HomeMy WebLinkAbout05/04/2010, PH 1 - CONSIDERATION OF A CONDOMINIUM CONVERSION FOR 10 APARTMENTS AT 614 GRAND AVENUE (CON 12-10). counat
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CITY OF SAN LUIS OBISPO
FROM: John Mandeville, Community Development Director
Prepared By: Brian Leveille, Associate Planner
SUBJECT: CONSIDERATION OF A CONDOMINIUM CONVERSION FOR 10
APARTMENTS AT 614 GRAND AVENUE (CON 12-10).
RECOMMENDATION
Adopt the attached resolution approving a condominium conversion for 10 units at 614 Grand
Avenue(Grand Terrace Townhomes, CON 12-10).
DISCUSSION
Background
The City's process to consider the conversion of rental apartment properties to "for sale"
condominiums is regulated by Chapter 16.17 of the Municipal Code. This year the City has received
one such request. With only one application for conversion, and no necessary project ranking from
the Planning Commission, the application has been forwarded directly to the City Council for
consideration. Chapter 16.17 establishes numerical limits for condominiums that may be converted
annually. The limits are defined as "half the number of multi-family rental dwelling units added to
the City's housing stock in the previous year minus the number of such units demolished", and are
intended to protect the City's supply of rental housing. In 2009, a net of 49 multi-family rental
apartments were added to the City's housing stock; therefore, 25 condominiums may be converted
in 2009 (The City's Zoning Regulations "round up" some standards at 0.5 or above). The
applicant's request to convert 10 units is within the maximum number of allowable condominium
conversions for 2009.
The conversion approval process is only the first step. If the applicant's request is approved, the
project will need to return to the Planning Commission and City Council to process a condominium
tract map. With the review of the tract map, specific code requirements and conditions will be
applied to the project. The project would also require architectural review of building and site
improvements. At this time, the Council's review is to consider whether or not the apartment
project should be allowed to begin the conversion process.
Data Summary
Address: 614 Grand Avenue
Applicant/Property Owner: Rick Porter
Zoning: R-4
General Plan: High-Density Residential
Environmental Status: Condominium conversions are exempt from CEQA in
accordance with Section 15301 (k) "Existing Facilities", of
CEQA.
1 � _ I
Council Agenda Report–CON 17-09
Page 2
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Figure 1. Project site and vicinity
Site Description
The property is 28,750 square feet (.66 acres) in area and is located at the southeast comer of Grand
Avenue and Garfield Street (Figure 1, below). The existing development consists of 24-apartment
units in a two-building complex known as "Grand Terrace Townhomes" and was originally
constructed in approximately 1976. The remainder of the site consists of asphalt parking area,
concrete walkways and landscaping along the project street frontages. The project site is surrounded
by similar multi-family development zoned Medium-High Density Residential (R-3) and High-
Density Residential (R-4).
Project Description
In 2009, 14 units were approved for conversion. The remaining ten units in the project could not be
approved for conversion at the time since the numeric limit of allowed conversions for 2008 would
have been exceeded. The applicant is now proposing to convert the remaining ten units to "for sale"
condominiums. The conversion process includes retrofitting each unit with separate utilities and
performing upgrades to the parking area and site to comply with current zoning standards. The
project will also require significant site work including common open space improvements and
incorporation of site amenities, such as storage space and laundry facilities, that are typically
required for condominium projects. Additionally, the applicant is proposing an exterior renovation
and interior remodel. As discussed in additional detail below, three affordable units are proposed.
llE I A
Council Agenda Report—CON 17-09
Page 3
Evaluation
The following paragraphs evaluate the conversion for consistency with General Plan policies and
the City's Condominium Regulations established within the City's Subdivision Regulations.
1. General Plan Consistency
While Housing Element policies do not favor rental over ownership housing, (or vice versa) there
are however, General Plan policies that promote the preservation of affordable housing. The
following General Plan policies need to be taken into consideration when reviewing the proposed
conversions.
H 2.4: Creation of Various Housing Types
Encourage housing production for all financial strata of the City's population, in the
proportions shown in the Regional Housing Needs Allocation for the 2007— 2014 planning
period. These proportions are: extremely low income, 11 percent, very low income, 12%; low
income, 16%; moderate income, 19%; above moderate income, 42%.
Evaluation; Maintaining a variety of housing types is important to providing housing for all
financial strata of the City's population. This includes rental and ownership housing, as well as
apartments, duplexes, and single family detached housing. It is generally thought that attached
rental housing (especially apartments) is the most affordable housing type because of lower land
cost per unit, relatively smaller size, and no down payment costs or mortgage financing costs.
Close examination reveals that there are many factors that can result in apartment rents that are not
affordable. Even so, the City regulates the conversion of apartments to condominiums so as to
insure there is no net decrease in the number of apartments in the City. The City's Condo
Conversion Regulations require that the number of apartments converted to condominiums cannot
exceed the number of new apartments built in the previous year. Last year, 49 net new apartments
were constructed. The request to convert 10 apartments is less than half the number of new
apartments constructed last year.
H 3.2: Discourage Removal of Affordable Housing
Discourage the removal or replacement of housing affordable to very-low, low, and
moderate income households by higher cost housing.......unless such actions are necessary
to achieve General Plan objectives and: (1) it can be demonstrated that rehabilitation of
lower-cost units at risk of replacement is financially or physically infeasible, or (2) an
equivalent number of new units comparable or better in affordability and amenities to those
being replaced is provided, or (3) the project will correct substandard, blighted or unsafe
housing; and(4) replacement will not adversely affect a designated historic resource.
Evaluation: There are currently no guaranteed (long-term designated) affordable homes among
the apartments that will be converted. The proposed project would provide an equivalent
number of units with comparable affordability and better amenities (item 2 above). Though the
units are proposed for conversion from rental units, the units are still considered "affordable by
design" by inclusionary housing requirements since they are less than 1,100 square feet. Three
units will be deed restricted at the "low" income level for 45 years which is well above the
minimum requirement and a noteworthy addition to the City's affordable housing supply. This
is a substantial increase in long-term affordability since there are no units within the project
i Al- 3
Council Agenda Report—CON 17-09
Page 4
that are currently deed restricted. Also, adding low income units to the City's housing stock,
particularly in a private development, is noteworthy as at this time those units will be available
only to families with a maximum annual income of$53,600. Low income 1-bedroom units rent
for a maximum of$1,340 per month and sell for a maximum of$153,000.
For amenities, the project will offer improved common and private open space area with new
private open space fencing which will provide for improved privacy. The proposed carport with
upper level deck will provide common open space. The conversion project would also improve
the condition of the ageing structures with exterior and interior renovation and correction of all
substandard conditions noted in the property inspection report. The conversion project will
improve the appearance and safety of the existing structures constructed in 1976.
Housing Policy 4.2: Apartments and Condominium Projects
Include both market-rate and affordable units in apartment and residential
condominium projects and intermix the types of units. Affordable units should be
comparable in appearance and basic quality to market-rate units.
Evaluation: The Condo Conversion Regulations are designed to mitigate the displacement of low
and moderate income persons by requiring affordable housing provisions to be incorporated into the
conversion. At a minimum, condominium conversions are subject to the City's Inclusionary
Housing Requirements which require a percentage of the units to be deed restricted to affordable
housing standards for a minimum of 45 years. The applicant is providing three "low" income deed
restricted units and all of the units are anticipated to be affordable by design based on their size. The
conversion will establish an intermix of market rate and affordable residences.
2. Property Development Standards
Condominium Conversion property improvement standards state that conversion projects shall
substantially conform to the City's building, housing codes and Zoning Regulations in effect on the
date the conversion project is approved. The property is in substantial conformance with applicable
standards but will require modifications to bring the property into full conformance with City codes
and standards and condo conversion regulations. These include improvements to private and
common open space, and various site improvements. Additional needed improvements will likely
be identified in the tract map review of the project. Each of the changes identified at this time is
discussed in the following:
a. Parking and Driveway Standards
The existing parking lot is non-conforming since there are no landscape planters and the parking
lot needs to be repaved and restriped to provide better drainage and correct the existing
condition of pooling water.
b. Landscaping&Trash and Recycling Enclosure
A new trash and recycling enclosure will be required which complies with current trash and
recycling requirements and provides adequate screening. Enhanced landscaping will need to be
provided in common areas and along the perimeter fences.
Council Agenda Report—CON 17-09
Page 5
c. Walkways and patio surfaces
Concrete walkways are in poor condition and will be replaced with new salt finish walkways
and existing concrete patios are proposed to be replaced with stamped colored concrete.
d. Common and Private Open Space
To meet the intent of the condominium requirements, open space areas are required to be
improved with usable amenities. The applicant proposes to add covered parking with the open
space/common area deck above. Additionally, private yards are proposed for each unit which
will require new fencing to provide for adequate privacy.
Conclusion
The proposed conversion accomplishes several City policy goals. The proposed remodel of the site
and buildings will bring the property into compliance with the City's current Community Design
Guidelines, the City's Subdivision Regulations, and the City's Parking and Driveway Standards.
Furthermore, the guarantee of three affordable units accomplishes City Housing Element goals and
provides for long-term affordability. The affordability component, building and site area
improvements, and common open space access for area residents, offset concerns that there will be a
loss of affordable rental housing stock.
CONCURRENCES
The conversion requests have been reviewed by other City departments including Public Works,
Utilities, Building, and Fire. If the conversion request is approved, a tract map submittal and
specific project conditions will be required to comply with Building Codes and other City
Standards.
FISCAL IMPACT
When the General Plan was prepared, it was accompanied by a fiscal impact analysis, which found
that overall the General Plan was fiscally balanced. Allowing conversions of multi family rental
properties to individual "for sale"properties is not likely to create significant fiscal impacts.
ALTERNATIVES
1. Council could continue this item for further discussion, evaluation, and request additional
information from staff or the applicants.
2. Council could deny the request for conversion.
ATTACHMENTS
1. Vicinity Map
2. Reduced scale project plans
3. Draft Council Resolution approving a conversion for 614 Grand Avenue
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RESOLUTION NO. XXXX-10
A RESOLUTION OF THE COUNCIL OF
THE CITY OF SAN LUIS OBISPO APPROVING A
CONDOMINIUM CONVERSION FOR TEN APARTMENTS AT 614 GRAND
AVENUE (APPLICATION NO. CON 12-10)
WHEREAS, the Council of the City of San Luis Obispo conducted a public hearing in the
Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California, on May 4, 2010, to
consider Application No. CON 21-10, a request to approve a Condominium Conversion for 10
apartments known as Grand Terrace Town homes at 614 Grand Avenue; and
WHEREAS, notices of said public hearing were made at the time and in the manner required
by law; and
WHEREAS, the conversion of existing residential apartments to ownership condominiums is
exempt from environmental review (CEQA); and
WHEREAS, the City Council has duly considered all evidence, including the testimony of the
applicant, interested parties, and the evaluation and recommendations by staff presented at said
hearing.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as
follows:
SECTION 1. Findings. Based upon all the evidence, the Council makes the following
findings:
1. The proposed condominium conversion is consistent with the General Plan because changing
the apartments to condominiums will not impact available affordable housing since the
conversion will provide three deed-restricted affordable units at the "low-income"
category consistent with the City's Inclusionary Housing Ordinance and the other units are
affordable by design.
2. Upon final tract map review, the conversion will comply with all regulations and property
improvement standards for condominium conversions.
3. As stated in the applicant's property condition report, the property is in satisfactory condition
and a report of any known defects will be made available to future property owners and kept on
file at the City.
4. Based on a staff review of the application materials, a visit to the site and a review of City
records, the property is in substantial compliance with the Zoning Code in terms of allowed
use, density, parking, yard areas,building height, and all other applicable property development
standards.
5. In accordance with the Condominium Conversion standards the applicant has delivered a notice
of intent to convert to each tenant on February 10, 2010, which will be at least 6 months prior
to the tract map review by the Planning Commission.
SNI- �3
Resolution No. [ ]
Page 2
6. The existing apartments, due to location, design, condition, and general conformance with
property development standards are appropriate for conversion to individual ownership units
and will result in a quality living environment for future property owners..
7. In light of the above findings, there exists adequate facts to support the findings required under
sections 66473.5 and 66474 of the Government Code.
8. An equivalent number of new units comparable in affordability and amenities to those being
converted are being created as part of the new project.
9. In accordance with the CEQA Guidelines Section 15301 (K) the conversion of multiple family
residences into condominiums is categorically exempt from environmental review.
SECTION 2. Action. The Council hereby approves.Application No. CON 21-10, a request to
convert ten apartment units at 614 Grand Avenue to individual ownership condominiums in
accordance with Municipal Code 16.17, subject to the following conditions:
1. The applicant shall apply for a tentative parcel map as defined by.the Subdivision Map Act and
in accordance with the City's Subdivision Regulations and Municipal Code Chapter 17.82
(Condominium Conversions). The tentative parcel map shall be subject to (but not limited to)
the following conditions of approval:
a. Each unit shall be supplied with individual meters for gas, water and electrical service.
Location and type of metering shall be subject to review and approval of the City.
b. Any building defects noted in the property condition report submitted to the City shall
be repaired prior to approval of the final condominium map.
c. Any improvements necessary to comply with the property improvement standards for
condominium conversions (Chapter 16.017.070 A through 1) shall be completed prior to
approval of the final condominium map. Such improvements include (but may not be
limited to): private open space yards, bicycle storage lockers, retrofitting units with
additional energy compliance requirements such as increased insulation or insulated
windows, restoration and refurbishing of landscape areas, installation of common area
improvements, installation of smoke detectors and fire protection systems, or repair and
upgrades of parking areas.
d. Conditions, Covenants and Restrictions (C.C.&R.$) are required, to the approval of the
Community Development Director and the Public Works Director. The C.C.&R.s shall
include a description and regulations pertaining to the open space easement and all
common areas.
e. If pertinent, the tentative map shall reflect the location of all any overhead and
underground utilities.
f. The subdivider shall submit a final map to the city for review, approval, and
recordation. The map shall be prepared by, or under the supervision of a registered civil
engineer or licensed land surveyor. The final map shall be prepared in accordance with
the Subdivision Map Act and the Subdivision Regulations.
g. Pursuant to Government Code Section 66474.9(b)(1), the subdivider shall defend,
indemnify and hold harmless the city or its agents, officers and employees from any
claim, action, or proceeding against the city or it agents, officers or employees to attack,
set aside, void or annul an approval of the city, advisory agency, appeal board or
legislative body concerning this subdivision. The city shall promptly notify the
subdivider of any claim, action or proceeding and shall cooperate fully in the defense.
Resolution No. [ ]
Page 3
2. Each non-purchasing tenant not in default under the provisions of the rental agreement or lease
shall have the right to remain not less than 180 days from the written notice of intent to convert.
3. After submittal of the tentative map, prospective tenants shall be given a written notice of intent
to convert prior to]easing or renting any unit.
4. Applicant shall give any present tenant a non-transferable right of first refusal to purchase the
unit occupied. This right of first refusal shall extend at least 90 days from the date of issuance
of the subdivision public report or commencement of sales, whichever date is later. The
tenant's security deposit and last months rent shall be credited towards the purchase of the
property.
5. Private open space yards, including new fencing and any other necessary landscape
improvements, shall be completed prior to recordation of a final map.
6. Solar water heating shall be provided for each unit, and appropriate easements shall be
provided for collector locations. The Community Development Director may waive the
requirement for solar water heating in cases where the Chief Building Official has determined
that equivalent energy saving will be obtained by other means.
7. A minimum of three units, of average size and quality, shall be deed restricted to "low"
affordable levels for a minimum of 45 years, consistent with the City's Inclusionary Housing
Ordinance. The units shall be deed restricted upon recordation of the final condominium map
prior to sale of the property.
On motion of seconded by , and on the
following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was passed and adopted this day of , 2010.
Mayor David F. Romero
ATTEST:
Elaina Cano, City Clerk
APPR D AS T FO
hristine Dietrick, City Attorney i7� _