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HomeMy WebLinkAboutItem 7 - Review of the 6th Cycle Housing Element Update and Negative Declaration of Env. Impact Department Name: Community Development Cost Center: 4003 For Agenda of: September 1, 2020 Placement: Public Hearing Estimated Time: 60 minutes FROM: Michael Codron, Community Development Director Prepared By: Rachel Cohen, Associate Planner SUBJECT: REVIEW OF THE 6TH CYCLE HOUSING ELEMENT UPDATE AND A NEGATIVE DECLARATION OF ENVIRONMENTAL IMPACT RECOMMENDATION 1. Consider the Planning Commission recommendation to adopt a Resolution approving the Housing Element Update and the changes incorporated into the Housing Element based on Planning Commission direction; and 2. Direct staff to make updates to the Housing Element, consistent with feedback provided by the Planning Commission and the State’s Department of Housing and Community Development (HCD); and 3. Authorize staff to continue to work with HCD to ensure that the document fully complies with its guidelines; and 4. Direct staff to return to the City Council for final approval of the Housing Element, following HCD’s determination that it fully complies with State law and HCD guidelines. REPORT-IN-BRIEF The Housing Element is a State required element of the City’s General Plan that must be updated according to a cycle established by HCD. Updating the Housing Element is a key step in the City’s efforts to expand affordable housing opportunities and is required by California Government Code Sections 65580- 65589.8. The deadline for adoption of the updated Housing Element is December 31, 2020. Once adopted, the under review “6th Cycle” Draft Housing Element will replace the current Housing Element adopted by the City and certified by the State in 2015 and will become the guiding document for City housing actions through 2028. The update process is a tool to modify housing policies and programs to reflect the chang ing needs, resources, and conditions in the community, and to respond to changes in state and federal housing law. Over the last year, the City of San Luis Obispo, as well as the County and other cities within the County have been in the process of updating their Housing Elements based on the new 6th Cycle Regional Housing Needs Allocation (RHNA) requirements enforced by HCD. The Housing Element has been updated in response to input received through multiple public presentations, meetings, online surveys, and a workshop, as well as other correspondence received over the past year. Item 7 Packet Page 45 Additionally, in coordination with the County, all cities within the County, and San Luis Obispo Council of Governments (SLOCOG), a new chapter (Chapter 4) is proposed to be added to the City’s Housing Element. Chapter 4 contains a regional vision and includes policies focused specifically on fostering regional collaboration to plan and develop housing and supportive infrastructure. On July 22, 2020, the Planning Commission recommended the City Council approve the Negative Declaration of Environmental Impact and adopt the Draft Housing Element update (Attachment B). A complete version of the Draft Housing Element can be found on the City’s Housing Element website at: https://www.slocity.org/government/department- directory/community-development/affordable-housing/housing-element. Once a jurisdiction has completed a draft update to its housing element, it is required to be submitted for review and certification by the State of California. The Housing Element is the only Element in the City’s General Plan that requires this review and certification process. HCD has been tasked to review Housing Elements for compliance with state law. HCD has 60 days to review the draft Housing Element and work with the City on any changes to the document. At the end of the 60 days, HCD issues a letter with its findings. The letter is usually a good indicator that HCD will certify the Housing Element, with recommended modifications, once it is adopted by the City Council. Having a certified Housing Element allows the City to access State funds for future housing projects. On July 7, 2020, the City submitted a draft of the Housing Element Update to HCD for review. On August 6, 2020, City staff held a phone conference with staff from HCD to discuss their preliminary review of the Draft Housing Element Update. HCD staff provided direction regarding needed technical changes including items such as additional clarification and information regarding the City’s analysis of its housing inventory and asked that the City add specific quantitative language to some of the proposed programs. Overall, HCD was supportive of the City’s efforts and strategies to increase housing affordability and production. Staff is currently working closely with HCD to address these items and achieve a determination of compliance with State law. Currently, staff is recommending the City Council adopt a resolution endorsing the proposed modifications to the Housing Element Update. Staff will return to Council for final approval of the Housing Element Update once HCD determines that the updated draft is consistent with its guidelines. DISCUSSION Housing Element Update and Regional Housing Needs Allocation State law establishes a schedule for cities and counties to periodically update their Housing Elements of the General Plan. Under this schedule, the City’s Housing Element update is due to HCD by December 31, 2020 and has until the end of April 2021 to receive HCD certification. As a part of this update, the City is required to develop programs designed to meet its share of the surrounding region’s housing needs for all income groups, as determined by the region’s council of governments. Item 7 Packet Page 46 The Regional Housing Needs Allocation (RHNA) process ensures that each jurisdiction accepts responsibility, within its physical and financial capability to do so, for the housing needs of its residents and for those people who might reasonably be expected to move there. The City has been allotted a RHNA of 3,354 housing units to plan for in the new 6th Cycle Housing Element. Table 1: Regional Housing Needs Allocation (RHNA) for San Luis Obispo County, Jan. 2019 – Dec. 2028 Very Low Income 24.6%1 Low Income 15.5%1 Moderate Income 18.0%1 Above Moderate Income 41.9%1 Totals Percent City RHNA to Total RHNA Number of Units Arroyo Grande 170 107 124 291 692 6% Atascadero 207 131 151 354 843 8% Grover Beach 91 57 66 155 369 3% Morro Bay 97 60 70 164 391 4% Paso Robles 356 224 259 607 1,446 13% Pismo Beach 113 71 82 193 459 4% San Luis Obispo 825 520 603 1,406 3,354 31% Unincorporated County 801 505 585 1,365 3,256 30% Totals 2,660 1,675 1,940 4,535 10,810 100% Source: San Luis Obispo Council of Governments (SLOCOG), 2019 1Percent of total housing need in each jurisdiction. Residential Development Capacity As part of the Housing Element update process, jurisdictions must document their residential land capacity to show how their RHNA can be met. The City has completed this analysis and has approximately 359 acres of vacant, underutilized, blighted, or underdeveloped property that can accommodate approximately 3,155 dwelling units (a substantial portion of these units are located with the Avila Ranch planning area and San Luis Ranch Specific Plan). In addition, the City has issued building permits for 537 residential units within the 6th Cycle planning period. 729 residential units have received planning entitlements and an estimated 995 units are in the pipeline (a number of these units are located with the Orcutt Area Specific Plan, Froom Ranch Area, and 650 Tank Farm). Based on these numbers, the City’s residential capacity exceeds the 3,354-unit RHNA, and therefore, a property rezoning program will not be required by HCD for certification of the City’s Housing Element update. Previous Advisory Body and Council Review Kick-off of the 6th Cycle Housing Element update began in April 2019 with a Public Forum on Housing, followed by a Study Session with the City Council that included an update on the City’s housing programs. This City Council update included a status report on the Housing Major City Goal for FY 2017-19 and 2019-21, State housing law, Housing Element and required update, production and housing affordability. Item 7 Packet Page 47 This Study Session was also presented to the Planning Commission later in April. Below is a timeline of the advisory body meetings that have occurred about the 6th Cycle Housing Element Update: • Planning Commission Meeting – July 22, 2020 • Planning Commission Meeting – June 10, 2020 • Human Relations Commission Meeting – June 3, 2020 • Planning Commission Meeting – April 24, 2019 • Public Forum and City Council Meeting – April 2, 2019 Comments and direction provided at these meetings, as well as through public engagement and the Housing Major City Goal were important for informing proposed modifications to the Housing Element Update. Public Engagement In addition to discussing the Housing Element update at public meetings, the City facilitated several presentations, two online surveys, and a public workshop. • Online Survey – June 8, 2020 – June 24, 2020 • Chamber of Commerce (Economic Development Committee) – June 4, 2020 • Economic Vitality Corporation and the Home Builders Association – May 13, 2020 • Chamber of Commerce (Economic Development Committee) – April 2, 2020 • Online Survey – December 10, 2019 – January 10, 2020 • Housing Element Workshop – December 10, 2019 • Association of Realtors – July 23, 2019 In December 2019, prior to COVID-19, the City hosted an in-person workshop and an online survey to garner feedback on the needs, issues, and opportunities of housing within the City of San Luis Obispo. Approximately 30 people participated in the workshop and 77 people participated in the online survey. This is equivalent to 5.4 hours of public comment at 3 minutes per response. The following is an overview of public feedback and comments received for each category, which were considered and incorporated into Chapter 3 (Goals, Policies, and Programs) of the Housing Element Update where appropriate: 1. Needs • Affordable housing • Workforce (missing middle) housing • Housing for families • Student housing • Senior housing • Housing near employment • More housing Item 7 Packet Page 48 2. Issues • Affordable housing • Insufficient number of housing units to rent or purchase • Not enough diversity in the types of housing • Higher density housing 3. Opportunities • Increase residential densities where appropriate, such as downtown • Provide more student housing on campus • Rehabilitate existing housing resources The City provided another opportunity for the community to provide specific feedback regarding the proposed modifications to Chapter 3 (Goals, Policies & Programs) of the Housing Element. This was accomplished through another online survey in the place of an in-person public workshop during the COVID-19 restricted activity period. 337 individuals visited the survey and 78 individuals responded to the questions (this is equivalent to 3.9 hours of public comment at 3 minutes per response). The second online survey asked participants to note if anything that was missed or needed to be modified in the proposed changes, if there were additi onal housing topics that should be considered, and requested ideas on how to increase the production and affordability of housing in the community. The responses identified housing concepts that are included throughout various goals, policies, and programs such as: • Promote ADA/special needs housing • Promote affordable senior housing projects • Support high density housing developments • Support local preference • Infrastructure planning (e.g. pedestrian, bicycle, improvements, etc.) • Include amenities within housing developments such as: community gardens, common open space, parks, car share programs, and edible landscaping. • Affordable housing • Senior housing • Homeless/Transition housing The responses also included ideas for increasing production and affordability of housing that staff will consider with program implementation. These ideas include: • Update Inclusionary Housing Ordinance • Reduce setback requirements • Pre-approved ADU plans • Reduce parking requirements • Higher density and taller buildings in Downtown • Reduce fees • Round all densities to the nearest 0.5 • Upzone each residential zone to the next highest density Item 7 Packet Page 49 Goals, Policies and Programs – Chapter 3 The 6th Cycle Draft Housing Element and its appendices (Attachment D) include information such as updated demographic and residential capacity information, housing constraints and resources, and implementation. The core of the Housing Element, however, falls under Chapter 3: Goal, Policies and Programs, which provides direction and a plan for how the City will achieve the accommodation of 3,354 units as required by HCD. Chapter 3 of the Housing Element has been updated in response to input received through 12 presentations, meetings, online surveys, and a public workshop, as well as other correspondence over the past year and a half. Staff presented to the Planning Commission on June 10, 2020 and July 22, 2020 regarding proposed modifications to the Housing Element’s goals, policies and programs based on public comment, the changing needs, resources, and conditions in the community, and state law. The Planning Commission provided direction to staff regarding those modifications. The tables in the following discussion and Attachment C show legislative changes in red and changes based on the Planning Commission direction in blue. The City Council should review the proposed modifications to Chapter 3 and provide comments or direction as appropriate. Some of the more substantive proposed changes or additions are highlighted below for consideration, however, the City Council may comment and/or provide direction on any of the goals, policies, or programs within Chapter 3. A brief description is provided explaining why the proposed modification or addition or removal better achieves housing goals or state requirements. Modifications are broken into four tables: 1) New or Modified Goals, Policies, and Programs; 2) Removed Goals, Policies, and Program; 3) Zoning Regulations Update; and 4) AB 1600 and Fee Schedule Update. New or Modified Goals, Policies, and Programs Org # New # Goal Goal/Policy/Program Reason for Modification New or Modified Goals, Policies, and Programs 1.4 Safety Assist owners of older residences with information on ways to repair and upgrade older structures to meet higher levels of building safety, efficiency, and sustainability. Per Planning Commission (PC) comments on June 10, 2020, staff is recommending a new policy that supports improvements to older residential structures. 2.15 2.13 Affordability Update the Inclusionary Housing Ordinance, including Table 2A, based on findings and recommendations in the 2020 Affordable Housing Nexus Study and conduct further feasibility analysis in order to Eevaluate the Inclusionary Housing Ordinance requirements and the effect of Table 2A on the City’s ability to provide affordable housing in the proportions shown in the Regional Housing Needs Allocation, per Policy 2.4. In March of 2020, the City completed the 2020 Affordable Housing Nexus Study. The Study’s findings and recommendations indicate that the City’s Inclusionary Housing Ordinance needs to be updated to better reflect the correct proportion of inclusionary affordable units required as a part of new development within the City. This program has been added to recognize and prioritize this work effort. Item 7 Packet Page 50 Org # New # Goal Goal/Policy/Program Reason for Modification New or Modified Goals, Policies, and Programs 2.15 Affordability Evaluate a flexible density pilot program and initiate an update of the Zoning Regulations and Community Design Guidelines to incorporate flexible density development options in Downtown Core and portions of Upper Monterey and Mid-Higuera Special Focus Areas to support the production of smaller residential units (150 to 600 square feet). This program was recommended in part by input from the community and the work program associated with the Housing Major City Goal. The community and Council identified that the Downtown Core and portions of Upper Monterey and Mid-Higuera Special Focus Areas could be appropriate for higher density housing development. The program seeks to evaluate how the City might allow flexible density beyond what is allowed in these areas to support the production of smaller units (150-600 square feet in size). 4.6 4.6 Mixed-Income Housing Consider aAmending the City’s Inclusionary Housing Ordinance and Affordable Housing Incentives to require that affordable units in a development be of similar size, number of bedrooms, character and basic quality as the nonrestricted units in locations that avoid segregation of such units including equivalent ways to satisfy the requirement. Also evaluate adjusting the City’s allowable sales prices for deed-restricted affordable units per a variety of unit types. The Inclusionary Housing Ordinance was last reviewed in 2007. Based on community feedback, staff is recommending language be added to the program to include consideration and clarification regarding affordability (by unit type), location of affordable units (onsite, dispersion, off-site, etc.), equivalent size of units (number of bedrooms), and equivalent options to meet these requirements. This modification seeks to address concerns that projects meet inclusionary requirements with smaller units, units on a separate property, or units constructed by another entity. Goal 5 Goal 5 Housing Variety Goal 5 – Housing Variety and Tenure. Provide variety in the location, type, size, tenure, and style of dwellings. Staff is recommending that this goal, and several of the policies within, be modified to focus on housing variety rather than tenure which is covered under Goal 3: Housing Conservation. 5.3 Housing Variety Encourage the development of a variety of “missing middle” housing types. This policy is based on community feedback and the work program associated with the Housing Major City Goal to address the need for more housing. Missing middle housing types include duplexes, triplexes, quadplexes, cottages, etc. Policy 5.4 also replaces Program 2.16 which discusses workforce housing. Creating a workforce level of affordability was examined and found that it could not be successfully implemented on a citywide basis as there are no existing State standards for such an income level. Policy 5.4 sets the framework for the newly proposed Program 5.6. 5.4 Housing Variety Evaluate opportunities for promoting “missing middle” housing types (e.g. duplex, triplex, quadplex, cottages, etc) to increase housing options in the City. To implement new Policy 5.3, this program proposes that the City evaluate ways in which to increase the number of housing units available to the missing middle by specifically exploring ways to promote specific housing types such as duplexes, triplexes, quadplexes, cottages, etc. Item 7 Packet Page 51 Org # New # Goal Goal/Policy/Program Reason for Modification New or Modified Goals, Policies, and Programs 6.8 6.6 Housing Production Consistent with the City’s goal to stimulate higher density infill where appropriate in the Downtown Core (C-D Zone), Upper Monterey, and Mid-Higuera Special Focus Areas,, the City shall consider changes to the Zoning Regulations that would allow for flexible density standards that support the development of smaller apartments and efficiency units. This policy was updated to encourage additional residential units not only in Downtown, but in Upper Monterey and Mid-Higuera Special Focus Areas consistent with the City’s Major City Goal work program and new Program 2.15. 6.13 6.12 Housing Production Continue to develop incentives to encourage additional housing in the Downtown, Upper Monterey, and Mid-Higuera Special Focus Areas Downtown Core (C-D Zone), particularly in mixed-use developments. Density based on flexible density average unit size in a project should be explored to encourage the development of smaller efficiency units. This program was modified to be consistent with Policy 6.6 and support the City’s Major City Goal work program and new Program 2.15. Goal 7 Goal 7 Neighborhood Quality Goal 7 - Neighborhood Quality. Maintain, preserve and enhance the quality and livability of neighborhoods. encourage neighborhood stability and owner occupancy, and improve neighborhood appearance, function and sense of community. Staff is recommending that this goal be modified to focus on providing quality of life in neighborhoods, removing language associated with neighborhood stability and owner occupancy. This language was removed to focus the goal on neighborhood quality, amenities, and access and not on whether a neighborhood has renter or owner-occupied housing. Focus on home ownership is included in Goal 10. This modified language is consistent with Goal 7’s existing policies and programs that focus on amenities, outdoor space (public/private), walkability, access to transit, schools, parks, commercial centers, maintaining setbacks, and overall character and quality of established neighborhoods. ---- 7.9 Neighborhood Quality Encourage neighborhood design elements that improve overall health of residents such as providing safe and convenient opportunities to access healthy food and attractive places for recreational exercise. This is a new policy that has been added per recommendation of the Planning Commission to address public health and housing. ---- 7.14 Neighborhood Quality Encourage new developments with 10 or more residential units be reviewed and scored by the Healthy Communities Work Group prior to submitting a planning application to the City. This is a new program recommended by the Planning Commission to support Policy 7.9. Item 7 Packet Page 52 Org # New # Goal Goal/Policy/Program Reason for Modification New or Modified Goals, Policies, and Programs ---- 7.15 Neighborhood Quality Encourage developments with 10 or more residential units to include the following: outdoor visiting and gathering spaces, places to exercise or recreate, and spaces reserved for edible landscape or community gardens. This is a new program recommended by the Planning Commission to support Policy 7.9. Goal 10 Goal 10 Local Preference Maximize affordable housing opportunities for those individuals who are employed in business that are located in geographic areas that are customarily included in the City’s annual jobs-housing balance analysis who live or work in San Luis Obispo while seeking to balance job growth and housing supply. Based on community feedback and a need for more housing for local individuals who work in the City or nearby vicinity, staff is recommending Goal 10 be updated to focus on providing housing for individuals who are employed in business that are located in geographic areas that are customarily included in the City’s annual jobs-housing balance analysis. 10.2 Local Preference Encourage, and where legally allowed, require new housing development to give preference in the following order: 1) individuals who are employed in business that are located in geographic areas that are customarily included in the City’s annual jobs-housing balance analysis, 2) individuals residing in the County, and 3) finally to individuals from outside the County. This is a new policy that staff is recommending to support proposed revisions to Goal 10. This policy sets preferences for new for-sale housing developments in the initial offering and sales to improve the City’s jobs-housing balance, reduce competition from outside buyers and allow those that work in the City the opportunity to live in the City, thereby reducing commute times. 10.4 Local Preference Encourage residential developers to sell or rent their projects to those residing or employed in the City first before outside markets. Staff is recommending that the City continue to work with housing developers to limit for sale units to owner-occupants for the first five years after sale. This is a strategy that has been implemented as part of the Avila Ranch and San Luis Ranch projects to encourage local home ownership opportunities rather than outside investor properties. Removed Goals, Polices, and Programs Over the last several years, the City has been able to implement various policies and programs, as well as determine that other policies and programs no longer fit the current needs and issues of the community or no longer comply with new state regulations. As such, staff is recommending the following be removed from the 6th Cycle Housing Element. Item 7 Packet Page 53 Org # Goal Goal/Policy/Program Reason for Removal Removed Goals, Policies, and Programs 3.3 Housing Conservation Encourage seismic upgrades of older dwellings to reduce the risk of bodily harm and the loss of housing in an earthquake. All multi-family structures have been retrofitted and single-family residences are exempt from seismic retrofits. Additionally, any upgrades to older residential structures is now covered in the proposed new Policy 1.4. 3.8 Housing Conservation Adopt an ordinance that implements policy 3.2 to discourage removal or replacement of affordable housing. Affordable housing units are protected by the State of California Housing Accountability Act, SB 330 (see Policy 3.2), and the “no net loss” requirements of SB 166. An ordinance is no longer required. 6.2 Housing Production New commercial developments in the Downtown Core (C-D Zone) shall include housing, unless the City makes one of the following findings: Housing is likely to jeopardize the health, safety or welfare of residents or employees; or The property’s shape, size, topography or other physical factor makes construction of new dwellings infeasible. Updated to be consistent with Zoning Regulations update. The Zoning Regulations require housing as a part of any development within the downtown. 6.6 Housing Production Property located behind the former County General Hospital shall be designated a “Special Considerations” zone and may be considered suitable for residential development after further analysis and environmental review, provided that development be limited to site areas with average slopes of less than 20 percent, that approximately one-half of the total site area be dedicated for open space and/or public use, and that an additional water tank be provided if determined necessary to serve new development. Completed as a part of the LUE update as part of the special focus areas section; Program 8.6. General Hospital Site. 8.3 Special Housing Needs Encourage manufactured homes in Specific Plan Areas by: A) When the City considers adopting new specific plans, including policies that support owner-occupied manufactured home parks with amenities such as greenbelts, recreation facilities, and shopping services within a master planned community setting. Such parks could be specifically designed to help address the needs of those with mobility and transportation limitations. Manufactured homes are allowed in all residential zones; applicants have not shown any interest in creating new manufactured home parks. New, higher density development is more efficient and cost effective. The most recent affordable housing projects have all been multi-family apartments. Item 7 Packet Page 54 Org # Goal Goal/Policy/Program Reason for Removal Removed Goals, Policies, and Programs B) Establishing lot sizes, setback, and parking guidelines that allow for relatively dense placement of manufactured homes within the master planned neighborhood. C) Locating manufactured home parks near public transit facilities or provide public transportation services to the manufactured home parks to minimize the need for residents to own automobiles. 9.3 Sustainable Housing, Site and Neighborhoo d Design Preserve the physical neighborhood qualities in the Downtown Planning Area that contribute to sustainability. Some ways to do this include: A) Maintain the overall scale, density and architectural character of older neighborhoods surrounding the Downtown Core. B) Encourage the maintenance and rehabilitation of historically designated housing stock. The Historic Preservation Ordinance preserves and protects historic structures and districts. Additionally, the Conservation and Open Space Element includes Policies 3.3.4, 3.3.5, that direct preservation of historic buildings, districts, and neighborhoods. Program 3.6.3 directs construction within historic districts. Goal 11 Suitability Goal 11 - Suitability. Develop and retain housing on sites that are suitable for that purpose. Policies and programs within Goal 11 are covered by the other Goals of the Housing Element, the Housing Major City Goal, the Conservation and Open Space Element, the Land Use Element, and the Safety Element. 11.1 Suitability Where property is equally suited for commercial or residential uses, give preference to residential use. Changes in land use designation from residential to non-residential should be discouraged. See discussion under Goal 11 above. 11.2 Suitability Prevent new housing development on sites that should be preserved as dedicated open space or parks, on sites subject to natural hazards such as unmitigable geological or flood risks, or wild fire dangers, and on sites subject to unacceptable levels of man- made hazards or nuisances, including severe soil contamination, airport noise or hazards, traffic noise or hazards, odors or incompatible neighboring uses. See discussion under Goal 11 above. 11.3 Suitability The City will continue to ensure the ability of legal, non-conforming uses to continue where new development is proposed. See discussion under Goal 11 above. Item 7 Packet Page 55 Regional Vision for Housing – Chapter 4 San Luis Obispo County is a rural coastal county with seven cities and numerous unincorporated communities that depend on collaborative relationships between and among government agencies, community organizations, and residents to solve the region’s significant issues including inadequate supply of affordable housing and resilient water, wastewater, and transportation infrastructure and resources. In early 2020, local agencies adopted a San Luis Obispo Countywide Regional Compact to establish a united regional framework to unlock our potential to develop an adequate supply of housing and infrastructure that support our economic prosperity. The County and all seven Cities worked collaboratively to develop the region’s first Reg ional Infrastructure and Housing Strategic Action Plan (Regional Plan) that identifies actions to address these issues. A key component of the Regional Plan is the integration of efforts to address critical housing and related infrastructure needs. As part of the Housing Element update process, representatives of the County, seven Cities and San Luis Obispo Council of Governments (SLOCOG) developed Chapter 4 (see Attachment 3, Draft Housing Element) to showcase the ongoing commitment of each agency to this collaborative effort. Chapter 4 presents a regional vision and eight policies focused specifically on fostering regional collaboration to plan and develop housing and supportive infrastructure. Planning Commission Action On July 22, 2020, the Planning Commission unanimously recommended the City Council adopt a resolution approving updates to the City’s Housing Element and Negative Declaration of Environmental Impact. The Planning Commission provided feedback at both the June 10th and July 22nd meetings regarding minor revisions to the goals, policies and programs, including an additional policy and two new programs to address healthy communities. The proposed modifications of the Planning Commission are highlighted in Attachment C in blue text. California Department of Housing and Community Development (HCD) Once a jurisdiction has completed a draft update to its housing element, it is required to be submitted for review and certification by the state of California. The Housing Element is the only Element in the General Plan that requires this review and certification process. The Department of Housing and Community Development (HCD) has been tasked to review Housing Elements for compliance with state law. HCD has 60 days to review the draft Housing Element and work with the City on any changes to the document. At the end of the 60 days, HCD issues a letter with their findings. The letter is usually a good indicator that HCD will certify the Housing Element, with their recommended modifications, once it is adopted by the City Council. Having a certified Housing Element allows the City to access state funds for future housing projects. On July 7, 2020, the City submitted a draft of the Housing Element Update to HCD for review. On August 6, 2020, City staff held a phone conference with staff from HCD to discuss their preliminary review of the draft Housing Element Update. HCD provided direction regarding needed technical changes including items such as additional clarification and information regarding the City’s analysis of its housing inventory and asked that the City add specific quantitative language to some of the proposed programs. Overall, HCD was supportive of the City’s efforts and strategies to increase housing affordability and production. Staff is currently working closely with HCD to address these items and achieve a determination of compliance with state law. Item 7 Packet Page 56 Policy Context The proposed amendments to the Housing Element are consistent with other land use goals and policies of the General Plan. CONCURRENCE Staff comments have been incorporated into the draft Housing Element. ENVIRONMENTAL REVIEW A Negative Declaration of Environmental Impact is recommended for the Housing Element Update (Attachment E). No potentially significant or significant impacts were identified. A Negative Declaration is therefore recommended for adoption in accordance with CEQA Guidelines section 15063(b)(2): “The lead agency shall prepare a negative declaration if there is no substantial evidence that the project or any of its aspects may cause a significant effect on the environment.” A 30-day public comment period was opened on July 9, 2020. A Notice of Intent to Adopt was filed with the County- Clerk Recorder and the State Clearing House. FISCAL IMPACT Budgeted: No Budget Year: Funding Identified: No Fiscal Analysis: Funding Sources Current FY Cost Annualized On-going Cost Total Project Cost General Fund N/A State Federal Fees Other: Total There is no direct fiscal impact associated with this action. The Housing Element Update is a work program in the Housing Major City Goal adopted as part of the 19-21 Financial Plan. ALTERNATIVES 1. Modify the Proposed 6th Cycle Housing Element. The Council may modify the proposed Housing Element. Specific direction should be given to staff regarding any modifications. 2. Continue the review of the 6th Cycle Housing Element. An action to continue the item should include direction to staff on pertinent issues. Item 7 Packet Page 57 Attachments: a - Draft Resolution b - Planning Commission Resolution No. PC-1017-2020 c - Chapter 3 Legislative Matrix d - COUNCIL READING FILE - Draft Housing Element e - COUNCIL READING FILE - Initial Study Item 7 Packet Page 58 R ______ RESOLUTION NO. _____ (2020 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, ENDORSING A NEGATIVE DECLARATION OF ENVIRONMENTAL IMPACT AND AMENDMENTS TO THE HOUSING ELEMENT OF THE GENERAL PLAN AS REPRESENTED IN THE COUNCIL AGENDA REPORT AND ATTACHMENTS DATED SEPTEMBER 1, 2020 (GENP-0217-2020 & EID-0218-2020) WHEREAS, State law requires cities and counties to adopt a general plan. The General Plan includes nine required elements, one of which is the Housing Element. The Housing Element must be updated every eight (8) years or as otherwise provided by State law; and WHEREAS, the Planning Commission of the City of San Luis Obispo conducted a web based public hearing, on July 22, 2020, and recommended that the City Council approve a Negative Declaration of Environmental Impact and amendments to the Housing Element to address the changing needs, resources, and conditions in the Community, as required by State law; and WHEREAS, the City Council of the City of San Luis Obispo conducted a web based public hearing, on September 1, 2020, for the purpose of considering the Negative Declaration of Environmental Impact and amendments to the Housing Element; and WHEREAS, the City facilitated 12 presentations, meetings, online surveys, and a public workshop to identify housing needs, issues and opportunities in the community and inform policy and program changes for the 6th Cycle Housing Element Update; and WHEREAS, notices of said public hearing were made at the time and in the manner required by law; 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. This Council, after considering the 6th Cycle Housing Element update, the Planning Commission’s recommendations, staff recommendations, public testimony and correspondence, and reports thereon, makes the following findings: 1. The proposed amendments included in the draft 6th Cycle Housing Element are consistent with other land use goals and policies of the General Plan. 2. The proposed amendments are appropriate and necessary to ensure that the City’s Housing Element meets State law and the changing needs, resources, and conditions in the community. Item 7 Packet Page 59 Resolution No. ______ (2020 Series) Page 2 3. The City facilitated 12 presentations, meetings, online surveys, and a public workshop to identify housing needs, issues and opportunities in the community and inform policy and program changes for the 6th Cycle Housing Element Update. 4. The City has evaluated its ability to accommodate its Regional Housing Need Allocation (RHNA) number of 3,354 dwellings by December 2028 and determined there is sufficient land suitable for residential development to accommodate the RHNA number within the planning period. 5. Achieving Housing Element State certification will promote affordable housing opportunities and help achieve adopted housing goals by making the City eligible for various housing grants and financial incentives, and will foster cooperation among local and state agencies in addressing an urgent need for affordable housing in the City. SECTION 2: Environmental Review. The City Council does hereby endorse a Negative Declaration of Environmental Impact in accordance with CEQA Guidelines section 15063(b)(2): “The lead agency shall prepare a negative declaration if there is no substantial evidence that the project or any of its aspects may cause a significant effect on the environment.” Item 7 Packet Page 60 Resolution No. ______ (2020 Series) Page 3 SECTION 3. Action. The City Council does hereby approve the proposed amendments to the Housing Element, which is incorporated herein by reference subject to final review of approval of sections by the State Department of Housing and Community Development and any changes shall be brought back for final approval. Upon motion of Council Member ___________________, seconded by Council Member __________________, and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this _____ day of ___________ 2020. ____________________________________ Mayor Heidi Harmon ATTEST: ____________________________________ Teresa Purrington City Clerk APPROVED AS TO FORM: _____________________________________ J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on _____________________. ____________________________________ Teresa Purrington City Clerk Item 7 Packet Page 61 Item 7 Packet Page 62 Item 7 Packet Page 63 GENP-0217-2020 & EID-0218-2020 Attachment B: Housing Element Chapter 3 Legislative Draft Matrix The matrix below provides a legislative draft of Housing Element Chapter 3: goals, polices, and programs. Each modification is shown in red; modifications based on Planning Commission direction and public comment are shown in blue. Policies are highlighted in gray. # New # Goals Policy/Program Reason for Modification Goal 1 - Safety: Provide safe, decent shelter for all residents. 1.1 1.1 Safety Assist those citizens unable to obtain safe shelter on their own. 1.2 1.2 Safety Support and inform the public about fair housing laws and programs that allow equal housing access for all city residents. 1.3 1.3 Safety Maintain a level of housing code enforcement sufficient to correct unsafe, unsanitary or illegal conditions and to preserve the inventory of safe housing, consistent with City Council’s code enforcement priorities. Updated to be consistent with current code enforcement priorities. 1.4 Safety Assist owners of older residences with information on ways to repair and upgrade older structures to meet higher levels of building safety, efficiency, and sustainability. Per Planning Commission (PC) comments on June 10, 2020, staff is recommending a new policy that supports improvements to older residential structures. 1.4 1.5 Safety Correct unsafe, unsanitary or illegal housing conditions, improve accessibility and energy efficiency and improve neighborhoods by Rehabilitate using Federal, State and local housing funds, such as Community Development Block Grant Funds, with the objectives of 30 single-family, 75 multi-family, 10 historic, and 20 mobile homes for extremely low, very low, low and moderate income homeowners and renters during the planning period. Added language from Program 3.9. The RHNA provides the objectives for the 6th Cycle Housing Element. 1.5 1.6 Safety Continue code enforcement to expedite the removal of illegal or unsafe dwellings, to eliminate hazardous site or property conditions, and resolve chronic building safety problems. 1.6 ----- Safety Consider a Rental Inspection Program to improve the condition of the City’s Housing Stock. In May 2015 the City Council adopted the Rental Housing Inspection Ordinance. In March 2017 the City Council voted to repeal the ordinance. 1.7 1.7 Safety Continue to support local and regional solutions to homelessness by funding supportive programs services, and housing solutions. such as the Maxine Lewis Memorial Shelter and The Prado Day Center. Maxine Lewis Memorial Shelter and the Prado Day Center are now housed within the 40 Prado Homeless Service Center. Page 1 Item 7 Packet Page 64 GENP-0217-2020 & EID-0218-2020 # New # Goals Policy/Program Reason for Modification 1.8 ----- Safety Create an educational campaign for owners of older residences informing them of ways to reduce the seismic hazards commonly found in such structures and encouraging them to undertake seismic upgrades. Unreinforced masonry buildings have been retrofitted to meet current building code requirements. Proactive education is complete because no additional structures need seismic retrofits. Although complete, staff will continue to have information available regarding seismic hazards for those community members interested in further education. Goal 2 - Affordability: Accommodate affordable housing production that helps meet the City’s quantified objectives. 2.1 2.1 Affordability Income Levels For Affordable Housing households. For purposes of this Housing Element, affordable housing is that which is obtainable by a household with a particular income level, as further described in the City’s Affordable Housing Standards. Housing affordable to Extremely Low, Very Low, Low, and Moderate income persons or households shall be considered “deed-restricted affordable housing.” Income levels are defined as follows: ❑ Extremely low 30% or less of County Area median household income ❑ Very low: 31 to 50% of County Area median household income. ❑ Low: 51% to 80% of County Area median household income. ❑ Moderate: 81% to 120% of County Area median household income. ❑ Above moderate: 121% or more of County Area median household income. 2.2 2.2 Affordability Index of Affordability. The Index of Affordability shall be based on the City’s Affordable Housing Standards, updated annually per the County of San Luis Obispo’s Area Median Income determined by California Department of Housing and Community Development. whether the monthly cost of housing fits within the following limits: For extremely low income households, not more than 25% of monthly income. For very low- and low-income households, not more than 25% of monthly income. For moderate income households, not more than 30% of monthly income. For above-moderate income households, no index. These indices may be modified or expanded if the State of California modifies or expands its definition of affordability for these income groups. Updated the policy to have the ability to remain consistent with standardized County data. Page 2 Item 7 Packet Page 65 GENP-0217-2020 & EID-0218-2020 # New # Goals Policy/Program Reason for Modification 2.3 2.3 Affordability For housing to qualify as “deed-restricted affordable” under the provisions of this Element, guarantees must be presented that ownership or rental housing units will remain affordable for the longest period allowed by State law, or for a shorter period under an equity-sharing or housing rehabilitation agreement with the City. The Equity Share Program has a 45- year deed restriction if an owner does not choose to exercise the equity share option. 2.4 2.4 Affordability Encourage housing production for all financial strata of the City's population, as allocated in the proportions shown in the Regional Housing Needs Allocation, for the 2014 – 2019 6th cycle planning period. The number of units per income category are These proportions are: extremely low and income /, 12 percent, very low income, 12 percent 825 units; low income, 16 percent 520 units; moderate income, 18 percent 604 units; and above moderate income, 42 percent 1,405 units. Updated with the new RHNA under the 6th Cycle Housing Element. 2.5 2.5 Affordability Continue to manage the Affordable Housing Fund so that the fund serves as a sustainable resource for supporting affordable housing development. The fund shall serve as a source of both grant funding and below market financing for affordable housing projects; and funds shall be used to support a wide variety of housing types at the following income levels: extremely low, very low, low, and moderate, but with a focus on production efficiency to maximize housing benefits for the City’s financial investment, and to support high quality housing projects that would not be feasible without Affordable Housing Fund support. 2.6 2.6 Affordability Continue to review existing and proposed building, planning, engineering and fire policies and standards as housing developments are reviewed to determine whether changes are possible that could assist the production of affordable housing, or that would encourage preservation of housing rather than conversion to non-residential uses, provided such changes would not conflict with other General Plan policies. Such periodic reviews will seek to remove regulations that have been superseded, are redundant or are no longer needed. 2.7 2.7 Affordability Continue to prioritize implement existing procedures that speed up the processing of applications, construction permits, and water and sewer service priorities for affordable housing projects. City staff and commissions shall give such projects priority in allocating work assignments, scheduling, conferences and hearings. and in preparing and issuing reports and water and sewer service allocations. Updated language to be consistent with City policies and processes. Page 3 Item 7 Packet Page 66 GENP-0217-2020 & EID-0218-2020 # New # Goals Policy/Program Reason for Modification 2.8 ----- Affordability Continue to pursue outside funding sources for the payment of City impact fees so that new dwellings that meet the City’s affordable housing standards can mitigate their facility and service impacts without adversely affecting housing affordability. Reductions have been built into the new fee structure that was approved as a part of AB 1600 in 2018. 2.9 ----- Affordability To the extent outside funding sources can be identified to offset impacts on City funds, exempt dwellings that meet the moderate income, Affordable Housing Standards from planning, building and engineering development review and permit fees, including water meter installation fee. Maintain exemptions for extremely-low, very-low and low-income households. Reductions have been built into the new fee structure that was approved as a part of AB 1600 in 2018. 2.10 2.8 Affordability Continue to coordinate public and private sector actions to encourage the development of housing that meets the City’s housing needs. 2.11 2.9 Affordability Continue to assist with the issuance of bonds, tax credit financing, loan underwriting or other financial tools to help develop or preserve affordable units through various programs. including, but not limited to: (1) below market financing through the SLO County Housing Trust Fund and (2) subsidized mortgages for extremely low, very-low, low- and moderate income persons and first-time home buyers, and (3) self- help or “sweat equity” homeowner housing. Eliminating the examples allows for more opportunities and flexibility to fund affordable housing opportunities. 2.12 2.10 Affordability Consider updating the Affordable Housing Standards to include incorporating Homeowners’ Association (HOA) fees and a standard allowance for utilities in the calculation for affordable rents and home sales prices. Added language based on findings and recommendations from the 2020 Affordable Housing Nexus Study. 2.13 2.11 Affordability In conjunction with the Housing Authority and other local housing agencies, continue to provide on-going technical assistance and education to tenants, property owners and the community at large on the need to preserve at-risk units as well as the available tools to help them do so. 2.14 2.12 Affordability In conjunction with local housing providers and the local residential design community, continue to Continue to provide technical assistance planning services as requested by the public, builders, design professionals and developers regarding design strategies to achieve affordable housing and density bonuses. Updated language to be consistent with City policies and processes. Page 4 Item 7 Packet Page 67 GENP-0217-2020 & EID-0218-2020 # New # Goals Policy/Program Reason for Modification 2.15 2.13 Affordability Update the Inclusionary Housing Ordinance, including Table 2A, based on findings and recommendations in the 2020 Affordable Housing Nexus Study and conduct further feasibility analysis in order to Eevaluate the Inclusionary Housing Ordinance requirements and the effect of Table 2A on the City’s ability to provide affordable housing in the proportions shown in the Regional Housing Needs Allocation, per Policy 2.4. Added language based on findings and recommendations from the 2020 Affordable Housing Nexus Study. 2.16 ----- Affordability The City will evaluate and consider including a workforce level of affordability in its Affordable Housing Standards to increase housing options in the City for those making between 121 percent and 160 percent of the San Luis Obispo County median income. This affordability category cannot be used to meet inclusionary housing ordinance requirements and is not eligible for City Affordable Housing Funds. Creating a workforce level of affordability was examined and found that it could not be successfully implemented on a citywide basis as there are no existing State standards for such an income level. 2.17 2.14 Affordability Continue to consider support increasing residential densities above state density bonus allowances for projects that provide housing for extremely low, very low and extremely low income households. Reordered wording. 2.15 Affordability Evaluate a flexible density pilot program and initiate an update of the Zoning Regulations and Community Design Guidelines to incorporate flexible density development options in Downtown Core and portions of Upper Monterey and Mid-Higuera Special Focus Areas to support the production of smaller residential units (150 to 600 square feet). This program was recommended in part by input from the community and the work program associated with the Housing Major City Goal. The community and Council identified that the Downtown and portions of Upper Monterey and Mid-Higuera Special Focus Areas could be appropriate for higher density housing development. Goal 3 - Housing Conservation: Conserve existing housing and prevent the loss of safe housing and the displacement of current occupants. 3.1 3.1 Housing Conservation Continue to encourage the rehabilitation, remodeling or relocation of sound or rehabitable housing rather than demolition. Demolition of non-historic housing may be permitted where conservation of existing housing would preclude the achievement of other housing objectives or adopted City goals. 3.2 3.2 Housing Conservation Discourage the removal or replacement of housing affordable to extremely low, very-low, low- and moderate income households, and avoid permit approvals, private development, municipal actions or public projects that remove or adversely impact such 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 Page 5 Item 7 Packet Page 68 GENP-0217-2020 & EID-0218-2020 # New # Goals Policy/Program Reason for Modification 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) removal or replacement will not adversely affect housing which is already designated, or is determined to qualify for designation as a historic resource. 3.3 ----- Housing Conservation Encourage seismic upgrades of older dwellings to reduce the risk of bodily harm and the loss of housing in an earthquake. All multi-family structures have been retrofitted and single-family residences are exempt from seismic retrofits. Additionally, any upgrades to older residential structures is now covered in the proposed new Policy 1.4. 3.4 3.3 Housing Conservation Encourage the construction, preservation, rehabilitation or expansion of residential hotels, group homes, integrated community apartments, and single-room occupancy dwellings. 3.5 3.4 Housing Conservation Preserve historic homes and other types of historic residential buildings, historic districts and unique or landmark neighborhood features. 3.6 ----- Housing Conservation Preserve the fabric, amenities, yards (i.e. setbacks), and overall character and quality of life of established neighborhoods. Moved to Goal 7: Neighborhood Quality & Design and is now Policy 7.9. 3.7 3.5 Housing Conservation Encourage and support creative strategies for the rehabilitation and adaptation and reuse of residential, commercial, and industrial structures for housing. 3.8 ----- Housing Conservation Adopt an ordinance that implements policy 3.2 to discourage removal or replacement of affordable housing. Affordable housing units are protected by the State of California Housing Accountability Act, SB 330 (see Policy 3.2), and the “no net loss” requirements of SB 166. An ordinance is no longer required. 3.9 ----- Housing Conservation Correct unsafe, unsanitary or illegal housing conditions, improve accessibility and energy efficiency and improve neighborhoods by collaborating with agencies offering rehabilitation programs. City will use State or Federal grants or other housing funds to implement the program and provide services such as home weatherization, repair and universal access improvements. Consolidated this program by adding the first sentence to Policy 1.4 which provides a broader context to support all housing including the preservation of existing housing. Page 6 Item 7 Packet Page 69 GENP-0217-2020 & EID-0218-2020 # New # Goals Policy/Program Reason for Modification 3.10 3.7 Housing Conservation Continue to encourage the creation of dwellings in the Downtown Core (C-D Zone) and the Downtown Planning Area by continuing the "no net housing loss" program, consistent with Chapter 17.86 17.142 (Downtown Housing Conversion Regulations) of the Zoning Regulations. Updated to be consistent with Zoning Regulations update. 3.11 3.8 Housing Conservation Continue to identify residential properties and districts eligible for local, State or Federal historic listing in accordance with guidelines and standards to help property owners repair, rehabilitate and improve properties in a historically and architecturally sensitive manner. 3.12 3.9 Housing Conservation Continue to monitor and track affordable housing units at-risk of being converted to market rate housing annually. Provide resources to support the Housing Authority, and local housing agencies, purchase and manage at-risk units. 3.13 3.10 Housing Conservation Working with non-profit organizations, faith- based organizations, or the Housing Authority of the City of San Luis Obispo, the City will encourage rehabilitation of residential, commercial or industrial buildings to expand extremely low, very-low, low or moderate income rental housing opportunities. Goal 4 - Mixed-Income Housing. Preserve and accommodate existing and new mixed income neighborhoods and seek to prevent neighborhoods or housing types that are segregated by economic status. 4.1 4.1 Mixed-Income Housing Within newly developed neighborhoods, housing that is affordable to various economic strata should be intermixed rather than segregated into separate enclaves. The mix should be comparable to the relative percentages of extremely low, very-low, low, moderate and above-moderate income households in the City’s quantified objectives. 4.2 4.2 Mixed-Income Housing 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 size, appearance, and basic quality to market-rate units. 4.3 4.3 Mixed-Income Housing Extremely-low and very low-income housing, such as that developed by the Housing Authority of the City of San Luis Obispo or other housing providers, may be located in any zone that allows housing, and should be dispersed throughout the City rather than concentrated in one neighborhood or zone. Page 7 Item 7 Packet Page 70 GENP-0217-2020 & EID-0218-2020 # New # Goals Policy/Program Reason for Modification 4.4 4.4 Mixed-Income Housing In its discretionary actions, housing programs and activities, the City shall affirmatively further fair housing and promote equal housing opportunities for persons of all economic segments of the community. 4.5 4.5 Mixed-Income Housing Review new development proposals for compliance with City regulations and revise projects or establish conditions of approval as needed to implement the mixed-income policies. 4.6 4.6 Mixed-Income Housing Consider aAmending the City’s Inclusionary Housing Ordinance and Affordable Housing Incentives to require that affordable units in a development be of similar size, number of bedrooms, character and basic quality as the nonrestricted units in locations that avoid segregation of such units including equivalent ways to satisfy the requirement. Also evaluate adjusting the City’s allowable sales prices for deed-restricted affordable units per a variety of unit types. Added language based on findings and recommendations from the 2020 Affordable Housing Nexus Study. Goal 5 - Housing Variety and Tenure. Provide variety in the location, type, size, tenure, and style of dwellings. 5.1 ----- Housing Variety Encourage the integration of appropriately scaled, special needs housing into developments or neighborhoods of conventional housing. AB 101 allows this type of housing in all zones and there is limited ability control scale and design. 5.2 5.1 Housing Variety Encourage mixed-use residential/commercial projects in all commercial zones, especially those close to activity centers where compatible with existing and planned surrounding development. to include live-work and work-live units where housing and offices or other commercial uses are compatible. Combined with Policy 5.3 to form one policy that encourages mixed-use development, consistent with the Zoning Regulations update which no longer identifies live/work or work/live units separately from mixed-use. 5.3 ----- Housing Variety Encourage the development of housing above ground-level retail stores and offices to provide housing opportunities close to activity centers and to use land efficiently. See above. 5.4 5.2 Housing Variety New planned In general, housing developments of twenty (20) or more units should provide a variety of dwelling types, sizes and styles or forms of tenure. 5.3 Housing Variety Encourage the development of a variety of “missing middle” housing types. This new policy is based on community feedback and the work program associated with the Housing Major City Goal to address the need for more housing. Missing middle housing types include duplexes, triplexes, quadplexes, cottages, etc. Policy 5.4 also replaces Program 2.16 which discusses workforce housing. Page 8 Item 7 Packet Page 71 GENP-0217-2020 & EID-0218-2020 # New # Goals Policy/Program Reason for Modification 5.5 ----- Housing Variety Review new developments for compliance with City regulations and revise projects or establish conditions of approval as needed to implement the housing variety and tenure policies. Updated language to be consistent with City policies and processes. 5.4 Housing Variety Evaluate opportunities for promoting “missing middle” housing types (e.g. duplex, triplex, quadplex, cottages, etc) to increase housing options in the City. New program to implement new Policy 5.3. 5.5 Housing Variety Consider amending the Zoning Regulations to streamline the permitting process for mixed-used projects in commercial zones. New program to support Policy 5.1. Goal 6 - Housing Production. Plan for Facilitate the production of new housing to meet the full range of community housing needs. 6.1 6.1 Housing Production Consistent with the growth management portion of its Land Use Element and the availability of adequate resources, the City will plan to accommodate up to 3,354 dwelling units for the 6th cycle housing element update in accordance with the assigned Regional Housing Needs Allocation.1,144 dwelling units between January 2014 and June 2019 in accordance with the assigned Regional Housing Needs Allocation. Updated to be consistent with the 6th Cycle RHNA. 6.2 ---- Housing Production New commercial developments in the Downtown Core (C-D Zone) shall include housing, unless the City makes one of the following findings: Housing is likely to jeopardize the health, safety or welfare of residents or employees; or The property’s shape, size, topography or other physical factor makes construction of new dwellings infeasible. Updated to be consistent with Zoning Regulations update. The Zoning Regulations require housing as a part of any development within the downtown. 6.3 6.2 Housing Production If City services must be rationed to development projects, residential projects will be given priority over non-residential projects. As required by SB 1087, Housing affordable to lower income households will be given first priority. 6.4 6.3 Housing Production City costs of providing services to housing development will be minimized. Other than for existing housing programs encouraging housing affordable to extremely low, very-low and low income persons, the City will not make new housing more affordable by shifting costs to existing residents. 6.5 6.4 Housing Production When sold, purchased, or redeveloped for public or private uses, City-owned properties within the urban reserve shall include housing as either a freestanding project or part of a mixed-use development where land is suitable and appropriate for housing. Page 9 Item 7 Packet Page 72 GENP-0217-2020 & EID-0218-2020 # New # Goals Policy/Program Reason for Modification 6.6 ----- Housing Production Property located behind the former County General Hospital shall be designated a “Special Considerations” zone and may be considered suitable for residential development after further analysis and environmental review, provided that development be limited to site areas with average slopes of less than 20 percent, that approximately one-half of the total site area be dedicated for open space and/or public use, and that an additional water tank be provided if determined necessary to serve new development. Completed as a part of the LUE update as part of the special focus areas section; Program 8.6. General Hospital Site. 6.7 6.5 Housing Production Support the redevelopment of excess public and private utility properties for housing where appropriately located and consistent with the General Plan. 6.8 6.6 Housing Production Consistent with the City’s goal to stimulate higher density infill where appropriate in the Downtown Core (C-D Zone), Upper Monterey, and Mid-Higuera Special Focus Areas,, the City shall consider changes to the Zoning Regulations that would allow for flexible density standards that support the development of smaller apartments and efficiency units. This policy was updated to encourage additional residential units not only in Downtown, but in Upper Monterey and Mid-Higuera Special Focus Areas consistent with the City’s Major City Goal work program and new Program 2.15. 6.9 6.7 Housing Production Encourage and support employer/employee financing programs and partnerships to increase housing opportunities specifically targeted towards the local workforce. Revised language allows for more flexibility and creativity to implement the policy. 6.10 6.8 Housing Production To help meet the 6th cycle RHNA production targets Quantified Objectives, the City will support residential infill development and promote higher residential density where appropriate. Updated to be consistent with the 6th Cycle RHNA. ----- 6.9 Housing Production Specific plans for any new area identified shall include R-3 and R-4 zoned land to ensure sufficient land is designated at appropriate densities to accommodate the development of extremely low-, very low- and low-income dwellings. Converted Program 6.14 into a policy. 6.11 6.10 Housing Production Maintain the General Plan and Residential Growth Management Regulations (SLOMC 17.88144) exemption for new housing in the Downtown Core (C-D zone), accessory dwelling units (ADUs), and new housing in other zones that is enforceably for deed-restricted for extremely-low, very low, low- and moderate income households, pursuant to the Affordable Housing Standards. Updated to be consistent with Zoning Regulations update. Page 10 Item 7 Packet Page 73 GENP-0217-2020 & EID-0218-2020 # New # Goals Policy/Program Reason for Modification 6.12 6.11 Housing Production Continue to allow flexible parking regulations for housing development, especially in the Downtown Core (C-D Zone), including the possibilities of flexible use of city parking facilities by Downtown residents, where appropriate, and reduced or no parking requirements where appropriate guarantees limit occupancies to persons without motor vehicles or who provide proof of reserved, off-site parking. Such developments may be subject to requirements for parking use fees, use limitations and enforcement provisions. 6.13 6.12 Housing Production Continue to develop incentives to encourage additional housing in the Downtown, Upper Monterey, and Mid-Higuera Special Focus Areas Downtown Core (C-D Zone), particularly in mixed-use developments. Density based on flexible density average unit size in a project should be explored to encourage the development of smaller efficiency units. Modified to be consistent with Policy 6.6. 6.14 ---- Housing Production Specific plans for any new expansion area identified shall include R-3 and R-4 zoned land to ensure sufficient land is designated at appropriate densities to accommodate the development of extremely low, very-low and low income dwellings. These plans shall include sites suitable for subsidized rental housing and affordable rental and owner-occupied dwellings, and programs to support the construction of dwellings rather than payment of in-lieu housing fees. Such sites shall be integrated within neighborhoods of market-rate housing and shall be architecturally compatible with the neighborhood. Converted to Policy 6.9. 6.15 6.13 Housing Production Consider General Plan amendments to rezone commercial, manufacturing or public facility zoned areas for higher-density, infill or mixed- use housing where compatible with surrounding development land development patterns are suitable and where impact to Low-Density Residential areas is minimal. For example, areas to be considered for possible rezoning include, but are not limited to the following sites: A. Portions of South Broad Street Corridor and Little Italy area B. 1499 San Luis Drive (rezone vacant and underutilized School District property) C. 1642 Johnson Avenue (vacant School District property) D. 4325 South Higuera Street (former P.G.&E. yard) E. 4355 Vachell Lane (vehicle storage) Updated to remove sites that have been developed and added new sites that may be considered for additional housing development. New language added per the recommendation of the PC at the June 10, 2020 meeting. Page 11 Item 7 Packet Page 74 GENP-0217-2020 & EID-0218-2020 # New # Goals Policy/Program Reason for Modification F. 173 Buckley Road (Avila Ranch) G. 2143 Johnson Avenue (adjacent to County Health Department) H. 3710 Broad Street (Plumbers and Steamfitters Union) I. 11950 Los Osos Valley Road (Pacific Beach High School) J. 2500 Block of Boulevard Del Campo (adjacent to Sinsheimer Park) K. 12165 & 12193 Los Osos Valley Road (adjacent to Home Depot) L. 1150 & 1160 Laurel Lane (Atoll Business & Technology Center) M. 600 Tank Farm Road (Temporary Unimproved Parking Area) N. 12500 Los Osos Valley Road (053-141-013) (Agricultural fields and San Luis Creek) O. Los Osos Valley Road (053-161-020) (Agricultural fields and San Luis Creek) 6.16 6.14 Housing Production Continue to provide resources that support the SLO County Housing Trust fund’s efforts to provide below market financing and technical assistance to affordable housing developers as a way to increase affordable housing production in the City of San Luis Obispo. 6.17 6.15 Housing Production Encourage residential development through infill development and densification within City Limits and in designated expansion areas over new annexation of land. 6.18 6.16 Housing Production Seek opportunities with other public and private agencies to identify excess, surplus, ans underutilized parcels for residential development. and public utilities to identify, assemble, develop, redevelop and recycle surplus land for housing, and to convert vacant or underutilized public, utility or institutional buildings to housing. Consistent with new State law. 6.19 6.17 Housing Production Continue to incentivize affordable housing development consistent with SLOMC (Affordable Housing Incentives). with density bonuses, parking reductions and other development incentives, including City financial assistance. Simplified as the requirements are outlined in the City’s Municipal Code. Reference to City financial assistance was removed because it is not a “development incentive.” 6.20 6.18 Housing Production Continue to financially assist in the development of housing affordable to extremely low, very-low, low- or and moderate income households during the planning period using State, Federal and local funding sources, with funding priority given to projects that result in the maximum housing benefits for the lowest household income levels. Page 12 Item 7 Packet Page 75 GENP-0217-2020 & EID-0218-2020 # New # Goals Policy/Program Reason for Modification 6.21 6.19 Housing Production Actively seek new revenue sources, including State, Federal and private/non-profit sources, and financing mechanisms to assist with development of affordable housing affordable to development for extremely low, very low and low or moderate income households and first- time homebuyers. 6.22 ---- Housing Production Continue to exempt the rehabilitation or remodeling of up to 4 dwellings of up to 1200 square feet each from Architectural Review Commission review. New multi-unit housing may be allowed with “Minor or Incidental” or staff level architectural review, unless the dwellings are located on a sensitive or historically sensitive site. Implemented. Section 17.106.030 has been added to the 2018 Zoning Regulations update which references SLOMC Chapter 2.48 that includes language that exempts the rehabilitation or remodeling of up to 4 dwellings of up to 1,200 square feet each from Architectural Review Commission review. 6.23 ----- Housing Production Assist in the production of affordable housing by identifying vacant or underutilized City-owned property suitable for housing, and dedicate public property, where feasible and appropriate for such purposes, as development projects are proposed. Implemented. Staff completed an inventory of City-owned property and found that no City-owned properties are suitable for housing. 6.24 ----- Housing Production Community Development staff will proactively provide information for properties suitable for housing as identified in the Land Use and Housing Elements. Implemented. Staff actively provides information regarding any land identified in the Housing Element or the Land Use Element that may be suitable for housing development possibilities. 6.25 ----- Housing Production Evaluate and consider amending the General Plan to designate the 46 acres associated with the former County General Hospital as a “Special Considerations” zone, suitable for housing development on areas of the site of less than 20 percent average slope, provided that open space dedication and public improvements are part of the project. Completed. The Land Use Element was updated in 2015 to include Program 8.6 which identified the General Hospital site as a Special Planning Area. 6.26 6.20 Housing Production Continue to update the Affordable Housing Incentives (Chapter 17.90140, SLOMC) and Zoning Regulations to ensure density bonus incentives are consistent with State Law. Updated to be consistent with Zoning Regulations update. 6.27 ----- Housing Production Evaluate and consider increasing the residential density allowed in the Neighborhood- Commercial (C-N), Office (O) and Downtown Commercial (C-D) zoning districts. The City will evaluate allowing up to 24 units per acre in the C- N and O zones, and up to 72 units per acre in the C-D zone, twice the current density allowed in these areas. A detailed analysis of increasing the residential density allowed in various zoning districts was considered and evaluated as a part of the zoning update and determined that it would need to be part of a larger update to the Land Use Element (LUE) and require additional environmental review. Page 13 Item 7 Packet Page 76 GENP-0217-2020 & EID-0218-2020 # New # Goals Policy/Program Reason for Modification 6.28 ----- Housing Production Evaluate how lot patterns (i.e. size, shape, slope) in the City’s multi-family zones affect the City’s ability to meet housing production policies. If warranted, consider setting a minimum number of dwellings on each legal lot in the R-2, R-3 and R-4 zones, regardless of lot size, when other property development standards, such as parking, height limits and setbacks can be met. Implemented. In 2018 the Zoning Regulations were updated to include minimum number of dwellings on each legal lot in the R-2, R-3 and R-4 zones, regardless of lot size as long as the development can meet all property development standards, such as parking, height limits and setbacks. 6.29 ----- Housing Production Continue to pursue incentives to encourage development of Secondary Dwelling Units (SDUs). Possible incentives include SDU design templates, flexible development standards, fee reductions or deferrals, or other measures to encourage the construction of SDUs where allowed by zoning. Implemented. The City updated the Zoning Regulations in 2018 and 2020 to be consistent with State law regarding SDUs (now called ADUs – Accessory Dwelling Units). In addition, the City has also eliminated impact fees requirements for ADUs. 6.30 6.21 Housing Production Evaluate and consider updating adopting the Subdivision and Zoning Regulations changes to support small lot subdivisions, ownership bungalow court development Eliminate the one acre minimum lot area for PD overlay zoning, and other alternatives to conventional subdivision design. The Zoning Regulations were updated in 2018 and included a revision to the PD overlay zoning to allow a minimum of one-half of a contiguous acre for a PD (as opposed to a one acre minimum). 6.31 ----- Housing Production Consider scaling development impact fees for residential development based on size, number of bedrooms, and room counts. Completed as a part of the AB 1600 and fee schedule update. 6.32 6.22 Housing Production Continue to submit annual the Housing Element Annual Progress Reports (APR) to the State Department of Housing and Community Development and the Governor’s Office of Planning and Research on or before April 1st of each year for the prior calendar year, pursuant to per Government Code Section 65400. Goal 7 - Neighborhood Quality. Maintain, preserve and enhance the quality and livability of neighborhoods. encourage neighborhood stability and owner occupancy, and improve neighborhood appearance, function and sense of community. Modified to provide focus on neighborhood quality, amenities, and access and less on specific tenure. Where projects propose home ownership, Goal 10: Local Preference, outlines policies and programs to support local home ownership. 7.1 7.1 Neighborhood Quality Within established neighborhoods, new residential development should shall be of compatible design character, size, density and quality that respects the existing neighborhood character, to enhance and maintains the quality of life for existing and future residents. Reworded for consistency with state law. Page 14 Item 7 Packet Page 77 GENP-0217-2020 & EID-0218-2020 # New # Goals Policy/Program Reason for Modification 7.2 7.2 Neighborhood Quality Higher density housing should maintain high quality standards for unit design, privacy, security, on-site amenities, and public and private open space. Such standards should be flexible enough to allow innovative design solutions. in special circumstances, e.g. in developing mixed- use developments or in housing in the Downtown Core. 7.3 ----- Neighborhood Quality Within established neighborhoods, housing should not be located on sites designated in the General Plan for parks or open space. Covered by polices within the Conservation and Open Space Element and the Land Use Element. 7.4 7.3 Neighborhood Quality Within expansion areas, New residential developments should incorporate be an integral part of an existing neighborhood or should establish a new neighborhood, with pedestrian and bicycle linkages that provide direct, convenient and safe access to adjacent neighborhoods, schools, parks, and shopping areas. The City no longer has any areas that are considered “expansion areas.” The Policy should apply to all new residential projects. 7.5 7.4 Neighborhood Quality Discourage the creation of walled-off or physical separations between residential enclaves, or of separate, unconnected tracts to enhance, is discouraged because physical separations prevent the formation of safe, walkable, and enjoyable neighborhoods. Reworded for clarity. 7.6 7.5 Neighborhood Quality Housing should shall be sited to enhance safety along neighborhood streets and in other public and semi-public areas. 7.7 7.6 Neighborhood Quality The physical design of neighborhoods and dwellings should promote walking and bicycling and preserve open spaces and views. 7.8 7.7 Neighborhood Quality Continue to encourage strategies and programs that increase long-term residency and stabilization in neighborhoods. ---- 7.8 Neighborhood Quality Preserve the fabric, amenities, yards (i.e. setbacks), and overall character and quality of life of established neighborhoods. Policy 3.6 was moved to Goal 7 as it better relates to Neighborhood Quality than Housing Conservation. ---- 7.9 Neighborhood Quality Encourage neighborhood design elements that improve overall health of residents such as providing safe and convenient opportunities to access healthy food and attractive places for recreational exercise. This is a new policy that has been added as recommended by the Planning Commission to address public health and housing. Page 15 Item 7 Packet Page 78 GENP-0217-2020 & EID-0218-2020 # New # Goals Policy/Program Reason for Modification 7.9 7.10 Neighborhood Quality Continue to utilize a diverse range of outreach methoods implement varied strategies, including such as early notification through email notifications electronic media, the City’s website and social media accounts improvements, and neighborhood outreach meetings, etc., to ensure residents are aware of and able to participate in planning decisions affecting their neighborhoods early in the planning process. Updated to be consistent with current requirements and policies. 7.10 7.11 Neighborhood Quality Continue to work directly with neighborhood groups and individuals to address concerns pertaining to Identify specific neighborhood needs, problems, trends and opportunities for physical improvements. 7.11 7.12 Neighborhood Quality Continue to fund neighborhood improvements, including parks, sidewalks, traffic calming devices, crosswalks, parkways, street trees and street lighting to improve aesthetics, safety and accessibility. 7.12 ----- Neighborhood Quality Continue to develop and implement neighborhood parking strategies, including parking districts, to address the lack of on- and off-street parking in residential areas. Implemented. The City has a process where Neighborhood Parking Districts can be created. The City has also been working on the creation of demand-based parking strategies. 7.13 7.13 Neighborhood Quality Continue the City’s Neighborhood Services and proactive enforcement Code Enforcement programs to support neighborhood wellness. ---- 7.14 Neighborhood Quality Encourage new developments with 10 or more residential units be reviewed and scored by the Healthy Communities Work Group prior to submitting a planning application to the City. This is a new program recommended by the Planning Commission to support Policy 7.9. ---- 7.15 Neighborhood Quality Encourage developments with 10 or more residential units to include the following: outdoor visiting and gathering spaces, places to exercise or recreate, and spaces reserved for edible landscape or community gardens. This is a new program recommended by the Planning Commission to support Policy 7.9. Goal 8 - Special Housing Needs. Encourage the creation and maintenance of housing for those with special housing needs. 8.1 8.1 Special Housing Needs Encourage housing development that meets a variety of special needs, including large families, single parents, disabled persons, the elderly, students, veterans, the homeless, or those seeking congregate care, group housing, single-room occupancy or co-housing accommodations, utilizing universal design. Page 16 Item 7 Packet Page 79 GENP-0217-2020 & EID-0218-2020 # New # Goals Policy/Program Reason for Modification 8.2 8.2 Special Housing Needs Preserve manufactured housing or mobile home parks and support changes in these forms of tenure only if such changes provide residents with greater long-term security or comparable housing in terms of quality, cost, and livability. 8.3 ----- Special Housing Needs Encourage manufactured homes in Specific Plan Areas by: A) When the City considers adopting new specific plans, including policies that support owner-occupied manufactured home parks with amenities such as greenbelts, recreation facilities, and shopping services within a master planned community setting. Such parks could be specifically designed to help address the needs of those with mobility and transportation limitations. B) Establishing lot sizes, setback, and parking guidelines that allow for relatively dense placement of manufactured homes within the master planned neighborhood. C) Locating manufactured home parks near public transit facilities or provide public transportation services to the manufactured home parks to minimize the need for residents to own automobiles. Manufactured homes are allowed in all residential zones; applicants have not shown any interest in creating new manufactured home parks. New, higher density development is more efficient and cost effective. The most recent affordable housing projects have all been multi-family apartments. 8.4 8.3 Special Housing Needs Encourage Cal Poly University to continue to develop on-campus student housing to meet existing and future needs and to lessen pressure on City housing supply and transportation systems. 8.5 8.4 Special Housing Needs Strengthen the role of on-campus housing by encouraging Cal Poly University to require freshmen and sophomore students to live on campus. 8.6 8.5 Special Housing Needs Locate fraternities and sororities on the Cal Poly University campus. Until that is possible, they should be located in Medium-High and High- Density residential zones near the campus. 8.7 8.6 Special Housing Needs Encourage Cal Poly University to develop and maintain faculty and staff housing, consistent with the General Plan. 8.8 8.7 Special Housing Needs Disperse special needs living facilities throughout the City where public transit and commercial services are available, rather than concentrating them in one district. Page 17 Item 7 Packet Page 80 GENP-0217-2020 & EID-0218-2020 # New # Goals Policy/Program Reason for Modification 8.9 8.8 Special Housing Needs Support Continue to support regional efforts to address homelessness implement the document “The Path Home: San Luis Obispo County’s 10 Year Plan to End Chronic Homelessness”. Revised to be consistent with current activities and SB 101. 8.10 8.9 Special Housing Needs Encourage a variety of housing types that accommodate persons with disabilities, and promote aging in place, and include amenities such as visiting space, first floor accessibility, etc.including a goal of “visitability” in new residential units, with an emphasis on first-floor accessibility to the maximum extent feasible. Based on community feedback, this policy was revised to highlight that housing for persons with disabilities or aging in place should include amenities that support those living within the units. 8.11 ----- Special Housing Needs Encourage changes to City regulations that would support the special housing needs of disabled persons, including persons with developmental disabilities. Completed. Regulations have been updated to address special housing needs. In addition, the building code is regularly updated to meet State and Federal requirements. 8.12 8.10 Special Housing Needs Assist the homeless and those at risk of becoming homeless by supporting shelters, temporary housing, and transitional housing. and by facilitating general housing assistance. The role of the City is not to place individuals in housing. There are several local non-profits involved with helping people find housing. The City, if contacted, connects people to these local organizations. 8.13 8.11 Special Housing Needs Continue to provide resources that support local and regional solutions to meeting the needs of the homeless and continue to support, jointly with other agencies, shelters and programs, such as Housing First and Rapid Rehousing, for the homeless and for displaced individual and families. women and children. 8.14 8.12 Special Housing Needs Continue to enforce the mobile home rent stabilization program to minimize increases in the cost of mobile home park space rents. 8.15 8.13 Special Housing Needs Continue to look for Support opportunities in specific plan areas within the City suitable for tenant-owned mobile-home parks, cooperative or limited equity housing, manufactured housing, self-help housing, or other types of housing that meets special needs. 8.16 8.14 Special Housing Needs Advocate developing more housing and refurbishing campus housing at Cal Poly University. 8.17 8.15 Special Housing Needs Work with Cal Poly University Administration to secure designation of on-campus fraternity/sorority living groups. Page 18 Item 7 Packet Page 81 GENP-0217-2020 & EID-0218-2020 # New # Goals Policy/Program Reason for Modification 8.18 8.16 Special Housing Needs Jointly develop and implement a student housing plan and Continue to support “good neighbor programs” with Cal Poly State University, Cuesta College, the City and local City residents. The program would seek to improve communication and cooperation between all groups the City and the schools, set on campus student housing objectives and establish clear, effective standards for about student housing in residential neighborhoods. Revised for clarity. 8.19 8.17 Special Housing Needs Provide public educational information at various City Offices, on the City website, and other electronic media platforms the Community Development Department public counter on universal design concepts (i.e. aging in place) for new and existing residential dwellings. Revised for clarity. 8.20 8.18 Special Housing Needs Transitional Housing and Supportive Housing: Continue to allow the establishment of transitional and supportive housing in all zoning districts where residential uses are allowed. Amend the Zoning Regulations to allow homeless shelters, transitional housing and supportive housing (low barrier navigation centers) in all residential zones, areas zoned for mixed-uses, and nonresidential zones permitting multifamily uses without a conditional use permit to be alignment with Government Code Section 65660 (AB 101). Revised to be consistent with State law. 8.21 8.19 Special Housing Needs Continue to look for partnership opportunities with non-profit housing developers and service providers to that can be acquire vacant, blighted, or underutilized properties (land, retail or commercial space, motels, apartments, housing units, mobile home parks) for and conversion into affordable permanent and supportive housing and permanent supportive housing for homeless persons and families. Revised to broaden the opportunities for the City to partner with local non- profit housing developers. 8.22 ----- Special Housing Needs Consider addition of an overlay zone to existing and future mobile home and trailer park sites to provide constructive notice that additional requirements, such as rent stabilization and a mobile home park conversion ordinance may apply. The City’s Municipal Code contains a Mobile Home Park Rent Stabilization Ordinance that applies citywide to all mobile home parks. The Ordinance satisfies this program by protecting owners and renters of mobile homes from unreasonable rent increases. Staff has evaluated that an overlay zone would not provide any additional benefit. Page 19 Item 7 Packet Page 82 GENP-0217-2020 & EID-0218-2020 # New # Goals Policy/Program Reason for Modification 8.23 8.20 Special Housing Needs Continue to seek State, Federal, and local funding sources to encourage the creation and financially assist the development of housing for persons with developmental disabilities. The City will seek grantopportunities for housing construction and rehabilitation specifically targeted for persons with developmental disabilities. Consolidated the wording of this program. No change in the content. 8.24 ----- Special Housing Needs Continue to coordinate with the County, social services providers and non-profit organizations for delivery of existing, improved and expanded services, including case management, drug, alcohol, detoxification, and mental health services. This program is covered in Program 8.21. 8.25 8.21 Special Housing Needs Continue to coordinate engage with the County Department of Social Services, Homeless Services Oversight Council (HSOC), social services providers, and non-profit organizations and Friends of Prado Day Center (FPDC) to identify, evaluate, and implement strategies to reduce the impacts of homelessness on the City. Updated language to be consistent with current organizations and agencies. 8.22 Special Housing Needs Work with other jurisdictions to advocate for State legislation that would: 1) provide funding to help Cal Poly University provide adequate on- campus student housing, and 2) allow greater flexibility for State universities and community colleges to enter into public-private partnerships to construct student housing. Relocated Program 10.6. Goal 9 - Sustainable Housing Site, and Neighborhood Design. Encourage housing that is resource conserving, healthful, economical to live in, environmentally benign, and recyclable when demolished. 9.1 9.1 Sustainable Housing, Site and Neighborhood Design Residential developments should promote sustainability consistent with the Climate Action Plan (CAP) and California Building Energy Efficiency Standards – Title 24 in their design, placement, and functionality use. Sustainability can be promoted through a variety of housing strategies, including the following: A) Maximize use of renewable, recycled-content, and recycled materials, and minimize use of building materials that require high levels of energy to produce or that cause significant, adverse environmental impacts. B) Incorporate renewable energy features into new homes, including passive solar design, solar hot water, solar power, and natural ventilation and cooling. C) Minimize thermal island effects through reduction of heat-absorbing pavement and increased tree shading. Avoid building materials that may contribute to health problems through the release of gasses or glass fibers into indoor air. Updated to be consistent with current City and State policies. Strategies were removed because they are outlined in the CAP and Title 24. Page 20 Item 7 Packet Page 83 GENP-0217-2020 & EID-0218-2020 # New # Goals Policy/Program Reason for Modification D) Design dwellings for quiet, indoors and out, for both the mental and physical health of residents. F) Design dwellings economical to live in because of reduced utility bills, low cost maintenance and operation, and improved occupant health. G) Use construction materials and methods that maximize the recyclability of a building’s parts. Educate public, staff, and builders to the advantages and approaches to sustainable design, and thereby develop consumer demand for sustainable housing. I) City will continue to refer to a sustainable development rating system, such as the LEED or GreenPoint programs when evaluating new development proposals. 9.2 9.2 Sustainable Housing, Site and Neighborhood Design Residential units site, subdivision layouts, and neighborhood designs amenities should be coordinated to support make residential sustainable design work. Some ways to do this include: A) Design subdivisions to maximize solar access for each dwelling and site. B) Design sites so residents have usable outdoor space with access to both sun and shade. C) Streets and access ways should minimize pavement devoted to vehicular use. D) Use neighborhood retention basins to purify street runoff prior to its entering creeks. Retention basins should be designed to be visually attractive as well as functional. Fenced-off retention basins should be avoided. E) Encourage cluster development with dwellings grouped around significantly-sized, shared open space in return for City approval of smaller individual lots. F) Treat public streets as landscaped parkways, using continuous plantings at least six feet wide and where feasible, median planters to enhance, define, and to buffer residential neighborhoods of all densities from the effects of vehicle traffic. Examples were removed as innovative sustainable designs are extensive. 9.3 ----- Sustainable Housing, Site and Neighborhood Design Preserve the physical neighborhood qualities in the Downtown Planning Area that contribute to sustainability. Some ways to do this include: A) Maintain the overall scale, density and architectural character of older neighborhoods surrounding the Downtown Core. B) Encourage the maintenance and rehabilitation of historically designated housing stock. The Historic Preservation Ordinance preserves and protects historic structures and districts. Additionally, the Conservation and Open Space Element includes Policies 3.3.4, 3.3.5, that direct preservation of historic buildings, districts, and neighborhoods. Program 3.6.3 directs construction within historic districts. Page 21 Item 7 Packet Page 84 GENP-0217-2020 & EID-0218-2020 # New # Goals Policy/Program Reason for Modification 9.4 9.3 Sustainable Housing, Site and Neighborhood Design To promote energy conservation and a cleaner environment, Continue to encourage the development of dwellings with energy-efficient designs, utilizing passive and active solar features, and the use of energy-saving techniques that exceed minimums prescribed by State law. 9.5 9.4 Sustainable Housing, Site and Neighborhood Design Actively Continue to promote water conservation through housing and site design to help moderate the cost of housing. 9.6 9.5 Sustainable Housing, Site and Neighborhood Design Support programs that provide financing for sustainable home upgrade projects such as installation of solar panels, heating and cooling systems, water conservation and windows to improve the energy efficiency of the City’s existing housing stock. 9.7 9.6 Sustainable Housing, Site and Neighborhood Design Continue to educate planning and building staff and citizen review bodies on energy conservation issues, including the City’s energy conservation policies and Climate Action Plan. Staff shall work with applicants to achieve the City’s energy conservation goals. 9.8 9.7 Sustainable Housing, Site and Neighborhood Design Continue to provide assurance of long-term solar access for new or remodeled housing and for adjacent properties, consistent with historic preservation guidelines and revise regulations found to be inadequate. 9.9 ----- Sustainable Housing, Site and Neighborhood Design Continue to implement the Water Quality Control Board’s “Post-Construction Stormwater Management Requirements for Development Projects in the Central Coast Region”, to reduce the amount of impermeable surface. Implemented. All development projects are required to include Post- Construction Stormwater Management Requirements as a part of a project application, which allows staff to verify that the project is consistent with the Regional Water Board’s Requirements. 9.10 9.8 Sustainable Housing, Site and Neighborhood Design Implement Climate Action Plan programs that increase the production of “green” housing units and projects and require use of sustainable and/or renewable materials, water and energy technologies (such as, but not limited to solar, wind, or thermal). 9.11 9.9 Sustainable Housing, Site and Neighborhood Design Continue to promote building materials reuse and recycling in site development and residential construction, including flexible standards for use of salvaged, recycled, and “green” building materials. Continue the City’s construction and demolition debris recycling program as described in Chapter 8.05 of the Municipal Code. Page 22 Item 7 Packet Page 85 GENP-0217-2020 & EID-0218-2020 # New # Goals Policy/Program Reason for Modification 9.12 ----- Sustainable Housing, Site and Neighborhood Design Consider incentivizing dwelling units to a minimum size of 150 square feet, consistent with the California Building Code, by reduced impact fees and property development standards. Implemented. The City has implemented a reduction in the impact fees for smaller units with AB 1600 and the fee schedule update. Additionally, ADU requirements have been revised to be consistent with state law and impact fees removed in order to incentivize the development of this type of smaller unit. 9.13 9.10 Sustainable Housing, Site and Neighborhood Design Continue to support Consider participating in financing programs for sustainable home improvements such as solar panels, heating and cooling systems, water conservation and energy efficient windows. Goal 10 - Local Preference. Maximize affordable housing opportunities for those individuals who are employed in business that are located in geographic areas that are customarily included in the City’s annual jobs -housing balance analysis who live or work in San Luis Obispo while seeking to balance job growth and housing supply. Based on community feedback and a need for more housing for local individuals who work in the City or nearby vicinity, Goal 10 has been updated to focus on providing housing for individuals who are employed in business that are located in geographic areas that are customarily included in the City’s annual jobs-housing balance analysis. 10.1 10.1 Local Preference Administer City housing programs and benefits, such as First Time Homebuyer Assistance or affordable housing lotteries, to give preference to individuals as outlined in Policy 10.2. to: 1) persons living or working in the City or within the City’s Urban Reserve, and 2) persons living in San Luis Obispo County. Revised to be consistent with new Policy 10.2. 10.2 ----- Local Preference Cal Poly State University and Cuesta College should actively work with the City and community organizations to create positive environments around the Cal Poly Campus by: A) Establishing standards for appropriate student densities in neighborhoods near Campus; B) Promoting homeownership for academic faculty and staff in Low-Density Residential neighborhoods in the northern part of the City; and C) Encouraging and participating in the revitalization of degraded neighborhoods. This Policy did not address local preference. Supporting housing for employees at Cal Poly, Cuesta, CMC, etc. is covered in Policy 10.2. 10.2 Local Preference Encourage, and where legally allowed, require new housing development to give preference in the following order: 1) individuals who are employed in business that are located in geographic areas that are customarily included in the City’s annual jobs-housing balance analysis, 2) individuals residing in the County, and 3) finally to individuals from outside the County. This new policy sets preferences for new, for-sale housing developments in the initial offering and sales to improve the City’s jobs-housing balance, reduce competition from outside buyers and allow those that work in the City the opportunity to live in the City, thereby reducing commute times. Page 23 Item 7 Packet Page 86 GENP-0217-2020 & EID-0218-2020 # New # Goals Policy/Program Reason for Modification 10.3 Local Preference Continue to work with the County of San Luis Obispo for any land use decisions that create significant expansion of employment in the unincorporated areas adjacent to the City to mitigate housing impacts on the City. 10.4 Local Preference Encourage residential developers to sell or rent their projects to those residing or employed in the City first before outside markets. Added to implement Policy 10.2. 10.5 Local Preference Work with Cal Poly to address the link between enrollment and the expansion of campus housing programs at Cal Poly University to reduce pressure on the City's housing supply. This program is covered in Program 8.16. 10.6 Local Preference Work with other jurisdictions to advocate for State legislation that would: 1) provide funding to help Cal Poly University provide adequate on- campus student housing, and 2) allow greater flexibility for State universities and community colleges to enter into public-private partnerships to construct student housing. Relocated under Goal 8 as Program 8.22. Goal 11 - Suitability. Develop and retain housing on sites that are suitable for that purpose. Policies and programs within Goal 11 are covered by the other Goals of the Housing Element, the Housing Major City Goal, the Conservation and Open Space Element, the Land Use Element, and the Safety Element. 11.1 Suitability Where property is equally suited for commercial or residential uses, give preference to residential use. Changes in land use designation from residential to non-residential should be discouraged. 11.2 Suitability Prevent new housing development on sites that should be preserved as dedicated open space or parks, on sites subject to natural hazards such as unmitigable geological or flood risks, or wild fire dangers, and on sites subject to unacceptable levels of man-made hazards or nuisances, including severe soil contamination, airport noise or hazards, traffic noise or hazards, odors or incompatible neighboring uses. 11.3 Suitability The City will continue to ensure the ability of legal, non-conforming uses to continue where new development is proposed. Page 24 Item 7 Packet Page 87 Page intentionally left blank. Item 7 Packet Page 88 REVIEW OF THE 6TH CYCLE HOUSING ELEMENT UPDATE AND ANEGATIVE DECLARATION OF ENVIRONMENTAL IMPACT1September 1, 2020 Recommendation1.Consider the Planning Commission recommendation to adopt aResolution approving the Housing Element Update and the changesincorporated into the Housing Element based on PlanningCommission direction; and2.Direct staff to make updates to the Housing Element, consistent withfeedback provided by the Planning Commission and the State’sDepartment of Housing and Community Development (HCD); and3.Authorize staff to continue to work with HCD to ensure that thedocument fully complies with its guidelines; and4.Direct staff to return to the City Council for final approval of theHousing Element, following HCD’s determination that it fully complieswith State law and HCD guidelines.2 Housing Successes, 2014-20193Implemented 17 programs within the current Housing Element.Issued 1,544 new residential building permits, over 200 werenew deed-restricted affordable units.Supported the preservation and rehabilitation of 279 existingdeed restricted affordable housing units.Strong partnerships with local non-profits have resulted in thedevelopment and maintenance of affordable housing.The long-term planning has facilitated the framework forimplementing new specific plan and development areas to helpmeet current and future housing needs. Housing Element Update4The City’s Housing Element update is due to HCD byDecember 31, 2020.Moving from a 5-year cycle to an 8-year cycle planningperiod.The City is required to develop programs designed to meetits share of the surrounding region’s housing needs for allincome groups.The City has been allotted a RHNA of 3,354 housing unitsto plan for in the new 6th Cycle Housing Element. Regional Housing Needs Allocation5 6Regional Housing Needs AllocationIncome Level(% of County Median Income)6th Cycle RHNAExtremely Low & Very Low825Low 520Moderate 603Above Moderate 1,406Total Units 3,354Income Level(% of County Median Income)5th Cycle RHNATotal Units PermittedExtremely Low & Very Low285 166Low 179 35Moderate 202 19Above Moderate 478 1,052Total Units 1,144 1,272 Housing and Community Development (HCD)The Housing Element is required to be submitted for reviewand certification by the state of California.If the Housing Element is not certified, the City would beineligible for certain grant funding and could be subject tolawsuits and loss of its land use authority.City staff held a phone conference with HCD to discuss theirreview of the draft Housing Element Update.The City is currently addressing HCD comments as wellas the comments received in a letter from the CaliforniaRural Legal Assistance, Inc. (CRLA).7 Public Engagement8Online Survey – June 8, 2020 – June 24, 2020Chamber of Commerce (Economic Development Committee) – June 4, 2020Economic Vitality Corporation and the Home Builders Association – May 13, 2020Chamber of Commerce (Economic Development Committee) – April 2, 2020Online Survey – December 10, 2019 – January 10, 2020Housing Element Workshop – December 10, 2019Association of Realtors – July 23, 2019 Previous Advisory Body and Council Review9Planning Commission Meeting – July 22, 2020Planning Commission Meeting – June 10, 2020Human Relations Commission Meeting – June 3, 2020Planning Commission Meeting – April 24, 2019Public Forum and City Council Meeting – April 2, 2019 Chapter 3 - Goals, Policies and ProgramsThe core of the Housing Element, however, falls underChapter 3: Goal, Policies and Programs, which providesdirection and a plan for how the City will achieve theaccommodation of 3,354 units as required by HCD.Chapter 3 of the Housing Element has been updated inresponse to public feedback and Planning Commissiondirection.10 Chapter 3 – Program 2.13Update the Inclusionary Housing Ordinance.A Nexus Study was completed in January 2020 andpresented to Council in April 2020.Determined that both residential and commercialdevelopment are creating demand for affordable housingthat is not being met by the housing market.Findings verify that there is a nexus that justifies the Cityhaving an inclusionary housing requirement.11 Chapter 3 – Program 2.15Evaluate a flexible density pilot program within DowntownCore and portions of Upper Monterey and Mid-HigueraSpecial Focus Areas.Allows for more density.Focused on providing smaller, affordable units.12 Chapter 3 – Program 5.413Evaluate opportunities for promoting missing middlehousing types. Regional Vision for HousingSan Luis Obispo depends on collaborative relationshipsbetween and among government agencies, communityorganizations, and residents to respond to the region’sissues.Early this year, local agencies adopted a San Luis ObispoCountywide Regional Compact.Development of the Regional Infrastructure Plan (RegionalPlan).Chapter 4 presents a regional vision and eight policiesfocused specifically on fostering regional collaboration toplan and develop housing and supportive infrastructure.14 Environmental ReviewA Negative Declaration of Environmental Impact isrecommended for the Housing Element Update because thethere is no substantial evidence that the project or any of itsaspects may cause a significant effect on the environment(CEQA Guidelines section 15063(b)(2)).A 30-day public comment period is open from July 9, 2020 toAugust 7, 2020.No public comment was received regarding the NegativeDeclaration.15 Planning Commission ActionThe Planning Commission provided feedback at twomeetings regarding minor revisions to the goals, policies andprograms, including an additional policy and two newprograms to address healthy communities.The Planning Commission unanimously recommended theCity Council adopt the updates to the City’s Housing Elementand Negative Declaration of Environmental Impact.16 Housing Element Next StepsReceive a letter from HCD by the end of the week that includesfindings from their review of the Draft Housing ElementUpdate.Work with HCD on any inconsistencies with State law.Return to the City Council with the final draft of the HousingElement for final adoption.Submit the adopted Housing Element to HCD for certification.17 Recommendation1.Consider the Planning Commission recommendation to adopt aResolution approving the Housing Element Update and the changesincorporated into the Housing Element based on PlanningCommission direction; and2.Direct staff to make updates to the Housing Element, consistent withfeedback provided by the Planning Commission and the State’sDepartment of Housing and Community Development (HCD); and3.Authorize staff to continue to work with HCD to ensure that thedocument fully complies with its guidelines; and4.Direct staff to return to the City Council for final approval of theHousing Element, following HCD’s determination that it fully complieswith State law and HCD guidelines.18 19 Program 1.7Continue to support local and regional solutions tohomelessness by fundingand advocating forsupportiveprograms,services, and housingsolutions. such as the Maxine Lewis MemorialShelter and The Prado Day Center.20 Policy 7.4Discouragethe creation of walled-offor physicalseparations betweenresidential enclaves, or ofseparate, unconnected tractsto enhance, isdiscouraged because physical separations preventthe formation of safe, walkable, and enjoyableneighborhoodsunless warranted by existing siteconstraints or environmental factors.21 Policy 8.4Strengthen the role of on-campus housing byencouraging Cal Poly University to requirefirst yearand second year freshmen and sophomorestudents to live on campus.22 Affordable Housing23 Affordable Housing24 Regional Vision for HousingR-1: Promote awareness and support of regional efforts that further housing and infrastructure resiliency byutilizing community engagement, and consistent and transparent communication.R-2: Encourage an adequate housing supply and resilient infrastructure,services, and resources to improvethe balance of jobs and housing throughout the Region.R-3: Develop inter-agency partnerships as appropriate to implement goals and policies related to housing andinfrastructure.R-4: Coordinate State, Federal, and other funding opportunities for housing and infrastructure developmentthroughout the Region.R-5: Encourage developers to sell newly constructed housing units to individuals residing or employed withinthe area of the development (a city or the County) first before selling to individuals from outside the County, topromote local preference.R-6: Encourage rental units be prioritized for long term residents ratherthan short term users or vacationrentals.R-7: Support housing development that is located within existing communities and strategically planned areas.R-8: Encourage regional collaboration on a menu of housing types, models,and efforts to support streamlinedapprovals for such developments (i.e. Accessory Dwelling Units, etc.).25