Loading...
HomeMy WebLinkAbout05/11/1993 Add-on 1 - Revised Draft Housing Element IIII�i�II�IIIIIII�I Uv� 1 — MEETING DATE: City _ �uIN I► f��� o san Luis ogispo COUNCIL AGENDA REPORT ITEM NUMBER: 2 how: _D FROM: Arnold-Jonas, Community Development D' or, By: Jeff H sp ate Planner SUBJECT: Review of the revised draft Housing Element. CAO RECOMMENDATION: 1) Give direction to staff regarding changes or additions to the Housing Element; and 2) By motion, authorize the Community Development Director to submit the May 1993 revised draft Housing Element incorporating City Council comments to the State Department of Housing and Community Development. SITUATION At its April 6th hearing, councilmembers directed staff to revise the draft housing element, and bring the revised draft back for City Council review at its May 4th hearing. The size, format, and content of the revised draft have been modified to address councilmember's comments, as explained below. Once the revised draft is ready, staff intends to send the draft to the Housing and Community Development Department (HCD) to allow review of the draft for compliance with State law. Completion of the HCD review process should Allow.the City to be in "procedural" compliance with State housing law, whether or not the City chooses to accommodate the Regional Housing Needs Allocation (RANA) set by the San Luis Obispo Area Coordinating Council (COG). ADVISORY BODY RECOMMENDATION At. its May 13, 1992 meeting, the Planning Commission completed its review of the Draft Housing Element update and recommended several changes to the text. The most significant revision dealt with the City's response to "regional housing need" as determined by the COG. Commissioners felt that COG's housing need allocation was unrealistic, and that the updated housing element should reflect the City's current growth management policy which allows for about a 1 percent increase (about 180 dwellings) in the housing stock per year. DISCUSSION The Council directed staff to: acknowledge the RHNA numbers and to reject them, substituting the City's 1 percent growth limit(in keeping with the Planning Commission's recommendation); exclude very-low and low income housing from growth management limits; incorporate Mayor Pinard's goals, policies and programs and Vice-Mayor Roalman's "three points" for housing law compliance; to exclude reference to Ferrini-Foothill neighborhood; and to include only information required by law. The revised housing element is less than one-half the length of the April 1992 Planning Commission hearing draft that councilmembers reviewed on April 6th. It focuses on goals, policies and programs; and analysis is limited to those topics required by state law. ���►��H��Ilfllll I�g��8111 city of san tuts oBispo COUNCIL AGENDA REPORT Staff Report Page 2 Previous discussions of "housing issues and challenges" and city demographics are deleted. Housing production targets now reflect the City's 1 percent growth limit, with qualifying affordable housing exempt from those limits. A section on "quantified housing objectives" has been added, with additional information to explain why the City cannot accommodate the housing need allocation adopted by the COG. Consistent with the 1 percent population growth limit, the Housing Element would accommodate about 1,100 additional dwelling units during the five-year period (1993-1998) covered by the element, and about 1,185 units during the overlapping period covered by the RHNA plan (January 1991 to July 1997). Limited water supply, adequacy of public facilities, and environmental impacts are cited as constraints to the City meeting the COG numbers. Council Review Strategy At this stage, broad council direction on overall housing policies, programs, and housing element format and focus would be most helpful, given the council's desire to expedite HCD review. State law provides for a mandatory 45-day State review period, although HCD officials have,said they would try to expedite review of the City's element at the City's request. HCD's review will focus primarily on quantified housing needs and housing objectives, especially for special groups (ie. handicapped, elderly, homeless, etc.), possibly resulting in the need for additional analysis and or changes to policies or programs to comply with State law. Concurrent with HCD review, staff will bring the goals, policies and programs back to the Council (and possibly, the Planning Commission) for additional study and public hearings. Staff anticipates that a revised council hearing draft which addresses HCD comments will.return for Council in early Summer. Attachment: -Planning Commission minutes Enclosure: -Council Hearing Draft Housing Element, May.1993 A02 P.C. Minutes May 13 , 1992. Page 4 The motion passed. Cindy Clemens explained that if t City was pursuing an enforcement action against the appli ant , the City would have to prove the use was illegal . Howeve , because the applicant fs asking the City to grant him a permit, the applicant had the burden of proving to the Cit at the previous use was legal . DISCUSSION ITEMS ------------------------------------------------------ Item 2. Draft .Housinc Element . The commission will continue to review and comment on the draft Housing Element. -------------------7--------------------------------------------- Jeff Hook presented the staff report and explained the Commission started reviewing the Draft Housing Element on April 27, 1992, at a meeting focusing on regional housing needs. He said the Commission had directed staff to use a one percent growth factor to establish city housing needs because the local Council of Governments ' (COD' s) determination of housing needs was considered too high to achieve due to resource limits . He asked for comments on the goals, pol.icies , and programs of the Draft Housing Element, with the Commission' s focus on consistency with city needs and priorities. He said the City Council would see the draft after the Commission finished its review, and suggested that the Commission take public .comment at this meeting. Mr. Hook explained the State deadline for adoption of a Housing Element is July 1, 1992, and although the Housing Element is not expected to be adopted by that date, staff hopes that the Commission will conclude its review by the end of June so that the draft can be submitted to the State as soon as possible. He said San Luis Obispo is the closest to meeting the time deadline of all the major cities between Monterey and Santa Barbara. However, he said the other cities are either stating they intend to grow at the rate set by the State, or are including the .growth rate set by the State in their housing elements but adding statements. that the growth rate will probably not be met . He _ . said he has been in contact with Ernie Silva, a lobbyist for the League of California Cities. He explained developers, non-profit housing agencies, governmental agencies, architects, and planners were invited to two public meetings for .input on the draft. Commr. Gurnee felt the document was well organized. He expressed concern about sanctions from the State hitting home and mentioned a city in Northern California that is facing losing Park and Recreation funding from the State. He believed contacting the League of Cities was an excellent place to start , especially in October when the League meets regularly. He agreed that not enough was being done to meet housing needs;, , but felt the State' s numbers were unrealistic and impossible to achieve. P.C. Minutes May 13, 1992 Page 5 Commr. Williams said she did not want to wai.t until October and suggested that State representatives from the State Housing and Community Development Department and legislative leaders be asked to come to San Luis Obispo for a community forum. She said if they refused to come to San Luis Obispo, the Commission,. along with some concerned citizens, should go to see them. Commr. Settle believed that a rejection of COD' s regional housing need determination by San Luis Obispo would not affect possible . Federal block grant funding. He said he knew of other cities that have said to 'comply with the rules from this State agency will violate rules of other State agencies and the matter will end up in litigation. He expressed concern that. State interference with the Housing Element was only the beginning and the City Planning Commission could become an agency of the State - unless a pro-active approach is taken now through the League of Cities. Commr. Cross said Kathy Krustwel.l , from the State Housing and Community Development Department said she would be willing to come to San Luis Obispo. He expressed concern that a private citizen could sue the City in court , and the City would be in trouble if the Housing Element was not in conformance. Commr. Peterson agreed with Commr. Williams that action needs to get underway immediately. Chairman Karleskint opened the public hearing. Carla Sanders , 660 Oakridge Drive; said her main concern was that the housing element draft could change San Luis Obispo' s long term growth management planning. She said the State quota of 4,000 is five times the community' s stated goal . She said she had called Mr. Maddy, California State Community Development , and was referred to a Bill Murphy, head of the Public Policy Division, and was told state funds are contingent upon cities accepting state housing needs assessments . She said the State does not consider resources such as water for cities to meet the reasonable share of growth. She said Dana Lilly, a planner with San Luis Obispo County, told her that San Luis Obispo was designated an urban place last year by the Census Bureau, which will make it eligible for federal entitlement block grants. She quoted the follow response from Mr. Lilly, "If San Luis Obispo is entitled to federal block grants , there is no longer a linkage between block grants and the housing element . It is only a problem if you get small city block grant funds . There is no . linkage if a city receives federal entitlement block grants. " When she asked. about the women' s shelter and the homeless shelter funds being tied to the housing element, she said she was also told, "The housing element is not a requirement for award of ESP funds because the emergency shelter is ndt a housing program it is emergency intervention. There is an attempt to keep it P.C. Minutes May 13, 1992 Page 6 from regular housing programs . " She made the following comments on goals: on Page 3, third paragraph from the bottom she felt it. would be important to state that existing urban services should be maintained, not just adequate services so- that it would be clearly stated that San Luis Obispo does not want a decrease in the level of services . She suggested the following wording: "The present level of urban services and air quality will be maintained or improved for the City' s residents . Urban services include water, sewer, schools, police, fire, and road services. " She suggested that the same wording be used on Page 6. She expressed concern about mansionization, large homes going into existing neighborhoods, and asked if they were in the housing element . Jeff Hook said those types of issues were discussed under neighborhood plans and community relations such as on Pages 16 & 18. Carla Sanders felt it would be appropriate to have that type of issue addressed in the General Plan or Land Use Element, rather than ,relying on neighbors to object to developments . Commr. Settle felt that Ms . Sanders suggestion that current levels of services be mentioned in the housing element draft was important. Arnold Jonas said the State' s position is that restriction in services are only a matter of time. For example, he explained _ that if a city' s only scarce resource was water, the State would say it was the City' s responsibility to pursue other sources of water. Jeff Hook suggested that clarification of existing services in the Land Use Element , such as emergency response time in July 1992, could also be incorporated into the draft . He said that the one percent growth rate is primarily based on a quantitive judgment the community has made about its desired character. In answer- to a question by Commr. Williams, Jeff Hook explained •.that the State wants to see programs in place for cities to I .achleve the regional housing needs, but if market needs change and those homes are not built , the State cannot penalize cities. Gonia. Gurnee said the housing need requirements originated under previous Governor Jerry Brown to counteract a city' s ability to control growth at the expense of other communities. He felt the State' s message was not bad, but he believed the numbers set by the State were unreasonable. He warned that sanctions are becoming real in the Bay area. ' He expressed concern that 28 of the 37 policies in the draft depend on General Fund financing. He- supported the idea of asking ;the council. to invite or demand the state representatives to explain the requests and possible P.C. Minutes May 13 , 1992 . Page 7 sanctions . He said providing adequate housing cannot be dismissed simply because the City says it cannot do it. In answer to a question by Commr. Settle, Jeff Hook said the 37 programs in the draft are not prioritized. COMMENTS ON DOCUMENT Page 3, No. 1 .0 : Commr. Williams suggested adding land costs and the availability. of residentially zoned land. Jeff Hook suggested that Commissioners not become involved in the detailed wording of the document , but rather focus comments on. policies and. programs. He added that staff would welcome notes from Commissioners requesting items to be added or deleted from the document . Page 4, 10 . 2: Commr. Gurnee expressed concern that some of the policies require affordable housing .rather than encouraging it by ' incentives . Jeff' Hook explained that staff tried to present a balanced approach because there is a presumption that the City will . require some affordable housing with certain types of new developments. He said if the Commission feels that the City should not have mandatory. affordable housing provisions, that direction should be given to staff. Commr. Settle expressed concern that the elimination of mandatory affordable housing could make other City policies irrelevant and eliminate an opportunity for municipal government to require affordable housing as part of a major development . Commr. Karleskint agreed with Commr. Settle. Commr. Gurnee said he disagreed with Commrs . Settle and Karleskint . He favored eliminating the requirement for affordable housing. 10 . 12 : Commrs. Hoffman and Karleskint felt that more detail was need to clarify the types of services it is important to provide such as schools and fire stations . Commr. Hoffman said those same restrictions should be discussed in 10 . 14 . In answer to a question by Commr. Cross ,- Jeff Hook said low and very low income have been lumped together as low income. In answer to a question by Commr.. Williams, Jeff Hook said Mr. French had submitted a letter suggesting that duplexes be allowed on corner lots to provide affordable housing. He explained that although the idea has not yet been researched, it would be considered.. l P.C. Minutes May 13, 1992 Page 8 Commr. Gurnee suggested that a policy stating the City will work with the San Luis Obispo Area Coordinating Council (COG) and keep up to date on State requirements should be added under housing supply policies . s Commr. Settle expressed concern that other communities see San Luis Obispo as part of the problem. He said he had no objection to working with other cities, but did not believe San Luis Obispo should be linked to other communities ' policies. 10. 14: Commr. Hoffman questioned why a city housing element should address meeting regional county needs as referred to in 10. 14. Commr. Cross suggested including manufactured housing and mobile homes parks as possible affordable housing alternatives. Jeff Hook said it would be appropriate to include it as a goal if the Commission agreed. Commrs. Cross and Hoffman disagreed with the statement about balancing housing supply under housing demand. Commr. Hoffman said balance needs to be defined because San Luis Obispo is a_ job . :center for the County. --, Jeff Hook explained that that issue was discussed later in the ! :.document and suggested the statement be reworded to state that the City will prevent a further imbalance between jobs and ".-housing, by linking housing increases with job growth. The Commission discussed the reference to a joint land use and housing element between the City and the county. Carla Sanders said Dana Lilly told her the City could decide whether to keep its federal entitlement block grants or share the wealth with the county and other cities through joint agreements, which would entitle the county and other cities to federal entitlement block grant funds. Commr. Hoffman said it- would be helpful if the Housing Program titles were the same titles as those for Housing Goals. PROGRAMS - . Exclusionary Housing, Appendix E, Page 125: Commr. Hoffman asked what constituted a project . Jeff Hook said it covered new units and new commercial space. •He said it could cover so called "granny units. " - Commr. Hoffman said that definition was not clear and could be construed to mean any addition to a current building. He P.C. Minutes May 13, 1992 Page 9 expressed concern a 5 percent tax would be required for building a granny unit inside the City and a 15percent in-lieu housing fee would be required for the same granny unit in an expansion area of the City. Commr. Hoffman asked that the term expansion areas be defined. Commr. Gurnee said the 15 percent in-lieu fee would discourage annexation and encourage development in the county. Commr. Karleskint also felt the housing impact fees were high. Jeff Hook said it maybe appropriate for the City to exempt some projects . For example, he said the City could exempt commercial project under 5, 000 square feet , residential developments under _ 10 units, and affordable housing projects from providing housing or paying the in-lieu .fee_ He said at this point the fees apply to all new developments, commercial and residential . Carla Sanders said at a City council meeting she attended, Suzanne Lampert , author of a consultant report on affordable housing strategies, presented a chart showing possible fee schedules. Jeff Hook said on April 15, the City Council discussed affoidable housing and the Mundie Report, which establishes four categories for residential development in the City. The categories allow the option of paying a set affordable housing fee or constructing a percentage of low and moderate income housing which would reduce the affordable housing fee. He began to discuss the affordable housing fees required for commercial development. Commr. Gurnee stepped down due to a conflict of interest and left the meeting. Jeff Hook explained that commercial development creates jobs which in turn increases the demand for housing. He said between 1986 and 1990 , the requirement being discussed would have generated 7 . 1 million dollars for affordable housing. Commr. Williams expressed concern that the source of funding for most projects was listed as coming from. the City' s general fund. Jeff Hook said that it is hoped that in-lieu fees held in a trust fund and entitlement funds could also be used. He explained that the rationale behind listing general fund money as the main source, is that individual project requests would go before the City Council for funding.. Commr. Settle said some housing elements in. other cities mention a fund set aside for .disaster relief . He suggested the draft could allow trust fund money as disaster relief . P.C. Minutes May 13 , 1992 Page 10 Commr.. Hoffman suggested the term time frame should be defined. Commr. Cross questioned what was meant by development standards. .7' Jeff Hook suggested design standards might make the meaning clearer. Page 8 : Carla Sanders asked for a rewording of the statement that the City will amend regulation standards to protect the health, safety, and welfare of residents . She said there are some policies, such as hillside development , which are not covered by health, safety and welfare that citizens value. Jeff Hook explained that the intent was for the City to possibly reduce development standards which were not essential to protect public health, safety or welfare to avoid unnecessary impediments to affordable housing. He suggested keeping language stating the City shall review its regulations and adding "may modify" its regulations . The Commission agreed. Page 11 , 120 . 11 Commr. Hoffman felt this section should be eliminated. Jeff Hook explained the statement was needed to state that t}�e Land Use Element and the capital improvement program would carry, out mentioned polici,es.. He said the word " investment" should be, replaced with the word " improvement . . Commr. Settle suggested the words "will enable" be replaced with "may enable" because the goal might not be possible to reach. He -said he preferred permissive wording to mandatory wording. Commr. Hoffman believed the meaning of the statement was not that the City would achieve it , but would provide the climate in which it would be possible for it to happen. Commr. Settle preferred Commr. Hoffman' s wording. Jeff Hook said the policies are designed to enable the City to leach the goal , but whether that goal is actually achieved depends on many other variables. Commr. Hoffman suggested adding a sentence stating that providing .. - the regulatory climate to meet regional housing needs does not ensure that the City will achieve the goal . Carla Sanders said she agreed with Commr. Settle. Page 12, 120 . 14 : Commr. Settle suggested a rewording stating "The City will review and may amend. " P.C. Minutes May 13 , 1992 Page 11 Commr. Karieskint suggested . the Growth Management Ordinance be referenced in the draft as guiding the growth rate. Jeff Hook explained that the Land Use Element and the Housing Element must , by law and by City policy, be consistent . 7" In response to concerns of Commrs . Hoffman and Settle, Jeff Hook explained the chart on page 14 was included to show a baseline of housing units to coincide with city land zoned currently zoned - residential and areas in expansion areas to be zoned residential in the future. He said the information. in the housing element , was included to meet State law. _ Commr. Settle suggested that a statement be included mentioning that total buildout is not expected to occur during the next five years . _ Commr. Hoffman felt that the wording under Residential , which addresses rezoning to a non-residential use as being only approved as a comprehensive update of the LUE, could lead to the assumption that general • plan amendments would only be evaluated every 10 years . Arnold Jonas suggested rewording the passage. to state any rezoning from residential to another use will require an analysis of the City' s ability to provide housing throughout the City. Commr. Hoffman said he agreed with the rewording. Page 17, Sororities and Fraternities: Commr. Hoffman suggested adding a program whereby the City would work with Cal Poly to dedicate a Greek Row on campus or near Cal Poly. Commr. Settle said that if housing for married students, faculty, and handicapped individuals were included in the discussions about housing for sorority and fraternity members, Cal Poly would be more willing to negotiate with the City for housing on campus. Arnold Jonas agreed. with Commr. Settle. He added that Cuesta College could also be included in discussions . The Commission asked staff to prepare a map showing a one mile .radius 'of Cal Poly. Page 16: Carla Sanders asked that the reference to neighborhood needs be consistent with the wording of neighborhood character needs in the LUE. • Page 19, 20 . 33: Commr. Cross asked how this cost could be accomplished. P.C. Minutes May 13, 1992 Page 12 Commr. Settle said it had been implemented regarding a past proposal for expansion at the California Mens Colony. Commr. Karleskint said a reference to Cuesta College should- be included here, as well as everywhere else Cal Poly is mentioned in the draft . Page 26, 2. 10 : Commr. Cross asked that an increase for Cuesta College be included. Section 5, Page 5: In answer to a question by Commr. Settle, Jeff Hook proposed that staff write a. position paper to the City . Council explaining the issues, presenting the Commission' s recommendation, explaining the possible implications of not meeting the State' s guidelines , -and. explaining alternatives to be considered for staff to receive direction from the City Council . Commr. Settle said that because it was an election year and there would be different in members on the City Council in the Fall , it might not be beneficial to prolong the preparation process by having the City Council review the draft before it is submitted to the State. He expressed concern that the document could become a campaign issue. , Commr. Karleskint agreed with Commr. Settle and felt that the City Council would want to know the State' s response before reviewing the document . Commr. Settle felt that if the document was sent to the State before review by the City council , the burden would be on the State, not the City. Jeff Hook said staff planned to proposesending the document to the State before review by the City Council as an option to the City Council . He said a City Council member had told him that nothing should be sent to the State without the Council ' s review and approval . Commr. Settle suggested that the City Council be informed that the Commission' s intention is to send the draft to the State without City Council review, in time for the City Council to overrule that decision. Jeff Hook said that staff believed it was essential to provide Councilmembers with the background behind the regional housing needs issue and to provide possible alternatives. He also said some planning commissions in other cities are sending drafts or lists of programs to the State before review by their city councils. Arnold Jonas said there was no usual procedure regarding when city councils review this type of draft . He explained that when P.C. Minutes May 13, 1992 Page 13 planning commissions send -drafts directly to the State, city councils then have the benefit of the State' s response to the documents, but other city councils prefer to review documents before submittal to the State. He suggested giving the City Council the option of reviewing the one percent growth rate or postponing review until the State' s response is received. Commr. Karleskint said it might be best for the City Council to support the one percent growth rate before it is sent into the State. He expressed concern that if --the Planning Commission sent the document to the State and the State denied the requested one percent growth rate, the City Council would not be able to say it supported the one percent growth because. it ,would no longer be an option. Page 138 , Regional Housing Needs Assessment : Jeff Hook explained the chart illustrating percentages of low and very low incomes of those needing housing. Chairman Karleskint requested the other Commrs. 'to read through the document and submit written corrections on errors and omissions to Jeff Hook by Friday, May 22, 1992 . In answer to a question by Commr. Settle, Jeff Hook said it 'would` probably be about one month before changes are made and a decision is reached by the City Council as to when it wishes to review the document . Commr. Settle felt it was important to find out the opinion of the City Council . Page 16, Program 23: Commr. Cross expressed concern that conversions , particularly small motels near the freeway, should have rent controls to keep them affordable. Jeff explained that concern had only been addressed in the downtown area, but it could be expanded. Chairman Karleskint closed the public hearing_ COMMENT D DTSCUSSION The Planning Commission retreat was scheduled for Thursday, May 28 ,. 1992 om 7: 00 p.m. to . 11 : 00 p.m. at the Apple Farm. A Planning Commissi study session was scheduled for June_ 8 , 1992 from 4: 00 p.m. to 6: 00 p.m. Commr. Cross d the City Council voted 4-1 to include a requiremen for showers in the Circulation Element . MFMNG AGENDA l .E - ITEM # ������������►�I► ��illllllll@°11 °�� IIII cityof. stuis oBispo _ A ' 990 Palm Street/Post Office Box 8100 • San Luis Obispo, CA 93403-8100 RECEIVED City of San Luis Obispo COPIMTO: MAY 4 1993 Community Development Department E 06 Dwzbas Adim ❑ FYI C==1 ea)D DM CITY COUNCILMEMORANDUM ❑ CAO 11 FIN.DIR. SAN LUIS OBISPO.CA CY ACAO ❑ Finaile ATTO&tiEY ❑ FW DIR. PCLE NC7P G. ❑ POLtCECH TO: San Luis Obispo City Council ❑ C.PEADFLE ❑ LMLDi'L FROM: John Dunn, City Administrative Offic VIA: Arnold Jonas, Community Developmen Director c BY: Jeff Hoo#ciate Planner SUBJECT: Changes to CC hearing draft Housing Element ************************************************************* Attached are revised pages 11, 18, 19, 24, and 35 to be inserted into and reviewed as part of the Council's hearing draft Housing Element: The changes are intended to bring the revised element more closely in line with Council's April 6th direction, dealing with affordable housing exemptions from growth limits and with alternative growth projections. Council had directed staff to include an exemption for "very low" and "low" income housing from residential growth management limits. "Moderate income" was carried forward from a previous Planning Commission policy recommendation. The term "moderate" is now deleted from the exemptions to be consistent with council direction. On pages 18 and 19, a comparison of growth rates was carried forward from the previous April 1992 draft Housing Element. The discussion of all but the 1 percent growth rate has been deleted from this section. On reflection, it appears that the comparison could be interpreted as growth "options" or alternatives that the City was considering when in fact, the "high" and "intermediate" projections were included to underscore the City's contention that the RHNA numbers were unworkable for San Luis Obispo. I hope these changes more accurately reflect the Council's intent, and regret any misunderstanding or difficulty the original passages may have caused. rOr The City of San Luis Obispo is committed to include the disabled in all of its services, programs and activities. V� Telecommunications Device for the Deaf(805) 781-7410. housing supply 'between 1992, and 1997; and will amend the Residential Growth Management Relations to exempt construction of dwelling units which meet the needs of very-low. and to income households-We 2. To add to the city's residential land base, the City will encourage the production of infill housing above compatible street-level commercial uses in various commercial zones. 3. New downtown commercial projects should include housing. 4. Encourage new and creative uses of existing structures for residential purposes. 5. If City service capacity must be rationed to new development, residential projects will be given priority over nonresidential projects. 6. The costs to the City of housing development will be minimized and equitably distributed. The City will not make new housing more affordable by shifting costs to existing housing. [See also Goal 2- Affordability) Programs 1. The City will amend its regulations to encourage mixed residential commercial uses on commercial properties, subject to use permit review by the Planning Commission_, 2. The City will consider applying the mixed-use zone citywide to the C-N (Neighborhood Commercial) Zone to require residential development above street level as new neighborhood commercial facilities are developed. Allowed uses in the zone should be reviewed to preclude commercial uses incompatible with housing: 3. The City will amend its regulations to require that at least one floor of new multi-story commercial buildings in the downtown core shall be for residential use. Parking regulations may be modified, if necessary to make this use feasible. The housing use should require no separate level of review beyond that required for the project of which it is a part. 4. For major residential expansion areas, the City will adopt specific plans. These plans will include sites suitable for subsidized rental housing and affordable rental and owner- occupied housing. Such sites shall be integrated within neighborhoods of market rate housing and shall be architecturally compatible with the neighborhood. The specific plans will designate sufficient areas at appropriate densities to accommodate the types of dwellings which would be affordable, in the proportions called for bythe affordable housing policies of this Element. Also, the specific plans will include programs to assure that the affordable dwellings will actually be produced. As the capacities of city services become sufficient to support development of one or more of the major residential 11 H. BACKGROUND DATA/HOUSING LAW REQUIREMENTS 2.00 Population and Housing Need The City's estimated population is 42,480 (California Department of Finance, January 1992). Between 1980 and 1990 the City grew by 7,706 persons, an increase of 22 percent. The City's average annual population growth during this period was 2.2 percent -- slightly less than-the statewide average of 2.53 percent, and much less than the County's average annual growth rate of 3.97 percent. Analysis of 1980 Census data and State Department of Finance population estimates indicates that population growth in the City has been primarily due to net migration to the housing market area -- mainly from Southern California. City residents comprise about 20 percent of the County's total population. Based on the General Plan, the City's population is expected to increase at about one percent annual until it reaches its buildout population of 54,900 persons in 2017. After that, annual population growth is expected to slow to one-half percent or less. During the 1980s, the City's annual population growth rate averaged a little over two percent, while the job growth rate was about three percent. In 1991, the city population was stable or declined slightly. During 1980s, the County's population grew at about 3.5 percent annually, while the job growth rate averaged about 3.8 percent. In 1991, the County population increased about 0.2 percent. Recent San Luis Obispo Council of Governments (COG) projections show the County's population as a whole growing at a little more than one percent annually between 1990 and 2020. This approximates the City's planned growth rate in its Land Use and Housing elements, and represents a 1.1 percent compound growth rate. State officials predict that the State's population will grow at about one percent annually from 1990 to 2020, while federal officials have projected a growth rate of about 0.7 percent nationwide during the same period. Housing demand is primarily affected by household formation and net migration to the housing market area, which in turn are influenced by employment and enrollment changes. Te eve4tiat developed fer- the period eevered in the San Luis Gbispe Area Geer-diftafing Getine*A's Regien n199:7. Bad the�t�+'s Land Use E�ment�olir�es r�gardtng ecortonuc and tnstttutzc�rtal�roc�th, It 00 demand ax expected to g�3w.a��rate:of af3c}ut i percen# cTasely fQll�wmg COO s s�untywtde Pvlatitmrowt pxcettons under n "resottree cnrtstratned scttan ." This gtoxth px�reorl n n assume that housing pfeduefieft will be eenstfained between 4anttarty 199-2 afld Deeember 1994 "high" n• n gFewth 18 1 High Growth Prtieetien. Assumes that the heasing supply i- 9few at , ia_aek c_e aaa L..nary 1994 thr-eugh Deeembe:• 1994 (1 80 dwol:ngs ...,1..) and that he...inn , Rl 11VRJ11lb , when addifienal watef supplies are aatieipaW with the planned eemplefieft ef-the SF9 • Needs ..la (5,128 less 119idwell:ngs uiR during_1991 and 1992 4,989 dwellings) 1995 and r , between Jenuafy 1991 and july , and. r-epfeseats an- avefage annualr beiR in 1991 and 199-2, the remaining units te built between Rmtiefy 1993 md Rily is 3,733 139 — 3,594. The safne assumptiens apply as in the "high" ted beth 199-5 and 1996; ples abeut 618 dwellings in ene half ef 199:7. This weuld, abeet e800 , Med-Gro%t# Wejeetio:. ssumes a 1 percent average population growth rate between January 1991 to July 1997 following the City's General Plan policies, equivalent to a construction rate of about 180 dwelling units per year, producing about 900 new dwellings between January 1991 and July 1997. Growth limits exempt replacement. dwellings and affordable housing projects. Allowing for an additional 136 dwelling units (source: RHNA plan) for replacement of market removals (demolition,.,relocation, fire) during the period, plus an estimated 20 qualifying affordable dwelling units annually, for a total of about 1,185 new dwellings will be accomodated during the 6 1/2 year period covered by the RHNA plan, or an annual average of 182 units. This would add about 2,500 persons, representing an annual average population growth rate of just under 1 percent (replacement housing not counted toward population increase). This is the growth rate which is accomodated by this Housing Element. Growth projections assume that adequate resources and public services are available. Housing growth beyond 560 dwellings (number of units which can be built without new water supplies), or above a population of about 43,200 are predicated on successful City efforts to secure additional water supplies to serve growth. Ory General Plan policies seek to manage residential and commercial growth so that new development occurs in an orderly manner and can be adequately served by utilities and public services like police,fire, schools,parks and recreation, and general government. 19 t San Luis Obispo allows relatively small R-1 lots of 6,000 square feet in all residential zones, and has the second highest residential density of the County's cities (after Grover Beach) with about 4,500 persons per square mile. It remains, however, one of the most expensive housing markets in the County. Clearly, market demand strongly influences housing costs. And while the City's lot pattern has been established in most areas, lot patterns in expansion areas are yet to established. Residential growth management Regulations adopted in 1982 include a schedule of maximum residential construction rates through 1999. They exempt individually built houses and duplexes, replacement housing (through demolition, relocation, or fire), group quarters of five or fewer persons, hotels and motels, and projects that include their own growth management provisions pursuant to an approved specific plan or planned development. The regulations are intended to provide a steady rate of population growth of about 1 percent per year, while promoting affordable housing close to employment centers and Cal Poly. As a result of ordinance changes and market conditions, the Residential Growth Management Ordinance did not significantly constrain or delay housing production. The regulations were subsequently modified to accommodate a building surge following the 1980 - 1982 recession, and to exempt projects within specific plan areas. In 1987 these regulations were suspended when the City Council adopted the Water Allocation regulations. The Land Use Element states the City's basic position on the extent, rate, composition, and financing of growth, and limits growth in the City's housing supply to not more than one percent per year. The LUE establishes a maximum buildout of 23,300 dwelling units in the City by 2017, accommodating a total city population of 54,900. Most of these additional units will be located in designated expansion areas located outside 1992 City limits but inside the urban reserve. Figure 4 shows the location of future residential areas outside the 1992 city limits. City policies require preparation of specific plans for each of the major expansion areas, with provisions for phased housing development. Each areas' phasing will be determined, in part, by the affordability of the dwellings, and by other public benefits such as open space. The area committing to development of the largest number of dwellings affordable to low-income er medemte ince ' residents would be developed first. Land use and development standards Zoning Regulations Zoning regulations implement the City's land use policies. The regulations allow a range of residential densities, from seven dwellings per acre in the R-1 zone to a maximum of 24 two- bedroom units per acre in the R-4 zone, and up to 36 two-bedroom units per acre in the downtown commercial zone. Parking and setback requirements, height and coverage limits 24 C To achieve the growth targets outlined below, the City must take steps to encourage housing production by zoning adequate sites for future housing, securing the necessary water resources and sewer capacity to accommodate new development, and by relaxing restrictions on housing production to encourage affordable housing where such changes will not conflict with other general plan goals. Revised Housing Needs The City's (draft) Housing and Land Use Elements include policies and programs which allow the City to accommodate up to 1,150 additional dwellings by July 1997, about 4,000 fewer dwellings than called for in the RHNA Plan. Of these, 725 dwelling units, or 63 percent of the total units to be accommodated, would be targeted for very-low, low, and moderate income households. During the Housing Element's five-year planning period from September 1993 to September 1998 (which overlaps the RHNA planning period), policies and programs will accommodate a net increase of at least 900 dwelling units. The City's growth management policies now exempt new housing which replaces housing lost through market removals. This element also includes a program which will amend the Residential Growth Management Regulations to exempt housing which is affordable to very-low Wit}; low, - income households from the 1 percent growth limit. It is estimated that an additional 20 exempt dwellings will be produced annually which meet affordability standards. When exempt replacement and affordable housing is included, the total number of new dwellings accomodated during this element's five-year planning period is approximately 1,100. Table 6 summarizes housing production anticipated for the Housing Element planning period, September 1993 to September 1998. Table 6 Projected Housing Construction,' City of San Luis Obispo September 1993 to September 1998 Status of New Dwelling Units' Nufi er: f Dwelling Units. 1% annual increase in new dwelling units.' 900 (5 years @ 180 units per year) 0.5% replacement housing construction 91 (.005 X 18,1673 = 91) Estimated 20 affordable housing units 100 annually' (5 X 20 = 100) TOTAL 19091 35 ConsTo: MEETING AGENDA ❑0DanolcsAcE= Fn i May 7, 1993 DATE 5-11-93 ITEM #_�_ �o� D F 1XR. FLAJ DR To the Cit Council l eCLIZv2/0 ❑ POUR Y i�C1.?.�;/G'i!'. ❑ PGLiCHQ-1 From Richard Schmidt, 112 Broad St., San Luis Obispo, CA 93405 i7 r�+cV1T.T -Ut E1 ::EcL+ir Re Housing Element: Free Land for Housing Authority :_11,CpFkoFL.- ❑ LmLo find it unsettling that this issue has arisen at the last moment, and that council members seem inclined to go along with it. I urge caution, for if the city requires that a significant chunk of annexed land be given free to the Housing Authority, it is probably killing the broader affordable housing policies in the Element. This is because both the Housing Authority and all those non-authority clients who would benefit from the broader affordable housing goals would be competing over the same piece of pie. I suspect that once the authority grabs its piece, there would be tittle or none left for the others. The notion that the public deserves a share of the wealth it creates by underwriting the annexation and extension of urban services to undeveloped land is valid. It is the rationale for the public's expecting, through the terms of the Element, that housing production on newly annexed land reflect the housing affordability needs of the public at large rather than the desire of landowners/developers to simply maximize their profits. There is a great deal of evidence that the increase in wealth due to annexation of the designated major annexation areas is sufficient to support the Element's broad affordable housing goals. Most of this land has been in the same ownership since before the large run-ups in land value -- some of it has been in the same ownership for generations. The cost of land ownership, therefore, is relatively low. When the Planning Commission was working out the policies now reflected in the Element as part of its work on the LUE, in a public session we worked with one of the owner/developers of the Margarita Area to see whether it was possible to produce the minimum sort of housing that would be affordable to a very low income household without a public subsidy. According to these calculations, the cost of land ownership plus development roosts for the sort of lot required for this minimum housing resulted in a finished land per unit of $15,000. (1 was astonished, frankly, that it was so low.) After calculating the costs of construction, we concluded, with the owner/developer's agreement, that it was possible to produce such housing at cost, or at a small profit -- in other words, with no public subsidy. We repeated the exercise for low income and moderate income housing, and found that both could be produced at a profit for the developer. The broad affordable housing policies included in the Element, therefore, appear to be both philosophically and economically supportable. But what happens if the developer is forced to donate land, rather than selling it at cost, for a significant portion of the project? It is obvious that this would cut into the developer's ability to meet other affordable housing goals that depend upon this same "land bank." How much would it cut into those goals? I don't know, and I suspect council members don't either. Therefore, I urge caution. Perhaps in the short run a compromise can be achieved by deleting the language from "Affordability" Policy 6 regarding sale of land at market,ualue. Suggested wording: "In major annexation areas, land adequate to construct at least five percent of the number of dwellings allowed within the major annexation area shall be made available to the city or its Housing Authority." This leaves the .cLetails till later, when they can be subjected to more careful scrutiny. MAY . 7 19931A On an unrelated matter of affordability, I wish to ask council consideration for a provision not currently included in the draft Element. One way for persons to obtain affordable housing is to build it themselves; thereby absorbing labor costs and effecting other economies. If an owner-builder is genuinely seeking to obtain affordable shelter in this manner, would it not be fair for the city to extend the possibility of fee waivers to assist the effort? Consider an exampled someone of modest means happens to have obtained a lot, and has a $40,000 development budget. If city fees exceed $15,000, that.cuts substantially into this modest development budget, and makes it that much more difficult_for the individual to provide decent housing for himself. On the other hand, the city has a right to expect, if it grants reduced fees, that it is not simply underwriting real estate speculation. Jurisdictions that make special concessions to owner-builders usually limit how often they can be used in order to reduce the likelihood of speculation. I would.ask that the council consider a fee exemption program for owner-builders. It could be added to the existing fee exemption program, #6 on page 7, or be freestanding. "Owner-built affordable housing may be eligible for fee exemption or reduction. An owner-builder would be eligible to benefit from this provision once every 10 years." MEQ!-NG. AGENDA Rr)o-oAl DAA •U'Q3 ITEM #= May 11, 1993 MEMORANDUM RE(;tlVF.L) TO: Penny Rappa MAY 1103 FROM: Peg Pinard SAN LU s o°si"sn,CA SUBJECT: COUNCIL'S DRAFT HOUSING ELEMENT It is obviously a problem when a City Council Member does not understand what they voted on. Certainly there was plenty of detailed discussion and examination of the issue. First, there was only one draft and that was staffs. That draft never incorporated the Planning Commission recommendations. Staffs housing draft represented'a total change in course from the long-standing 1% growth rate the City Council and the former Planning Commission adopted in the LUE. The current Planning Commission pointed out and directed staff that the Housing Element should reflect "an overall growth rate of 1% as prescribed in the LITE." If there has ever been a "total changing of course" from the clear direction of two Planning Commissions and the City Council, it has been staffs draft which deviates radically from the 1% growth rate and COG's housing quota. The record shows that you seconded the motion for that quota and when the City appealed that radical departure,you did not vote to support the City you represented. Being assigned this housing quota has caused us obvious problems. The clear and simplified proposal adopted by Council on April 6th, in fact, returned the Housing Element to the course of 1% growth management clearly recommended by the former City. Council, the former Planning Commission and the current Planning Commission. The Housing Element was clarified and simplified. It is not an original document, it is a restatement, in clear and simple language, of what is already in the existing Housing Element and the draft Housing Element. My two ,suggested additions were clearly identified. At the meeting of May 4th, we began to go through the Council's clear and simplified Housing Element and asked each Council Member for suggested changes. That is to continue, and I hope you will bring any suggested changes you have for Council discussion and action. COPIESTO: PP:ss 0-DDm°trn-Ac&n �. ❑ m 25C —6DDUL � rbc ❑ FIN.MR. c: Council . No o FW DW- Cuu?-K/O?L'G. CJ POLICECH ❑ a Con:7S• M CJ r, c DII 11 Pr.JD :LE_❑_L'1'ILJL2 ML ING AGENDA DATE _5-11-SU ITEM # f' n May 10, 1993 MEMORANDUM TO: Council Colles FROM: Penny Rappa l/r`lf,#4A( SUBJECT: HOUSING ELEMENT I may be a little naive at times, but I'm not stupid. As you are aware now,. I did not understand that we were totally changing course. This is a very dangerous precedent to set. (What happens to other General Plan Elements?) Many years ago, in order to sure adequate public participation, the state legislature established the role of the Planning Commission in local government. Given that the Council is anxious to have the state review our draft, I would request that we discuss when the Planning Commission review will.occur. How will we deal with recommended changes? Lastly, to be totally honest with each other, I would appreciate knowing who drafted the revised Housing Element. The goals are somewhat similar to the Planning Commission draft, but the programs are quite different. PR:ss c: J. Dunn Rt�krewv LID MAY 1111 i:Iry COUNCIL SAN LUISOBISPo,CA COPIES TO: ❑"Dw.ctm Acdon /❑ M* CYCouei 110Q (;?'CAO ❑ M. "lyR. IZAi,10 ❑ RREULTT I.�lsTl'Oiu�EY I.J FtN!]1R. n (�CL.EF•K!O71G. I FOLKECIL h:housing pen t?i:�sgiK> ,CJ irrho:.:.