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Home My WebLink AboutSecond Reading and Adoption of Ordinance Amending Titles 5, 16, and 17 of the Municipal Code Item Click or tap here to enter text. Department: Community Development Cost Center: 4006 For Agenda of: 6/2/2026 Placement: Consent Estimated Time: Click or tap here to enter text. FROM: Timmi Tway, Community Development Director Prepared By: David Amini, Senior Planner; Ethan Estrada, Assistant Planner SUBJECT: SECOND READING OF ORDINANCE NO. 1757 (2026 SERIES) AMENDING TITLES 5, 16, AND 17 OF THE MUNICIPAL CODE REGARDING ACCESSORY DWELLING UNITS, JUNIOR ACCESSORY DWELLING UNITS, URBAN LOT SPLITS, MOBILE HOMES, AND OTHER CLARIFICATIONS AND CHANGES TO REGULATIONS ASSOCIATED WITH HOUSING. RECOMMENDATION Adopt Ordinance No. 1757 (2026 Series) entitled, “An Ordinance of the City Council of the City of San Luis Obispo, California, amending Title 16 (Subdivision Regulations), Title 17 (Zoning Regulations), and Title 5 (Licenses, Permits, and Regulations) of the Municipal Code Regarding Accessory Dwelling Units, Junior Accessory Dwelling Units, Urban Lot Splits, Mobile Homes, and Other Clarifications and Changes to Regulations Associated with Housing, with an Exemption from Environmental Review (CEQA) (CODE-0149- 2026)”. POLICY CONTEXT HE Policy 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. HE Policy 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, singleroom occupancy, or cohousing accommodations, utilizing universal design. HE Policy 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. DISCUSSION Item Click or tap here to enter text. Background In 2025, several bills implementing changes to state law regarding accessory dwelling units (ADUs), junior accessory dwelling units (JADUs), and urban lot splits went into effect, with the continued intention of streamlining and incentivizing housing production statewide. Some of these changes, in turn, require modifications to the City’s Municipal Code to maintain compliance with state law. The City of San Luis Obispo is designated as a Prohousing city by the California Department of Housing and Community Development (HCD). This designation is assigned to cities that implement local policies beyond what is provided by the state that seek to remove barriers to new housing development. This designation allows the City to receive priority processing and additional points when applying for state funding programs. Therefore, staff continue to reevaluate the City’s Municipal Code and its review processes for improvements to continue facilitating housing development beyond the changes required by new legislation. This process is further aided by public feedback received throughout the past year, which contributed to some of the proposed amendments. Lastly, City staff have continued to evaluate the efficacy of existing standards and procedures instituted through the Municipal Code. Based on staff and community feedback, this update contains several miscellaneous amendments to the Municipal Code to clarify City standards and procedures. The changes to the code include the following: • Clean-up of ADU code items relating to heights, setbacks, procedural requirements, lot coverage, and definitions for state law compliance. • Update to Mobile Home Park Rent Stabilization Ordinance to remove long-term lease exemption for state law compliance. • Clarifying fractional density requirements for density bonus project calculations. • Update of minor urban lot split regulations to comply with state law regarding properties in historic districts and/or containing historic structures. • Minor revisions to language in the Homestay regulations, clarifying that failure to submit required information annually constitutes grounds for revocation of permit. • Revisions to Accessory Structure regulations to clarify definitions and achieve compliance with ADU requirements. • Addition of language to the Driveway Standards for driveway approach sight triangles for consistency with the Engineering Standards. Previous Council or Advisory Body Action On April 8, 2026 (Agenda Packet), the Planning Commission, on a 6-0 vote (Tolle absent) adopted a Resolution which recommended that City Council introduce and adopt an Ordinance amending Title 16 (Subdivision Regulations), Title 17 (Zoning Regulations), and Title 5 (Permits, Licenses, and Regulations) of the Municipal Code regarding accessory dwelling units, junior accessory dwelling units, urban lot splits, mobile homes, and other clarifications and changes to regulations associated with housing, with an Item 7a exemption from environmental review (CEQA) Item Click or tap here to enter text. On May 5, 2026 (Agenda Packet), the City Council voted 5-0 to introduce the ordinance to amend Titles 16, 17, and 5. Public Engagement Public notice was provided for the Planning Commission meeting (April 8, 2026). Notice of the May 5, 2026, City Council public hearing was published in a widely circulated local newspaper, and hearing agendas for meetings were posted at City Hall, consistent with adopted notification procedures. The changes were discussed at the Developers Roundtable meeting on May 7, 2026. CONCURRENCE Planning, Building, and Engineering Division staff from the Community Development Department, as well as the City Attorney’s Office, have reviewed the proposed changes to Titles 16, 17, and 5 and provided feedback that has been incorporated into the proposed amendments. ENVIRONMENTAL REVIEW The proposed code amendments to Title 16, Title 17, and Title 5 of the Municipal Code have been assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines, and the environmental regulations of the City. Specifically, the proposed amendments have been determined to be exempt from further environmental review pursuant to CEQA Guidelines Section 15061(b)(3), the “Common Sense” exemption, because the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment, and it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment. Individual discretionary developments will still be required to conduct environmental analyses as appropriate. The proposed code amendments pertaining to ADUs and JADUs are also exempt under Public Resourced Code Section 21080.17 that applies t o local ordinances implementing state regulations related to accessory dwelling units. FISCAL IMPACT Budgeted: Yes Budget Year: 2026-27 Funding Identified: N/A Fiscal Analysis: Funding Sources Total Budget Available Current Funding Request Remaining Balance Annual Ongoing Cost General Fund $0 $0 $0 $0 State Item Click or tap here to enter text. Federal Fees Other: Total $0 $0 $0 $0 The Municipal Code changes implemented by this ordinance would not have a direct fiscal impact on the City. ALTERNATIVES 1. Continue the second reading and adoption of the ordinance. An action continuing the project should include direction for staff on pertinent issues that should be further studied or analyzed for future Council consideration. 2. Do not adopt the introduced ordinance. Not approving the amendments would result in the City’s Municipal Code not being consistent with state law. Denying the proposed amendments would also not address the potential barriers to housing production that have been identified within the City’s Municipal Code. ATTACHMENTS A - Ordinance No. 1757 (2026 Series) adopting amendments to Titles 16, 17, and 5