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HomeMy WebLinkAbout07/05/2011, PH 2 - APPROVAL OF CONVERSION OF 23 SENIOR APARTMENT UNITS INTO CONDOMINIUMS AT THE OAKS SENIOR HOUSING FA n M�� Councit � s / j acEnaa REpont '�" a CITY O F SAN LUIS O B I S P O FROM: John Mandeville, Community Development Director D.D gor Prepared By: James David, Associate Planner Q/t' SUBJECT: APPROVAL OF CONVERSION OF 23 SENIOR APARTMENT UNITS INTO CONDOMINIUMS AT THE OAKS SENIOR HOUSING FACILITY AND EXCEPTION TO THE PROPERTY IMPROVEMENT STANDARDS FOR PRIVATE OPEN SPACE (CON 22-11). RECOMMENDATION Adopt a resolution approving the conversion of 23 senior apartment units into condominiums, with an exception to property improvement standards for private open space, at The Oaks senior housing facility located at 61 Broad Street. DISCUSSION Situation 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 2010, a net of 46 multi-family rental apartments were added to the City's housing stock; therefore, 23 condominiums may be converted in 2011. The applicant's request to convert 23 units is the maximum number of allowable condominium conversions for 2011. 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. At this time, the Council's review is to consider whether or not the applicant should be allowed to begin the conversion process for the specified apartments. Property Description Address: 61 Broad Street Applicant(Property Owner: Oaks Senior Housing, LP Representative: Hamish Marshall Zoning: High-Density Residential with a Planned Development Overlay(R-4-PD) General Plan: High-Density Residential PH2-1 Council Agenda Report—CON 22-11 Page 2 Environmental Status: Condominium conversions are exempt from CEQA in accordance with Section 15301 (k) "Existing Facilities", of CEQA. Site Description The parcel is 104,800 square feet (2.40 acres) in area and is located at the corner of Palomar Avenue and Ramona Drive. It is one of three parcels that make up The Villages of San Luis Obispo (Villages) retirement living campus. The subject parcel is called "The Oaks", which is an apartment complex for independent living seniors. The other housing complexes in Villages are The Palms (independent living), Garden Creek (assisted living) and Sydney Creek (Alzheimer s/dementia care facility located off-campus). The Oaks consists of 50 senior apartment units. The units were originally a student housing project, which were converted to independent living senior housing via a Planned Development (PD) amendment in 1997. The 44,820 square-foot apartment building has three floors with a mix of one- bedroom and two-bedroom units. The remainder of the site consists of asphalt parking area with 60 spaces, concrete walkways, pool area and other pedestrian amenities, and landscaping throughout the site. There is a creek that runs along the northeastern edge of the parcel with mature riparian vegetation. The project site is surrounded by High-Density Residential (R-4) development on three sides, and Low-Density Residential development(R-1) to the south. Project site and vicinity e - DIVi� s JSP .H ..y 4 J 9 The Palms ,•��.-� `� . ��� ` � '' ^^ 'fit. The aks now M, Garden Creek ' r Project Description The applicant is proposing to convert 23 senior apartments to "for sale" condominiums. The stated purpose is to give seniors more financing options for retirement living. The long term plan is to PH2-2 Council Agenda Report—CON 22-11 Page 3 convert the entire building (total 50 units) from apartments to condos. It is not possible at this time since the numeric limit of allowed conversions for 2011 would be exceeded. The conversion process includes a building addition to provide additional storage area for residents, and dedication of an affordable one-bedroom unit. 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 policies that promote the preservation of affordable housing. The following General Plan. policies need to be taken into consideration when reviewing the proposed conversion. HE Goal 2 Policy 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%. 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. 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, 46 net new apartments were constructed. The request to convert 23 apartments is one-half the number of new apartments constructed last year. HE Goal 3: Housing Conservation Conserve existing housing and prevent the loss of safe housing and the displacement of current occupants.. According to the applicant, current tenants will have the option to either rent or buy at all times; purchase will not be mandated. Sale of identified units will be restricted to seniors aged 55 years or older and each sale or resale will be controlled and managed by the campus marketing and management team for the life of the campus. In addition, all current services and upkeep of the property will continue to be made by the same management. The stated intent is not to take valuable apartments for rent out of the market, but offer another product that will help retain seniors in San Luis Obispo (Attachment 2, Applicant's Statement). HE Goal 3 Policy 3.2: Discourage Removal of Affordable Housing Discourage the removal or replacement of housing affordable to very-low, low, and PH2-3 I Council Agenda Report—CON 22-11 Page 4 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. The proposed project will provide "for-sale" senior living units with comparable affordability (market-rate) to existing senior apartments, and better amenities through the addition of new designated storage areas at the end of each floor. There are currently no deed-restricted affordable units among the apartments that will be converted. One unit will be deed-restricted at the "moderate" income level for 45 years, which meets the minimum requirement for condo conversions per the Subdivision Regulations. HE Goal 4 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. 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 proposing one "moderate" income deed- restricted one-bedroom unit that will be of the same basic quality and appearance as the market-rate units. According to the 2010 Affordable Housing Standards, the maximum sales price for a "moderate" income one-bedroom unit is $243,600. Based on information provided by the applicant, projected sales prices for the converted units is already at or below this maximum sales price. Therefore, staff recommends the inclusionary unit be deed restricted at the "lower" income level, which has a maximum sales price of$139,200. This will provide an immediate affordable benefit to the senior community. 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 building and zoning codes, but requires modifications to the building to meet storage area requirements for condo conversions. Also, the applicant is asking the Council for an exception to the private open space requirements for projects in the R-4 zone. As conditioned, the project meets all other property improvement standards for minimum project size, fire protection systems, utility metering, laundry facilities,parking, common open space and recreation (MC 16.017.090). Storage Each dwelling unit needs to have provision for at least two hundred cubic feet of enclosed, weatherproof, and lockable private storage space, exclusive of cabinets and closets within the unit, PH2-4 Council Agenda Report—CON 22-11 Page 5 for the sole use of the unit owner. The applicant plans to add dedicated storage lockers at the end of each floor to accommodate this requirement(Attachment 3, Project Plans). Private Open Space In the R-4 zone, a minimum of one hundred square feet of qualifying private open space shall be provided for each unit. To qualify, open space must be private and directly accessible from the unit it serves, and must have a minimum dimension in every direction of ten feet for open space provided at ground level or six feet for open space provided in a balcony or elevated deck. The first floor units in the apartment complex have private outdoor patios, but the second and third floor units do not have any private open space. The applicant feels the requirement to provide private open space for all units should be waived based on the nature of the senior living facility. According to the applicant, the facility provides a private, non-assisted living environment, with an emphasis . on socialization. The Oaks retirement living facility was designed for independent senior adults who want to enjoy a lifestyle filled with recreational, educational and social activities with other seniors. Staff supports the exception request based on the unique nature of the project, and the fact that there is more than ample common open space and recreational facilities provided on-site. The entire Villages campus has approximately 53,340 square feet of common area for residents that provides ample opportunity for individual and/or social outdoor activities (Attachment 4, Amenities Plan). Conclusion The proposed conversion provides more financing options for seniors seeking retirement housing, and accomplishes Housing Element goals by deed-restricting one unit for long-term affordability. The requested exception to the property improvement standards for private open space is minor, and offset by the abundant common open space and recreation facilities/programs available to residents. Staff supports the condominium conversion request and recommends the Council adopt the attached draft resolution. CONCURRENCES The conversion request has 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 will not create significant fiscal impacts. ALTERNATIVES 1. Continue this action and request additional information from staff or the applicants. 2. Deny the request for conversion based on findings of inconsistency with the General Plan and Subdivision Regulations. This is not recommended because it limits housing options available to seniors seeking retirement community living. PGI2-5 Council Agenda Report—CON 22-11 Page 6 ATTACHMENTS 1. Vicinity Map 2. Applicant's Statement 3. Reduced-scale Project Plans 4. Amenities Plan 5. Draft Council Resolution T. Council Agenda ReportslCommunity Development CARI201 I 1CON 22-11 (61 Broad) PH2-6 �u u�mu JOIN -c i VICINITY MAP File No. 22=11 uAKS SENIOR HOUSING, LP Attachment 2 895 Aerovista Place,Suite 100 San Luis Obispo,Ca 93401 P:805-5447343/F:805-544-1177 February 15, 2011 City of San Luis Obispo 919 Palm Street San Luis Obispo,Ca 93401 Re: Condominium Conversion The Village at the Oaks 61 Broad Street,San Luis Obispo, Ca To Whom It May Concern: Please find the enclosed application for our request to convert 50 apartments to condominiums at our senior community referenced above.As the owners of The Villages, a retirement campus with 289 units, we offer a continuum of care within our independent living, assisted living,and Alzheimer's care facilities. We would like to be able to offer the seniors who choose to live on our campus the opportunity to own their own condominium and provide them with another option for sustainable living in San Luis Obispo. Furthermore, during these difficult financial times, unless seniors live in their primary residences they are unable to qualify for a reverse mortgage. But by owning a condominium,they can qualify for this increasingly popular type of mortgage which is used by seniors to provide them with income for their daily lives.The conversion of these 50 units will help keep existing tenants on the campus in their current rental apartments,and will provide future tenants the financial ability to be able to stay in San Luis Obispo. At all times,the current and future tenants will have the option to either rent or buy;this will not be mandated.The sale of these units will be restricted to seniors aged 55 years or older and each sale or resale will be controlled and managed by the campus marketing and management team for the life of the campus. In addition,all current services and upkeep of the property will continue to be made by the same management. Our intent is not to take valuable apartments for rent out of the market, but simply offer another product that will help retain our seniors in San Luis Obispo. I look forward to receiving a positive response from the City and please feel free to contact me with any questions. Sincerely, Hamish . all WestPac Development President PH2-8 chment 3 SNVIdlUS r 6d G a a E JNISf10H 80IN3S SNVO § g AMUS GVO'd9 00 ¢papp pa k �;ki' 3 IW $pW�9tl m U w a i 6k i H §BB3� iil F C z U Q gg a p 0 e e a Eit4 I � I 1 la4 1 i � � 0 I II � 4x1 IY m QE� o s al® p I I N 4 IIIIIII / i i c '3AV bVWOltld• a C 8 e e@ s€ e tnp+ nse . . . . 4 E S PH2-9 Attachment 3 e • °� „fig-"x ""' avwwnso� NOlsa3nN g 41 �JNISf10H ON3SS71V0 SNVld2J001d lIV83AO = _ _ _ 9�5�� r• R F. 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(2011 Series) A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO APPROVING A CONDOMINIUM CONVERSION FOR TWENTY-THREE SENIOR APARTMENTS,WITH AN EXCEPTION TO PROPERTY IMPROVEMENT STANDARDS FOR PRIVATE OPEN SPACE,AT THE OAKS SENIOR HOUSING FACILITY LOCATED AT 61 BROAD STREET (CON 22-11) 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 July 5, 2011, to consider Application No. CON 22-11, a request to convert 23 senior apartment units into condominiums at The Oaks senior housing facility located at 61 Broad Street; and WHEREAS, notices of said public hearing were made at the time and in the rrtanner 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 City 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 project will provide "for-sale" senior living units with comparable affordability (market-rate) to existing senior apartments, and will provide one deed-restricted affordable unit consistent with the City's Inclusionary Housing Ordinance. 2. An exception to the condominium conversion property improvement standards for private open space is warranted because of the unique nature of the project (retirement community), and the fact that there is more than ample common open space and recreational facilities/programs provided on-site. 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. PH2-12 - Attachment 5 Council Resolution No.XXXX(2011 Series) Page 2 5. 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. 6. 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. 7. An equivalent number of new units comparable in affordability and amenities to those being converted are being created as part of the new project. 8. In accordance with the CEQA Guidelines Section 15301 (K) the conversion of multifamily residences into condominiums is categorically exempt from environmental review. SECTION 2. Action. The City Council does hereby approve conversion of 23 senior apartment units into individual ownership condominiums, with an exception to the property improvement standards for private open space, at The Oaks senior housing facility located at 61 Broad Street in accordance with Municipal Code 16.17, subject to the following conditions: 1. A minimum of one unit, of average size and quality, shall be deed-restricted to affordable income levels for a minimum of 45 years, consistent with the City's Inclusionary Housing Ordinance. The unit shall be deed-restricted upon recordation of the final condominium map prior to sale of the property. 2. An affordability agreement between the City of San Luis Obispo and the property owner shall be prepared, signed, notarized and recorded. Contact Tyler Corey, Housing Programs Manager, to establish the level of affordability and for preparation and processing of the affordability agreement. 3. A tenant's rent shall not be increased from the time this application was received to 180 days following Council approval of the conversion. 4. 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. PH2-13 Attachment 5 Council Resolution No. XXXX(2011 Series) Page 3 c. Any improvements necessary to comply with the property improvement standards for condominium conversions (Chapter 16.017.070 A through I) shall be completed prior to approval of the final condominium map, unless excepted by the City Council. d. Conditions, Covenants and Restrictions (CC&Rs) are required, to the approval of the Community Development Director and the Public Works Director. The CC&Rs shall include a description and regulations pertaining to open space and all common areas. The responsibility for the maintenance of the common fire alarm system, fire sprinkler. system and any other common systems Shall be established in the CC&Rs. e. If pertinent, the tentative map shall reflect the location of all any overhead and underground utilities. £ 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. 5. The applicant shall give each tenant a written notice of intent to convert after submittal of the tentative map, and at least one hundred eighty days before termination of tenancy due to conversion. The notice shall contain at least the following: a. Name and address of current owner; b. Name and address of proposed subdivider; c. Approximate date on which the unit is to be vacated by non-purchasing tenants (if applicable); d. Tenant's right to purchase; e. Statement of no rent increase; and statement of proposed sales prices and terms. 6. 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. 7. The 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, PH2-14 Attachment 5 Council Resolution No. XXXX(2011 Series) Page 4 whichever date is later. The tenant's security deposit and last months rent shall be credited towards the purchase of the property. 8. Prospective tenants shall be given a written notice.of intent to convert prior to leasing or renting. 9. Construction of required storage facilities shall be completed prior to recordation of a final map. Ventilation shall be provided for the storage rooms. 10. The dead end corridors in the storage rooms.shall not be more than 20 feet in length. If the building is equipped with fire sprinklers the dead end corridors shall not be more than 50 feet in length. 11. A soils report is required for the proposed storage addition. 12. This project will require the preparation of water pollution control plan. 13. The registered design professional shall survey the site to determine disabled access compliance and prepare a document of unreasonable hardship in accordance with the provisions of the 2010 CBC I I34B. Upon motion of , seconded by and on the following vote: AYES: NOES: ABSENT: The foregoing Resolution was adopted this , 2011. Mayor Jan Marx ATTEST: Elaina Cano, City Clerk APPROVED AS TO FORM: stine Dietrick, City Attorney PH2-15