined that their general plans were invalid. 2) The City's eligibility to compete for and receive housing grants through HCD would be reduced. This should not, however, affect the City's eligibility to receive federal housing block grants for which the City is now entitled due to its recent classification as an "urbanized area. " POLICY ALTERNATIVES The City of San Luis Obispo does not actually construct dwellings. However, through its provision of services, zoning regulations and growth management programs, it influences housing production. By establishing housing goals, the City is stating that it will enable housing construction to occur at established rates. Staff has identified three policy alternatives for dealing with the conflict between city policy and state-mandated housing needs. Only alternative 1 would meet the State's requirements. 1. COG's Allocation: Set housing production goals consistent with the City' s regional housing need as determined by COG and approved by the State. 2. Moderate Growth: Set housing production goals which are lower than COG's regional housing need, and linked to the availability of public services and moderate economic growth expectations. 3. Continued 1% Growth Limit: Set rousing element goals and policies based on the General Plan' s 1 percent. Table 1 on ' the following page compares the housing rates and construction levels associated with the three policy options described above. POLICY OPTION 1: COG's Allocation Description: The City would incorporate into its housing element the housing goals prepared by the San Luis Obispo Council of Governments and approved by HCD. The City would enable the construction of an average of 789 dwellings per year between January 1991 and July 1997. MEETING DATE: I����� ►W�IIIII�I��' �llll city of san Luis oBispo ITEM NUMBER: COUNCIL AGENDA REPORT Regional Housing Need Page 9 1. Consistency With the General Plan This policy option conflicts with the current and proposed Land Use Elements because it would allow annual average growth rates to reach 4.3 percent, while the General Plan limits the annual growth rate to 1% or less. The 1 percent growth rate is not linked to any specific resource or service limitation, but reflects previous Council judgements about a sustainable growth rate which allows the orderly provision of facilities and services for new development, and the assimilation of new residents and physical changes into the community. In terms of the City's ultimate size, however, this approach is consistent with the draft land use element. This document anticipates the addition of about 5, 100 new units between 1992 and 2017. In effect, by meeting COG's regional housing need, the City would reach its ultimate size as much as 20 years sooner than anticipated. Table 1 Alternative Policies for Meeting Regional Housing Needs (Units Produced, January 1991 - July 1997) Policy Options Total Units . Units/Year COG Allocation 5, 128 789 Moderate Growth (1) 31733 575 General Plan (2) 1,290 184 (1% Annual Rate) Production History 2 , 809 468 (1984 - 1990) Notes: (1) This policy option was incorporated into the draft Housing Element considered by the Planning Commission i May, x992. (2) The Planning Commission has recommended that the Cit target its housing goals to be consistent with the Lan Use Element of the General Plan (1% annual growth rate) . MEETING DATE:' city o� San Luis OBISpo ITEM NUMBER: COUNCIL AGENDA REPORT Regional Housing Need Page 10 2. Resource/service availability and environmental impact The proposed regional housing need for the City of 5, 128 new dwellings between January 1991 and July 1997 is not achievable because adequate water and sewer resources are not available during the planning period to support this rate of growth, and because the increased population in so short a time span would result in significant, unmitigatable impacts to traffic, air quality, police and fire services, and schools. The City's draft Land Use Element indicates that 5, 100 new dwellings will be added gradually at about 200 units per year between 1992 and 2017, accommodating a total City population of about 55, 000 persons. Air Quality The levels for ozone and particulate matter in this area currently exceed acceptable standards, and emissions of these pollutants must be reduced by 5% per year until State standards are achieved. Adding 5, 128 dwellings will significantly increase traffic levels and mobile emissions, and delay if not preclude the City's attainment of State air quality standards and compliance with the 1988 Clean Air Act. Traffic The draft Circulation Element proposes various programs and traffic improvements during the next 30 years and assumes that in-city traffic volumes will increase at an average rate of slightly over 1 percent per year. If the City population grows faster than 1 percent per year, planned traffic improvements may not be adequate to maintain safe, efficient traffic flow during peak hours. To meet the regional housing need, the City would produce new housing at an average rate of about six percent per year between July 1992 and July 1997. Police and Fire Services As the City's population grows, the need for police and fire services grows at a disproportionately faster rate. Police staffing in San Luis Obispo is already below the state average, as measured by the number of sworn officers to resident population. Currently, the City's ratio of sworn officers to population is 1. 33 per 1,000 resident population, below the state average of 1.8 per 11000. The increased need for staff, equipment, and facilities will be met partially through development impact fees and environmental impact mitigation fees imposed at the time of future development. Added costs for these services will, in part, be paid MEETING DATE: Al city of San IDIS OBISpo COUNCIL AGENDA REPORT ITE"' NUMBER: Regional Housing Need Page 11 by city residents through increased fees or taxes. Sewer Sewer treatment plant upgrades now underway will expand the City's sewer treatment capacity to about 5.4 million gallons per day (average dry weather flow) , or five percent. This will accommodate a population increase of . 4, 300 persons through the year 2000 (Wastewater Treatment Plant Final EIR, March 1990) . The plant will be operational by Fall 1992, and is planned to accommodate an increase of up to 3 , 000 persons, or about 1250 new dwellings by 1997. Water Engineering and environmental studies are underway to secure additional water supplies. At the earliest, additional water supplies are not expected to be available to support new development until 1995 with the enlargement of the Salinas Reservoir. This project is expected to add about 1, 600 acre feet for residential use. At a use rate of 0.43 acre foot per dwelling per year, this could support development of 3 , 700 new dwellings. Between July 1992 and January 1995, housing growth would be-limited by lack of water to the rate of development which could be accommodated by retrofitting, or probably somewhat less than 1 percent per year (180 to 200 dwellings per year, compounded) . If the City were successful in securing all of the additional water sources under consideration, it could make available up to 51970 acre feet of water to meet the needs of new residents -- enough for about 13 , 000 new dwellings. Timing is the main water constraint in achieving the COG' s numbers. Beginning in January 1995, housing production could increase; however, to meet the City's regional housing need of 5, 100 dwellings by July 1997, 4, 443 dwellings would have to be built in two and one-half years -- a rate of almost 1500 units per year or 148 dwellings per month. The City has never achieved this rate of growth, nor is it likely that this rate could be achieved even if the environmental impacts could be mitigated, and the resources and policies were in place to allow such growth. schools San Luis Coastal Unified School District's current enrollment is 7, 800 (includes eight schools outside SLO City) . According to District studies, new residential development generates 0.65 MEETING DATE: tlIIII�IAh��IIIIIIIIIIII�IIIIIII City of SAn LUIS OBISPO• ITEM NUMBER COUNCIL AGENDA REPORT Regional Housing Need Page 12 schoolchild per dwelling. COG's regional housing need translates into about 3, 300 added students in five years -- an increase of. about 600 students per year and an increase of over 40 percent in local school enrollment (50 percent or more in SLO City) . In recent years, the District has grown at about 80 students per year. Due to budget constraints and current overcrowding at the elementary school level, 5, 100 new dwellings would have serious adverse consequences for school staffing, facilities, and programs in the City alone, not counting additional problems due to enrollment growth in areas outside the City also served by the District. 3. Availability of Land Resources The City currently has enough land within its boundaries to allow construction of about 1700 additional dwellings (includes added development potential from mixed use sites, redevelopment and intensification) . When expansion areas listed in the draft land use element are included, an additional 3 , 245 dwellings could be accommodated, for a total added residential capacity of 4 ,950 dwellings -- less than COG' s need figure of 5, 128 dwellings. To increase residential capacity, the City would need to consider additional residential annexations; probably near the City's western and southern edges. 4. Impact on Community Expectations This growth increase would represent a major departure from citizen preferences on community growth, as expressed in the Land Use Element opinion survey and recent advisory elections. Although it is unlikely that this number of new units would actually be built, the policy change itself would probably not be consistent with the majority of citizens' views as to San Luis Obispo's planned growth character. S. Economic Impact City costs to provide additional services should be partially offset through permit and user fees, added local sales tax revenues, and other revenues. Generally, housing (unlike retail commercial uses, for example) tends to cost local governments more to provide services than it generates in taxes and fees. Hence, this rate of residential growth is likely to have an adverse fiscal impact on the City. The increased rate of housing construction could be expected to hold city housing costs down and increase vacancy rates, thus assisting low and moderate-income homebuyers who wish to live in San Luis Obispo. -/lo �, wi un ai nl MEETING DATE: „�����II�d �V ��II► city Of San tins OBISPO GftZa COUNCIL AGENDA REPORT ITEM NUMBER; Regional Housing Need Page 13 6. Potential For Litigation This approach would allow the City to meet state housing laws, and reduce the risk of litigation over the validity of the City's general plan due to lack of HCD acceptance of the Housing Element. There may be some risk, however, of developers using litigation to force the City to allow residential development to achieve this number of new units even if water were not available to serve the new residents. POLICY OPTION 2: Moderate Growth This approach would set a growth rate intermediate between COG's numbers and the City's current and planned 1 percent growth limit during the 1990s. It would set the City's regional housing need at 3,733 dwellings, and would allow an average annual growth rate of up to 570 units per year, or 3.2 percent. By comparison, the City's annual average housing production during the period from 1984 to 1990 was about 470 units per year, or between 2 .5 and 3 percent. This is the approach which the current draft housing element incorporates. 1. Consistency With the General Plan This option would conflict with the current and proposed Land Use Elements because it would allow annual average growth rates slightly exceeding 3 percent, while the General Plan limits the annual growth rate to 1 percent or less. At this rate, it is estimated that the City would achieve buildout about ten years sooner than anticipated. 2. Resource/service availability and environmental impact The revised regional housing need of 3 , 733 new dwellings between January 1991 and July 1997 is achievable if the planned water and sewer facilities are completed and available during the planning period. For example, Utilities Department staff anticipate that the Salinas Reservoir Expansion would be completed by the end of 1995. Once completed, the modified reservoir would allow storage to supply an additional 1, 600 acre feet for new housing. This would be enough to accommodate about 3 ,700 new dwellings. However since the additional water supplies will not be available until the and of 1995 at the earliest, it is not likely that even the revised housing need could be achieved by July 1997 . Environmental impacts of this option would be similar to, but less severe than those listed for Option 1. Since the impacts of growth are spread over a longer time period than in Option 1, their short-term effects are MEETING DATE: ���i�►�� nifiiilll ��jlj city o� san tins 0131SPO.'vt: ITEM NUMBER: COUNCIL AGENDA REPORT Regional Housing Need Page 14 more easily mitigated and absorbed by the community. 3. Impact on Community Expectations Like Option 1, this represents a departure from city policies and citizen preferences on community growth. Although it is unlikely that even this revised number of new units would actually be built, and the growth rate would be less "dramatic" than with option 1, the policy change itself would probably not be consistent with the majority of citizens ' views as to San Luis Obispo' s planned growth character. Those wishing to buy housing in San Luis Obispo would find a wider range of housing types and prices available under this approach than would otherwise be likely if the City maintained its one percent growth rate. 4. Potential For Litigation According to HCD officials, this approach would not meet state housing law, even though the City might be "procedurally in compliance" by following all other state requirements for housing elements. In short, the City must include the COG numbers, or the housing element will not be accepted by HCD to be "in compliance" with state housing law. What does this mean? Again, according to HCD's own staff, it doesn't mean alot. San Luis Obispo's current housing element has been certified to be in compliance; however of the 509 California cities and counties required to have housing elements, only 107 localities had adopted housing elements which HCD found to be in substantial compliance with housing element law. Cities and counties who do not comply with state housing law are at somewhat of a disadvantage when vying for highly competitive state housing grants. Otherwise, there are currently no penalties or enforcement tools available to the state to force cities and counties to comply with housing law. There have been only a few instances of California cities being sued by third parties (ie. developers) for not having a certified housing element, and according to State officials, in those instances the cities prevailed. POLICY OPTION 3• General Plan (1 percent growth limit) Under this option, the City would accommodate construction of up to about 180 dwellings per year. This!,is the City's current policy and it would continue under policies . now contained in the draft land use element. This is the Planning Commission's recommended option. The City has already planned to accommodate this rate of growth through its General Plan, so resources and urban services 'l0 IItlI� �WIIIIII`I�I��bUlC�"'JJ"r�/ or r san lugs oBispo MEETING DATE: ITEM NUMBER: COUNCIL AGENDA REPORT Regional Housing Need Page 15 are not expected to prevent the City from achieving this rate of housing production. Environmental impacts are being addressed as part of the current land use element update; however staff does not anticipate significant, unmitigatable adverse impacts resulting from this growth rate. By holding to the one percent growth rate, the City's ability to promote a range of housing types and prices is limited more than under Options 1 and 2 . Staff's Recommended Policy Approach Staff supports the Planning Commission's recommendation to maintain the 1 percent growth rate; however staff supports additional provisions to exempt affordable housing (which meets city affordability standards) from the 1 percent limit. This would allow additional flexibility to meet a demonstrated need for affordable housing in San Luis Obispo, while holding the community's overall growth rate to levels anticipated by the General Plan. The draft Housing Element would need to address the details of how this exception to growth limits would be implemented. C. ALTERNATIVES In addition to the three policy alternatives above, the City Council could: 1. Further revise the regional housing need figure downward to reflect changing employment projections in the San Luis Obispo area. This would probably result in an annual average growth rate of between 1 and 2.5 percent. Although this approach still wouldn't meet state law, it would allow the production of more housing than would otherwise be possible, and come closer to meeting regional housing needs. 2. Consider revising growth management and Land use policies to exempt below-market priced housing from any growth management regulations. RECO1+MMMATION Evaluate the regional housing need policy options and by motion, provide direction to staff regarding the preferred policy to. address regional housing need, and direct staff to incorporate this policy approach into the draft housing element. Attachments: P.C. Minutes May 13 , 1992 Page 4 The motion passed. Cindy Clemens explained that if t City was pursuing an enforcement action against the appli ant , the City would have to prove the use was illegal . Howeve , because the applicant is asking the City to grant him a permit , the applicant had the burden of proving to the Cit at the previous use was legal . DISCUSSION ITEMS ----------------------------------------------------------------- Item 2 . Draft Housina Element. The commission will continue to review and comment on the draft Housing Element. ----------------------------------------------------------------- Jeff Hook presented the staff report and explained the Commission started reviewing the Draft Housing Element on April 27, 1992, at a meeting focusing on regional housing needs. He said the Commission had directed staff to use a one percent growth factor to establish city housing needs because the local Council of Governments ' (COG'S) determination of housing needs was considered too high to achieve due to resource limits. He asked for comments on the goals, policies, and programs of the Draft Housing Element , with the Commission' s focus on consistency with city needs and priorities. He said the City Council would see the draft after the Commission finished its review, and suggested that the Commission take public comment at this meeting. Mr. Hook explained the State deadline for adoption of a Housing Element is July 1 , 1992 , and although the Housing Element is not expected to be adopted by that date, staff hopes that the Commission will conclude its review by the end of June so that the draft can be submitted to the State as soon as possible. He said San Luis Obispo is the closest to meeting the time deadline of all the major cities between Monterey and Santa Barbara. However, he said the other cities are either stating they intend to grow at the rate set by the State, or are including the growth rate set by the State in their housing elements but adding statements. that the growth rate will probably not be met . He _ said he has been in contact with Ernie Silva, a lobbyist for the League of California Cities. He explained developers, non-profit housing agencies, governmental agencies, architects , and planners were invited to two public meetings for input on the draft. Commr. Gurnee felt the document was well organized. He expressed concern about sanctions from the State hitting home and mentioned a city in Northern California that is facing losing Park and Recreation funding from the State. He believed contacting the League of Cities was an excellent place to start , especially in October when the League meets regularly. He agreed that not enough was being done to meet housing needs , but felt the State' s numbers were unrealistic and impossible to achieve. y-aa P.C. Minutes May 13, 1992 Page 5 Commr. Williams said she did not want to wait until October and suggested that State representatives from the State Housing and Community Development Department and legislative leaders be asked to come to San Luis Obispo for a community forum. She said if they refused to come to San Luis Obispo, the Commission, along with some concerned citizens, should go to see them. Commr. Settle believed that a rejection of COG' s regional housing need determination by San Luis Obispo would not affect possible Federal block grant funding. He said he knew of other cities that have said to comply with the rules from this State agency will violate rules of other State agencies and the matter will end up in litigation. He expressed concern that State interference with the Housing Element was only the beginning and the City Planning Commission could become an agency of the State unless a pro-active approach is taken now through the League of Cities. Commr. Cross said Kathy Krustwell , from the State Housing and Community Development Department said she would be willing to come to San Luis Obispo. He expressed concern that a private citizen could sue the City in court , and the City would be in trouble if the Housing Element was not in conformance. Commr. Peterson agreed with Commr. Williams that action needs to get underway immediately. Chairman Karleskint opened the public hearing. Carla Sanders, 660 Oakridge Drive, said her main concern was that the housing element draft could change San Luis Obispo ' s- long term growth management planning. She said the State quota of 4,000 is five times the community' s stated goal . She said she had called Mr. Maddy, California State Community Development , and was referred to a Bill Murphy, head of the Public Policy Division, and was told state funds are contingent upon cities accepting state housing needs assessments. She said the State does not consider resources such as water for cities to meet the reasonable share of growth. She said Dana Lilly, a planner with San Luis Obispo County, told her that San Luis Obispo was designated an urban place last year by the Census Bureau, which will make it eligible for federal entitlement block grants. She quoted the follow response from Mr. Lilly, "If San Luis Obispo is . entitled to federal block grants, there is no longer a linkage between block grants and the housing element . It is only a problem if you get small city block grant funds. There is no linkage if a city receives federal entitlement block grants . " When she asked about the women' s shelter and the homeless shelter funds being tied to the housing element , she said she was also told, "The housing element is not a requirement for award of ESP funds because the emergency shelter is not a housing program -- it is emergency intervention. There is an attempt to keep it #—o� P.C. Minutes "` May 13, 1992 . . Page 6 t from regular housing programs. " She made the following comments on goals: on Page 3, third paragraph from the bottom she felt it would be important to state that existing urban services should be maintained, not just adequate services so that it would be clearly stated that San Luis Obispo does not want a decrease in the level of services. She suggested the following wording: "The present level of urban services and air quality will be maintained or improved for the City' s residents. Urban services include water, sewer, schools, police, fire, and road services . " She suggested that the same wording be used on Page 6. She expressed concern about mansionization, large homes going into existing neighborhoods, and asked if they were in the housing element . Jeff Hook said those types of issues were discussed under neighborhood plans and community relations such as on Pages 16 & 18. Carla Sanders felt it would be appropriate to have that type of issue addressed in the General Plan or Land Use Element, rather than relying on neighbors to object to developments . Commr. Settle felt that Ms . Sanders suggestion that current levels of services be mentioned in the housing element draft was important. Arnold Jonas said the State' s position is that restriction in services are only a matter of time. For example, he explained _ that if a city' s only scarce resource was water, the State would say it was the City' s responsibility to pursue other sources of water. Jeff Hook suggested that clarification of existing services in the Land Use Element, such as emergency response time in July 1992, could also be incorporated into the draft . He said that the one percent growth rate is primarily based on a quantitive judgment the community has made about its desired character. In- answer- to a question by Commr. Williams, Jeff Hook explained .that the State wants to see programs in place for cities to achieve the regional housing needs, but if market needs change and those homes are not built, the State cannot .penalize cities . do"mr. Gurnee said the housing need requirements originated under previous Governor Jerry Brown to counteract a city' s ability to control growth, at the expense of other communities. He felt the State' s message was not bad, but he believed the numbers set by the State were unreasonable. He warned that sanctions are becoming real in the Bay area. He expressed concern that 28 of the 37 policies in the draft depend on General Fund financing. He supported the idea of asking the council to invite or demand the state representatives to explain the requests and possible ly'oa P.C. Minutes May 13, 1992 Page 7 sanctions. He said providing adequate housing cannot be dismissed simply because the City says it cannot do it . In answer to a question by Commr. Settle, Jeff Hook said the 37 programs in the draft are not prioritized. COMMENTS ON DOCUMENT Page 3, No. 1 .0: Commr. Williams suggested adding land costs and the availability of residentially zoned land. Jeff Hook suggested that Commissioners not become involved in the detailed wording of the document , but rather focus comments on policies and programs . He added that staff would welcome notes from Commissioners requesting items to be added or deleted from the document . Page 4, 10 . 2: Commr. Gurnee expressed concern that some of the policies require affordable housing rather than encouraging it by Incentives . Jeff Hook explained that staff tried to present a balanced approach because there is a presumption that the City will require some affordable housing with certain types of new developments . He said if the Commission feels that the City should not have mandatory affordable housing provisions , that direction should be given to staff. Commr. Settle expressed concern that the elimination of mandatory affordable housing could make other City policies irrelevant and eliminate an opportunity for municipal government to require affordable housing as part of a major development . Commr. Karleskint agreed with Commr. Settle. Commr. Gurnee said he disagreed with Commrs . Settle and Karleskint . He favored eliminating the requirement for affordable housing. 10. 12: Commrs. Hoffman and Karleskint felt that more detail was need to clarify the types of services it is important to provide such as schools and fire stations . Commr. Hoffman said those same restrictions should be discussed in 10 . 14 . In answer to a question by Commr. Cross, Jeff Hook said low and very low income have been lumped together as low income. In answer to a question by Commr. Williams, Jeff Hook said Mr. French had submitted a letter suggesting that duplexes be allowed on corner lots to provide affordable housing. He explained that although the idea has not yet been researched, it would be considered. �-oZ3 P.C. Minutes ` May 13, 1992 Page 8 8, Commr. Gurnee suggested that a policy stating the City will work with the San Luis Obispo Area Coordinating Council (COG) and keep up to date on State requirements should be added under housing supply policies. Commr. Settle expressed concern that other communities see San Luis Obispo as part of the problem. He said he had no objection to working with other cities, but did not believe San Luis Obispo should be linked to other communities' policies. 10. 14: Commr. Hoffman questioned why a city housing element should address meeting regional county needs as referred to in 10. 14. Commr. Cross suggested including manufactured housing and mobile homes parks as possible affordable housing alternatives. Jeff Hook said it would be appropriate to include it as a goal if the Commission agreed. Commrs. Cross and Hoffman disagreed with the statement about balancing housing supply under housing demand. Commr. Hoffman said balance needs to be defined because San Luis Obispo is a job . center for the County. .-. Jeff Hook explained that that issue was discussed later in the :document and suggested the statement be reworded to state that the City will prevent a further imbalance between jobs and '- -housing, by linking housing increases with job growth. The Commission discussed the reference to a joint land use and housing element between the City and the county. Carla Sanders said Dana Lilly told her the City could decide whether to keep its federal entitlement block grants or share the wealth with the county and other -cit'ies through joint agreements, which would entitle the county and other cities to federal entitlement block grant funds. Commr. Hoffman said it- would be helpful if the Housing Program titles were the same titles as those for Housing Goals. PROGRAMS - Exclusionary Housing, Appendix E, Page 125: Commr. Hoffman asked what constituted a project . Jeff Hook said it covered new units and new commercial space. He said it could cover so called "granny units . " Commr. Hoffman said that definition was not clear and could be construed to mean any addition to a current building. He -.y P.C. Minutes May 13 , 1992 Page 9 . expressed concern a 5 percent tax would be required for building a granny unit inside the City and a 15 percent in-lieu housing fee would be required for the same granny unit in an expansion area of the City. Commr. Hoffman asked that the term expansion areas be defined. Commr. Gurnee said the 15 percent in-lieu fee would discourage annexation and encourage development in the county. Commr. Karieskint also felt the housing impact fees were high. Jeff Hook said it maybe appropriate for the City to exempt some projects . For example, he said the City could exempt commercial project under 5,000 square feet , residential developments under 10 units , and affordable housing projects from providing housing or paying the in-lieu fee. He said at this point the fees apply to all new developments, commercial and residential . Carla Sanders said at a City council meeting she attended, Suzanne Lampert , author of a consultant report on affordable housing strategies, presented a chart showing possible fee schedules. Jeff Hook said on April 15, the City Council discussed affordable housing and the Mundie Report, which establishes four categories for residential development in the City. The categories allow the option of paying a set affordable housing fee or constructing a percentage of low and moderate income housing which would reduce the affordable housing fee. He began to discuss the affordable housing fees required for commercial development . Commr. Gurnee stepped down due to a conflict of interest and left the meeting. Jeff Hook explained that commercial development creates jobs which in turn increases the demand for housing. He said between 1986 and 1990 , the requirement being discussed would have generated 7 . 1 million dollars for affordable housing. Commr. Williams expressed concern that the source of funding for most projects was listed as coming from. the City's general fund. Jeff Hook said that it is hoped that in-lieu fees held in a trust fund and entitlement funds could also be used. He explained that the rationale behind listing general fund money as the main source, is that individual project requests would go before the City Council for funding. Commr. Settle said some housing elements in other cities mention a fund set aside for disaster relief . He suggested the draft could allow trust fund money as disaster relief. P.C. Minutes May 13 , 1992 Page 10 Commr.. Hoffman suggested the term time frame should be defined. Commr. Cross questioned what was meant by development standards. Jeff Hook suggested design standards might make the meanings clearer. Page 8 : Carla Sanders asked for a rewording of the statement that the City will amend regulation standards to protect the health, safety, and welfare of residents. She said there are some policies, such as hillside development , which are not covered by health, safety and welfare that citizens value. Jeff Hook explained that the intent was for the City to possibly reduce development standards which were not essential to protect public health, safety or welfare to avoid unnecessary impediments to affordable housing. He suggested keeping language stating the City shall review its regulations and adding "may modify" its regulations. The Commission agreed. Page 11 , 120 . 11 Commr. Hoffman felt this section should be eliminated. _ Jeff Hook explained the statement was needed to state that the Land Use Element and the capital improvement program would carry out mentioned policies . He said the word " investment" should be replaced with the word " improvement . " Commr. Settle suggested the words "will enable" be replaced with "may enable" because the goal might not be possible to reach. He said he preferred permissive wording to mandatory wording. Commr. Hoffman believed the meaning of the statement was not that the City would achieve it , but would provide the climate in which it would be possible for it to happen. Commr. Settle preferred Commr. Hoffman' s wording. Jeff Hook said the policies are designed to enable the City to .' reach the goal , but whether that goal is actually achieved depends on many other variables. Commr. Hoffman suggested adding a sentence stating that providing the regulatory climate to meet regional housing needs does not ensure that the City will achieve the goal . Carla Sanders said she agreed with Commr. Settle. Page 12, 120 . 14 : Commr. Settle suggested a rewording stating "The City will review and may amend. " P.C. Minutes May 13 , 1992 Page 11 Commr. Karleskint suggested the Growth Management Ordinance be referenced in the draft as guiding the growth rate. Jeff Hook explained that the Land Use Element and the Housing Element must , by law and by City policy, be consistent . r In response to concerns of Commrs . Hoffman and Settle, Jeff Hook explained the chart on page 14 was included to show a baseline of housing units to coincide with city land zoned currently zoned residential and areas in expansion areas to be zoned residential in the future. He said the information in the housing element was included to meet State law. Commr. Settle suggested that a statement be included mentioning that total buildout is not expected to occur during the next five years. .. Commr. Hoffman felt that the wording under Residential , which addresses rezoning to a non-residential use as being only approved as a comprehensive update of the LUE, could lead to the assumption that general plan amendments would only be evaluated every 10 years. Arnold Jonas suggested rewording the passage to state any rezoning from residential to another use will require an analysis of the City' s ability to provide housing throughout the City. Commr. Hoffman said he agreed with the rewording. Page 17 , Sororities and Fraternities: Commr. Hoffman suggested adding a program whereby the City would work with Cal Poly to dedicate a Greek Row on campus or near Cal Poly. Commr. Settle said that if housing for married students, faculty, and handicapped individuals were included in the discussions about housing for sorority and fraternity members , Cal Poly would be more willing to negotiate with the City for housing on campus . Arnold Jonas agreed with Commr. Settle. He added that Cuesta College could also be included in discussions . The Commission asked staff to prepare a map showing a one mile radius 'of Cal Poly. Page 16: Carla Sanders asked that the reference to neighborhood needs be consistent with the wording of neighborhood character needs in the LUE. Page 19, 20 . 33: Commr. Cross asked how this cost could be accomplished. /f-a27 P.C. Minutes May 13 , 1992 Page 12 Commr. Settle said it had been implemented regarding a past proposal for expansion at the California Mens Colony. Commr. Karleskint said a reference to Cuesta College should be Included here, as well as everywhere else Cal Poly is mentioned in the draft. Page 26, 2. 10 : Commr. Cross asked that an increase for Cuesta College be included. Section 5, Page 5: In answer to a question by Commr. Settle, Jeff Hook proposed that staff write a position paper to the City Council explaining the issues, presenting the Commission' s recommendation, explaining the possible implications of not meeting the State' s guidelines , and explaining alternatives to be considered for staff to receive direction from the City Council . Commr. Settle said that because it was an election year and there would be different in members on the City Council in the Fall , it might not be beneficial to prolong the preparation process by having the City Council review the draft before it is submitted to the State. He expressed concern that the document could become a campaign issue. Commr. Karleskint agreed with Commr. Settle and felt that the City Council would want to know the State' s response before reviewing the document . Commr. Settle felt that if the document was sent to the State before review by the City council , the burden would be on the State, not the City. Jeff Hook said staff planned to propose sending the document to the State before review by the City Council as an option to the City Council . He said a City Council member had told him that nothing should be sent to the State without the Council ' s review and approval . Commr. Settle suggested that the City Council be informed that the Commission' s intention is to send the draft to the State without City Council review, in time for the City Council to overrule that decision. Jeff Hook said that staff believed it was essential to provide Councilmembers with the background behind the regional housing needs issue and to provide possible alternatives. He also said some planning commissions in other cities are sending drafts or lists of programs to the State before review by their city councils. Arnold Jonas said there was no usual procedure regarding when city councils review this type of draft . He explained that when P.C. Minutes May 13, 1992 Page 13 r planning commissions send drafts directly to the State, city councils then have the benefit of the State' s response to the documents, but other city councils prefer to review documents before submittal to the State. He suggested giving the City Council the option of reviewing the one percent growth rate or postponing review until the State' s response is received. Commr. Karleskint said it might be best for the City Council to support the one percent growth rate before it is sent into the State. He expressed concern that if the Planning Commission sent the document to the State and the State denied the requested one percent growth rate, the City Council would not be able to say it supported the one percent growth because it would no longer be an option. Page 138 , Regional Housing Needs Assessment : Jeff Hook explained the chart illustrating percentages of low and very low incomes of those needing housing. Chairman Karleskint requested the other Commrs. to read through the document and submit written corrections on errors and omissions to Jeff Hook by Friday, May 22, 1992 . In answer to a question by Commr. Settle, Jeff Hook said it would probably be about one month before changes are made and a decision is reached by the City Council as to when it wishes to review the document. Commr. Settle felt it was important to find out the opinion of the City Council . Page 16, Program 23: Commr. Cross expressed concern that conversions, particularly small. motels near the freeway, should have rent controls to keep them affordable. Jeff explained that concern had only been addressed in the downtown area, but it could be expanded. Chairman Karleskint closed the public hearing. COMMENT D DISCUSSION The Pla ping Commission retreat was scheduled for Thursday, May 28, 1992 om 7: 00 p.m. to 11: 00 p.m. at the Apple Farm. A Planning Commissi study session was scheduled for June 8 , 1992 from 4 : 00 p.m. o 6 : 00 p.m. Commr. Cross d the City Council voted 4-1 to include a requiremen for showers in the Circulation Element . MEEI_ AGENDA DATE ITEM # MEMORANDUM February 26, 1993 TO: CITY COUNCIL x FROM: JOHN DUNN, CITY ADMINISTRATIVE OFFICEO SUBJECT: REQUEST TO CONTINUE DISCUSSION OF THE HOUSING ELEMENT Staff is recommending that the City.Council continue discussion of the Housing Element to the meeting of April 6, 1993. As the Council is aware, staff has scheduled consideration of the Women's Shelter's Community Development Block Grant for the March 16, 1993 meeting. Given the inter-relationship of the Women's Shelter's grant to the Housing Element, staff feels it would be more appropriate to consider the Women's Shelter's item first. The continuance will allay the Women's Shelter concern over the potential for the Council to take an action on the Housing Element that could significantly limit the Women's Shelter's opportunities prior to full disclosure of the issues surrounding the grant. Contact Deb Hossli at extension 151 if you have additional questions. COMSTIO: ❑•Dawtonmoa ❑ Fm RECEIVED �� &FCwD ACHO ° FMCHU FEB 2 6 1993 AT TOWaY Q Fw DUL cLERK/oluc. ❑ pouts c FL CIT-YCLERK ❑ mcmT.TEAm ❑ mcmp. SAN LUIS OBISPO,CA g/CCREADFRE 13 ❑ UTILDIR. MEET-'; AGENDA �I IIIIII II @l fill DATE, --t # ii��i ►�Illllllll�i ► II City o SM lolls oBI 990 Palm Street/Post Office Box 8100 • San Luis Obispo, CA 93403-8100 COPMTO: ❑•Damtw Acs, ^,❑ M �Co mal (X CDD DUL February 25, 1993 CCrAACAO 0 ME� ❑ FwDUL I ctmxioxic ❑ POUCE a-t ❑ Mcnri TFJiM CJ r.FCDik TO: Council Colle gues ❑ C.READFU ❑ DIR. FROM: Penny Rappa SUBJECT: HOUSING ELEMENT - REGIONAL HOUSING NEEDS Can we all agree/support a community goal - the need for shelter and affordable housing? I believe we can. I would appreciate your considering an approach to our Housing Element revisions/update that will allow us to attain that goal. 1. A. Recognize the state as the superior agency B. Be open to compromise inorder to maintain local control C. In the absence of compromise, acknowledge the loss of CBDG funds 2. Exempt low to moderate housing units from our Residential Growth Management Ordinance. A. Remembering our initial goal - thiswould be a situation similar to the suggested exemptions for certain commercial growth where we want to target development in the downtown or Madonna area 3. "Accept"the state mandated regional housing numbers with the understanding and statement of our local constraints, i.e., water sewer, police/fire, demand for housing, air quality, schools, etc. To my knowledge this is most likely the last year we will be eligible for state funds - federal entitlement monies should come in 1994. Without misrepresenting ourselves, I believe we can state our position very clearly. Please give me a call to discuss this issue. Should the Council adopt the Planning Commission's recommendation, we will severely limit our abilities to assist both the - - Women's Shelter and the People's Self Help Housing applications. PR:cm RFCF.IVICD FEB 2 6 1993 CITY CLERK SAN LUIS OBISPO,CA' U'Denotes Actioa ❑ Fn�' c; 7IR P' TING AGENDA / CAO 1:1 . AR. �,�,,,//����CAO El FIRE aiIEF Dm€ ITEM # TTONNEY El FW DIR. O ERK/ODIC. ❑ POLICE CFL ❑ MCMT rEar.4 U PEC.DIP. MEMORANDUM ❑ CREAD FILE ❑ UTILDIR y 26, '1993 ; TO: Members of the City Council FROM: George Moylan, Housing Authority City of San Luis Obispo SUBJECT: Public Hearing Item #4, Draft Housing Element, City Council Mset.3ng of Match 2, 1993 SID: At their February 18, 1993 meeting Commissioners of the Housing Authority asked this writer to attempt to arrange a study session with your City Council to explore various housing issues facing the City. That request was placed into letter form and submitted to the City's Chief Administrative Officer on February 23, see attached copy. Iater on the same date a telephone call was received from Mayor Pinard indicatuig that the Council would be discussing the draft housing element at it's March 2nd meeting and that would present an opportunity to present the Authority's concerns at least in memorandum form. Nat having seen the draft element, although having some early ink into it's possible programs, two copies of the draft were secured from the Community Development Department. One draft was reviewed by this writer and the second by Steve Nel.s;on.. Chairman of the-Housing Authority. . Thus this is not meant to be a comprehensive review of the draft element by the full Commission, nor is it a substitution for the pry study session betw m the Council. and Housing Authority. However, it is an attempt to summarize the discussions we have had at recent Commission meetings as they apply to the City's affordable housing problems and policies as summarized in the draft element. Thus my response to the draft is in two areas, General Comments and a Specific Critique of Proposed Programs. (SAL CCHNOM: —we have no available data that would support the Regional Housing Needs as established by the San Luis Obispo Area Coordinating Council. —isle are too small a carom ni ty to develop and administer a full smorgasbord gasborid of programs. We must concentrate on a few achievable program andma them work for the benefit of citizens at all economic levels as well as those who are developing our c-rmrn,nity to our standards. support staff's position, Item 3.30 San Luis Ohispo's Housing Strategy, Page 39, that all Community Development Block Grant entitlement funds be used for affordable housing program. We also support staff's suggestion that a "partnership" between government, developers and the City's residents mist be entered into if we are to have a -successful housing strategy- RECEIVEO FEB 2 6 1993 CITY CLERK SAN LUIS OBISPO,CA —In any single-family homeownership program the Council must realize-that the inability to make a sufficent down-payment is the single biggest impediment to owning one's hare. See Section 6.24, Page 65 of the draft element. Thus if this issue is not addressed, homeownership programs will likely fail. The second most likely reason for failure is to structure a program where most potential buyers moist be at or near the top of any "income limit". Often only those at the top are eligible for financing, thus you not only limit your market but you don't deliver the program to the people you are trying to help. With that comment in mind we suggest that staff takes a hand look at Appendix F, Incase Limits and Housing Affordability Standards, 1992. (1ZL'FIQM OF P : Again this is not meant to.be an exhaustive List of co<rents. It reflects what I believe to be the consensus of the Commission of various items that have been discussed by them as they appear in the draft element: Policy 1.10.1 Page 4--We concur with staff, City standards and procedures to remove unnecessary impediments to the provision of affordable horsing, and the provision of incentives, must be reviewed. The development process in San Luis Obispo is too long and too costly. Program 1.20.1 Page 7—Inclusionary zoning, either the prevision of affordable housing or a payment in lieu fee must be considered. However, aur caution as to a smorgasbord of program remains with a further caution that any adopted program must be one that's workable in San Iuis Obispo and not borrowed from a much larger iurisdi.ction where a whole different set of economic factors may be in place. Program 1.20.1 Page 7—The establishment of a Housing Trust Fund is an excellent mea. However, in order to maximize revenues the eStahl;a}nnant of such a fund on a County-wide basis should be explored as well as should the possible contribution of a portion of transient taxes to the fund. Program 1.20.15 Page 12—Where are definite advantages to seeMixing of residential and commercial uses on the same property. However, our caution is there are sale developments where such a "Yi 7 may not be desirable. Thus there is a need to review each and every proposed development with this concern in mind. A second concern of the Housing Authority is that our clients, i.e. low ;norm families, the elderly and the disabled/handicapped are probably not the ideal persons to reside in a commercial/ residential mixed-use development. Those clients, along with younger moderate income (potential hameaanerhs1p) individuals, are the two groups most in need of assistance in our community. Thus the obvious question is would the provision of housing in a camerc al development exempt a developer fram meeting his/her responsibilities to these two groups or would yet an additional respcnsibility be placed of the developer. The above Is respectfully submitted for your consideration. 1"--r N 0 - E macut i ve Director ctor Housing Authority of the City of San Luis Obispo .. ., . ::. FUTHCij . m ro °. ��L n: o:: utnooty OF THE CI'i'Y'OF SAN:":Obispo �•,:, �� 6 c�i. :oti,•Q: 487 Leff'Street • P O Bog 638 San Lms Obispo,CA93406 •"Phone.{805)543-4478 Fac(805}543992 Executive Director-Secretary George J. Moylan February 23, 1993 Mr. John Dunn Chief Administrative Officer City of San.Luis Obispo P.O. Bax 8100 San Luis Obispo, CA 93403-8100 Dear John: At their regular mthly Toting of Ftebrua 18, 1993 the Commissioners of the Housing Authority of the City of San Luis Obispo asked that I contact you as to establishing. a study session with the City Council on housing issues within the a�ami . Tide the need to discuss affordable housing in general is obvious there are other more specific issues that also should be discussed. A starter list for a possible agenda would inrin(ia: Provisions of the proposed housing element including inclusionary housing; the tole of the Housing Authority in farmulating. Pommy and carrying cut programs; and the provision for housing in c=ercial carrying d eyel cPme is as wP11 as in new annexations. t Sincerely, George J. Moylan Executive Director 1i lOY.L XONEI.G • UPPURTUNffY