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C I T Y OF SAN L U I S OBISPO
FROM: John Mandeville, Community Development Direct
Prepared By: Jeff Hook, Associate Plann�, —
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SUBJECT: The San Luis Obispo Council Of Governments' (SLOCOG) Regional
Housing Needs Allocation Process And Methodology.
CAO RECOMMENDATION: Adopt a resolution recommending the use of a"development
suitability factor" in determining regional housing needs.
DISCUSSION
At its October 16`h meeting, the City Council received information on the San Luis Obispo
Council of Governments' proposed method for projecting countywide housing need and
allocating total need among the jurisdictions in the County. The Council also considered a
resolution supporting use of a "development suitability factor" in the regional housing needs
methodology but postponed action on a resolution pending further discussion by SLOCOG's
Housing Task Force. The Task Force met again on October 23`d to discuss and make
recommendations on three remaining issues:
1. General Plan Factor
2. Development Suitability Factor
3. Other Adjustment Factors
General Plan Factor
At their October 3, 2001 meeting, SLOCOG Board members asked staff to analyze the feasibility
of two additional "adjustment factors" that looked at jurisdictions' general plan growth policies,
and resource constraints, like water availability and sewer capacity. In response, SLOCOG staff
prepared a table showing one possible outcome of applying these general plan growth limits— for
those jurisdictions that had numeric or percent growth limits -- based on an assumed countywide
housing need of 19,538 units (see Attachment 2, Exhibit A). Under the scenario pictured, growth
limits in Grover Beach, Morro Bay and San .Luis Obispo would preclude these cities from
accommodating 683 units of their housing need allocation. This need is then shown reallocated
to the other jurisdictions within the County. Not surprisingly, the Housing Task Force did not
support this factor. It was pointed out that, as presented, this factor reflected only growth limits
and not the broader range of general plan policies that guide where and how many dwellings
could be built. Most of the Task Force members felt this level of general plan analysis was
infeasible given the broad range of issues in the Cpunty and limited resources available to
conduct the analysis. Some also felt that a factor which relied on general plan policies was not
likely to be effective in modifying HCD's regional need determination.
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Regional Housing Needs Methodology
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Development Suitability
In the attached report, SLOCOG staff recommends the development suitability factor be
"cautiously applied," and then reiterates concerns that use of a development suitability factor may
result in a situation in which the County's total housing need would not be reduced, necessitating
a shift in housing need from cities with limited vacant land or significant development
constraints to unincorporated county areas with fewer constraints. SLOCOG staff also expresses
concern with the availability of consistent, detailed, and reliable data for all county areas to apply
the suitability factor, and again includes a table to suggest that development is not necessarily
limited by physical constraints such as slope, floodplains, mapped hazardous or sensitive
biological areas, prime agricultural land, or proximity to public roads.
After lengthy discussion on October 23rd, the Housing Task Force recommended against using
the development suitability factor on a 5-3 vote (Pismo Beach, Monro Bay and San Luis Obispo
City voted in favor of the SLOCOG staff recommendation to use the factor only to reduce the
total regional need). Most jurisdictions were concerned that the factor would merely shift
housing need among jurisdictions and would not effectively lower the region's overall housing
need. Some felt the 10-year population projections for each jurisdiction that had been approved
by SLOCOG and submitted to HCD already reflected general plan constraints such as land
suitability or resource constraints.
The intent of the development suitability factor is not to shift the "fair share" of housing need
from one city to another or from the cities to the County, but rather to adjust each jurisdiction's
need — including unincorporated areas — based on practical, documented development
constraints. If individual jurisdictions' assigned needs are reduced by applying the suitability
factor, the overall regional need should also be lowered. As the report suggests, the objective of
the development suitability factor should be to demonstrate, if necessary, that existing physical
environmental conditions and State law "preclude an overly aggressive housing allocation"
countywide.
City staff agrees that population projections sent to HCD — to the extent they reflect the adopted
general plan — do take into account land suitability, resource and other development constraints.
In San Luis Obispo, for example, they do. The population growth projection for San Luis Obispo
City for 2001-2008 is 448 additional persons per year, or a one percent annual growth rate,
consistent with the our General Plan growth policies. However, HCD can choose to base its need
determination on State Department of Finance population projections, SLOCOG population
forecasts or a combination of both. HCD then determines what it considers appropriate growth
projections on which to base housing need, and through some method which has not been
explained, assigns a share of statewide housing need to San Luis Obispo County. HCD's
regional need determination may not, therefore, reflect the jurisdictions' general plan policies on
development suitability or availability of public services.
SLOCOG staff emphasizes the need to collect, organize and present the data needed to apply the
suitability factor to SLOCOG by December 14, 2001. This would allow SLOCOG to submit the
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Regional Housing Needs Methodology
Page 3
appropriate information to HCD before it announces countywide regional housing need numbers
by the end of December 2001. Additional time beyond Dec. 14th may be needed to allow all
jurisdictions, with SLOCOG's help, to assemble the necessary data to apply the suitability factor.
Other Adjustment Factors
SLOCOG staff proposes four "adjustment factors" that would be applied to a jurisdiction's base
housing allocation as established by the "formula factors." They are 1) Vacancy Need, 2)
Replacement Need, 3) Sphere of Influence (SOI), and 4) Fair Share. These factors are described
in the attached report. The Task Force supported use of vacancy, replacement and fair share
adjustment factors, but not the "Sphere of Influence" Factor. Vacancy and replacement need
were used during the last regional housing needs assessment (RHNA) analysis done in San Luis
Obispo in 1992-93. The Task Force felt these factors were reasonable and necessary to reflect a
"healthy" rental and sales market, and to replace housing lost through demolition or conversion.
The Fair Share adjustment is required under State law and is consistent with our City's housing
element goal of providing a balanced supply of housing for all income levels.
The Task Force postponed action on the SOI adjustment. The method for applying this factor
has yet to be determined, and in the Task Force's view, there are practical and procedural details
that need to be addressed before endorsing this factor. Some Task Force members were
concerned this factor would shift 75 percent of the assigned housing need within a jurisdiction's
sphere of influence from the County to the respective city, even though the area in question might
be outside the city's ultimate growth boundaries, or urban reserve lines. Cities' urban reserve
lines don't necessarily coincide with LAFCO's sphere of influence boundaries. Where LAFCO's
sphere of influence extends beyond a city's adopted URL, that city would be required to accept
75 percent of residential growth in an area not intended for annexation or urban services.
Moreover, if a city does not anticipate annexation until after the six to seven year horizon of the
pending housing element update, the timing question of when cities should plan for the
additional housing becomes important.
ABAG's Experience
The Association of Bay Area Governments includes nine counties and 101 cities, with a total
population of 6.8 Million. In 1999, after a ten-year lapse, the State Legislature re-instituted the
Housing Needs Determination Process. In October 1999, HCD informed ABAG of its "regional
share of statewide housing needs." ABAG's total allocation was initially set at 310,761 housing
units for the 1999-2006 regional housing needs time frame. ABAG staff compared that need
figure with its own regional growth forecasts and determined that the State's housing goal was
significantly larger than the expected regional household growth. ABAG provided HCD with
population and household growth that ultimately reduced the assigned regional housing need by
about 80,000 units, or 26 percent. According to one ABAG staffer involved in that process,
ABAG used a planning analysis called "Projections 2000" as a basis for the allocations. That
method took into account local constraints in that general plan data and other local information
were incorporated into a method of projecting household and population growth. Once the total
regional need was agreed upon by ABAG and HCD, none of the individual cities' appeals to
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Regional Housing Needs Methodology
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higher income housing, since it already had a substantial share of the east Bay's affordable
housing.
RECOMMENDATION
Staff is seeking Council confirmation, by resolution, of the use of a development suitability
factor in the allocation method before the next SLOCOG Board meeting on November 7th.
ATTACB MENTS
1. Draft Council Resolution
2. SLOCOG Staff Report and minutes, October 23,2001
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Regional Housing Needs Methodology
Page 5 Attachment 1
RESOLUTION NO. (2001 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
TO RECOMMEND A PREFERRED METHOD FOR
DETERMINING REGIONAL HOUSING NEEDS.
WHEREAS, the City Council has reviewed a San Luis Obispo Council of Governments
staff report and supporting information dated September 18, 2001 describing a draft regional
housing allocation method and possible factors to use in the calculation of housing needs;
WHEREAS, the City Council recognizes the importance of establishing an equitable and
comprehensive method for determining regional housing needs which considers not only factors
generating housing demand but also physical constraints on a jurisdiction's ability to meet its
regional housing need;
WHEREAS, State Government Code (Section 65584) provides that the distribution of
regional housing needs shall, based on available data, take into consideration market demand for
housing, employment opportunities, the availability of suitable sites and housing need, among
other specified factors;
WHEREAS, the General Plan Housing Element (1313) says the City should prevent
new housing development on sites that should be preserved for open space or parks, or on sites
subject to natural hazards or unacceptable manmade hazards.
BE IT RESOLVED by the Council of the City of San Luis Obispo that based on its
deliberations and those of the San Luis Obispo County Housing Methodology Committee, public
testimony, the staff report, and on State law, the following:
SECTION 1. Regional Housing Needs Allocation Method. The City Council recommends
that the method used to determine regional housing needs in San Luis Obispo County be
designed as follows:
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Council Resolution No. (2001 Series)
Page 2
1. The method should include a "Development Suitability" factor which takes into account
physical factors which may limit a jurisdiction's ability to fully accommodate its assigned
regional housing needs.
2. Physical factors should include, but are not limited to, supply of developable land, slope,
prime fano land, creeks and designated habitat for threatened or endangered species, state
or federal lands, airport land use restrictions, geologic, seismic or other natural hazards,
and preservation of historic resources is a key component of the community's sense of
place and quality of life.
Section 2. San Luis Obispo Council of Governments Action. The Council hereby forwards
this recommendation to the San Luis Obispo Council of Governments.
Upon motion of seconded by
and on the following roll call vote:
AYES:
NOES:
ABSENT:
the foregoing resolution was adopted this day of , 2001
Mayor Allen Settle
ATTEST:
Lee Price, City Clerk
APPROVED AS TO FORM:
G. r sen, ity Attorney
jh/Uregionathousingneeds/ccreport I I-6-01
Aftcnmenc i
SAN LUIS OBISPO COUNCIL OF GOVERNMENTS
REGIONAL HOUSING NEEDS SUBCOMMITTEE MEETING
MINUTES OF SEPTEMBER 18, 2001
PRESENT:
Steve Devencenzi...............................SLOCOG
Josh Chapman....................................SLOCOG
Aida Nicklin.......................................SL000G
Kerry McCants...................................City of Arroyo Grande
Susan Clark........................................City of Grover Beach
Mike Prater.........................................City of Morro Bay
Ed Gallagher......................................City of Paso Robles
Carolyn Johnson ................................City of Pismo Beach
Jeff Hook............................................City of San Luis Obispo
Dana Lilley.........................................SLO County Planning Department
Larry Allen.........................................SLO County Air Pollution Control
District
Pam Marshall Heatherington.............ECOSLO
Eric Greening.....................................ECOSLO/Life on Planet Earth
Paul Hood...........................................LAFCO
George Moylan..................................Housing Authority of SLO (HASLO)
E. A Introduction: Mr. Steve Devencenzi called the meeting to order at 1:08
p.m. Self-introductions followed.
B. Minutes: Mr. Devencenzi asked for any comments or questions on the minutes of
the Regional Housing Needs meeting of August 21, 2001. Mr. Jeff Hook indicated he
has some changes to the minutes, noting he will provide Ms. Nicklin the changes in
written form. Mr. Eric Greening said he wants to know what those changes are before
the committee approves the minutes. Mr. Hook read the changes. Mr. Devencenzi
asked for any objections or comments to Mr. Hook's proposed modifications; there were
none. Mr. Hook moved to approve the minutes of August..21, 2001 Regional
Housing Needs minutes including the changes. Mr. Dana Lilley seconded and the
motioned carried unanimously.
C. Summary of September 7`" Housing and Community Development (HCD)
Workshop for preparing a Regional Housing Needs Plan: Mr. Devencenzi reported
that the HCD Workshop he recently attended at the University of California Davis did not
provide much new information that the committee members do not already have as we
are ahead of similar sized counties in this process. He mentioned that at the workshop
he had discussions with HCD representative Kathy Criswell, Sharon Sherzinger of
Caltrans, and Terry Roberts of the Governor's Office of Planning and Research
regarding application of the PLACE 3S program for local Housing Elements and they
expressed enthusiasm for the idea. The goal is to bring the Geographical Information
Systems (GIS) capability of all jurisdictions to one "platform" and incorporate a number
of factors for evaluating different development scenarios, in order to make planning more
accessible to decision makers and the public. Mr. Devencenzi said that HCD has
indicated that they are fully aware of the concerns of different jurisdictions and the
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limitations, state mandates, etc. that Council of Governments encounter in the process,
however this is unlikely to materially affect their process. Ms. Susan Clark asked if at
the workshop any clues were given regarding methodology criteria. Mr. Devencenzi
responded no, noting HCD distributed some information that showed HCD's own
population growth projections. Mr. Larry Allen inquired about the timeline for the
PLACE3S program and Mr. Devencenzi replied the timeline for developing the GIS
information is this fiscal year, however full funding was not provided to conduct the
workshops which will be included in the grant cycle for next year.
Mr. Greening asked how the issue of job growth would be treated in the light of the
September 11`h events and what checks would be needed since things are changing.
Mr. Devencenzi said the committee could come up with a factor that anticipates job
growth increase or decrease but too many unknowns exist to change course. Mr. Lilley
suggested the committee should proceed in the same track that has been laid out, with
the hope that there will be an opportunity to adjust job growth between now and
December 2002. The committee went into a discussion regarding the effects of the
recent events on job growth.
D. Job Growth Proiections: Mr. Chapman distributed copies of a letter from Mr. Hook
to the Regional Housing Needs Subcommittee. The letter discusses the three main
objections to the use of a "development suitability" factor in the Housing Needs
Determination process. Mr. Chapman also distributed a handout on Job Growth
Estimates and Projections for San Luis Obispo County 1991-2008 noting that these
projections will be presented for Board approval dependent upon when the numbers
from the County are released. Mr. Chapman discussed the Job Growth Estimates
Table in the handout. A discussion on job growth followed.
Mr. Devencenzi stated that since the data on job growth projections is incomplete at this
time, this issue would be brought back at next month's meeting. He then asked for
further comments or questions. Mr. Kerry McCants requested that a spreadsheet that
shows incremental percent job growth increase be provided to the committee. Mr.
Chapman concurred. Mr. Hook inquired if farm jobs are included in the numbers
reflected in the handout. Mr. Chapman clarified that those numbers include agriculture
jobs and permanent farm worker jobs, noting that migrant farm workers are excluded.
E. Housing Methodology Factors: Mr. Chapman noted that the consensus at the
last meeting was to come back with more information on housing methodology factors
and to give committee members a chance to review those factors. He further noted that
the staff report outlines a brief description of each factor, its application and implications,
and the SLOCOG staff recommendations.
The committee discussed the following factors:
Formula Factors
Job Growth. A concern was raised regarding the inclusion of both job growth and
population growth into the formula. Mr. Lilley commented that from a policy standpoint,
both job growth and population growth create a need for housing. If both are equally
significant, then both should be equally weighed. Mr. Chapman clarified that at this
time, the emphasis is on approving or selecting the factors that would be included in the
formula. The formula on page E-10 shows that a weighting factor is needed to complete
the formula. The next step would be to determine which of the two factors (job growth or
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population growth) is more important and that issue will be addressed in the next
Housing Committee meeting. A discussion on the Draft Housing Distribution Formula on
page E-10 ensued. Mr. Mike Prater commented that in the City of Morro Bay,jobs play
a big role in increasing housing especially relative to the Duke Energy Plant construction
project; he asked if the job growth factor should include temporary jobs or should it only
account for permanent jobs. Mr. Devencenzi indicated that Mr. Prater's concern would
be taken into consideration when SLOCOG looks at the pb numbers assigned to the
City of Morro Bay, making sure that this particular major project gets factored in as to
what is calculated. Mr. Gallagher moved to approve the staff recommendation to
include "Job Growth" factor in the Housing Distribution Methodology. Mr. Lilley
seconded, and the motion carried on a voice vote with Mr. Hook voting "No." Mr.
Hook explained he voted "No" because he feels there are still questions that need to be
answered regarding what the weighting factor will be before deciding whether job growth
should be included or not.
Household Growth. Mr. Chapman indicated this is the same basic formula as Job
Growth, noting a correction on page E-4, under Implications - Approach B. Approach B
should read: "Would not continue to perpetuate recent patterns in housing
development" Mr. Hook expressed concern that if the weighting factor is left out and
these "formula factors" are recommended now, the committee would be locked in. Ms.
Carolyn Johnson stressed the need to inform the SLOCOG Board (when presenting
these factors for approval)that these factors have not been weighted. Mr. Hook said he
would like to see how weighting affects the other factors.
Ms. Johnson moved to approve "Household Growth' as a "Formula Factor" in the
Housing Distribution Methodology using "Approach A," with the caveat that the
SLOCOG Board be made fully aware that the weighting factor will be determined
at a future date. Ms. Clark seconded. After the Committee briefly discussed the issue
of using "Household Growth" as opposed to "Population Growth," Ms. Johnson
amended the motion to use "Population Growth' instead of"Household Growth."
Mr. Lilley seconded, and the amended motion carried on a voice vote with Mr.
Gallagher and Mr. McCants voting "No."
Mr. Allen proposed using both Household Growth and Population Growth. Mr. Lilley
indicated that the problem with including both is that one or the other is already derived
from the other.
Development Suitability. During the discussion on this issue and on the Development
Suitability Criteria outlined on pages E-4 and E-5, Committee members gave the
following suggestions/comments:
• Identify and examine the issues involved because a lot of the criteria may not be
attainable to develop the data.
C Some communities may have constraints that are unique and should be factored
into the formula..
• A deeper study of the criteria is needed in order to determine which ones can be
used practically.
• Table A (pages E-4 and E-5) was not proposed as "The Criteria." Mr. Hook put
this list together as a starting point for discussion, with the awareness that each
jurisdiction has its own unique description of developable land.
• The criteria need to be clearly explained.
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• Concerns: 1)The criteria are mostly discretionary and it would be very difficult to
find some consistency and equity across the line in applying them. 2) It does not
deal with infill potential and the potential for zoning changes, or other increases in
density, etc.
• There are merits to some of these criteria, however, not until this committee
studies the criteria thoroughly and is comfortable with the factors and results will
those merits be put to use.
• Criterion A, "Vacant or essentially so."- Determining which site is vacant and
which is not involves many details and interpretation. The following language
needs to be added to this criterion: "...excludes land zoned by resource protection,
local, state and federal agencies and utilities."
• Criterion C, "Located outside of the 100-year floodplain, as shown in the latest
FIRM map."—There is no need to make it sound like people are not going to build
residential development in areas outside the 100-year floodplain because they
already are building there under certain conditions.
• Criterion G, "Located within X mile of existing public access roads."— It should
go more than a quarter mile for major expansion areas.
• Development Suitability factor would create a difficult situation for comparing
member jurisdictions because every jurisdiction would want to deal with it
differently.
• The City of Morro Bay could agree on most of the criteria but would like to
exclude some more land as developable. Add "Energy Generation and
Transmission lines"to Criterion D."
• Put the Development Suitability factor at the end under "Adjustment Factors,"
and simplify it to account for jurisdictions that do not have access to expansion
areas.
Mr. Devencenzi asked for a round-table vote on whether "Development Suitability'
should be included as a factor or not. Mr. McCants voted "No." Ms. Clark voted "No"
and noted that although this is an important factor, she thinks it has already been
addressed in other currently ongoing processes. Mr. Prater indicated he would support
this factor for inclusion if it is modified. Ms. Johnson concurred with Mr. Prater's
comments, noting that the criteria need some work and that she would like the idea of
including this factor under "Adjustment factors" instead of"Formula factors." Mr. Lilley
voted "No," noting this factor is already implicitly included in the population growth and
job growth. Mr. Greening suggested naming this factor"Available Land and Resources"
instead of Development Suitability. He noted he is leaning towards supporting this factor
but that it needs some modifications. Both Mr. Gallagher and Mr. Moylan voted "No."
Mr. Paul Hood voted "No," commenting that this factor is self-regulating. He would
rather see it as an adjustment factor but it would put more pressure on the areas within
the unincorporated sphere of influence areas. Mr. Allen expressed concern with the
potential outcome of this factor; therefore, he is voting "No." Mr. Hook indicated he
supports inclusion of this factor with the provision that this committee will refine the
criteria and address the valid issues that were brought up at this meeting. Additional
discussion ensued. The Committee reached a consensus to have the Development
Suitability factor refined and come back in the next meeting. Mr. Hook will
coordinate the effort and Mr. Lilley and Ms. Johnson and Mr. Chapman will be
participating in the evaluation.
Adjustment Factors
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Discussion of the Adjustment Factors is continued to the next meeting.
F. Meeting Schedule/Key Dates: Next Housing meeting is on October 23, 2001,
Tuesday, at 1:00 p.m.
Adioumment: The meeting was adjourned at 3:30 p.m.
Minutes prepared by Aida Nicklin
H:2001-2002 Overall Work Program19200 Regional Housing Needs Assessmen&HOUSING NEEDS MEETING MINUTES 9-18-01.doc
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SAN LUIS OBISPO COUNCIL OF GOVERNMENTS
STAFF REPORT
MEETING DATE: October 23,2001
SUBJECT: Housing Distribution Methodology Factors
BACKGROUND
The San Luis Obispo County Housing Methodology Committee has been meeting for the
past six months in an effort to develop a methodology that would distribute San Luis
Obispo County's regional housing need equitably to each jurisdiction. SLOCOG staff
has researched distribution factors that have been used by other Council of
Governments that have completed their Regional Housing Needs Plan. The committee
has asked that SLOCOG present these factors as well as any others that have been
proposed locally and develop a proposed local methodology.
At the September 18`h, 2001 Housing Methodology Committee began the process of
selecting the factors that would contribute to the distribution of the San Luis Obispo's
Regional Housing Need. The committee reached a consensus on using the following
factors:
1. Job Growth
2. Population Growth
SLOCOG staff will ask the committee for a recommendation on the remainder of the
proposed distribution factors. SLOCOG will then submit its recommendations along with
those of the Housing Methodology Committee to the SLOCOG Board for their approval.
The approved factors will then be added to a distribution formula that will be presented
to the Housing Methodology Committee at the November 13, 2001 meeting.
RECOMMENDATION
Staff: Recommend the use of the following factors in the housing distribution
methodology:
1. General Plan Factor(formula)
2. Development Suitability(formula/adjustment)
3. Vacancy Need Adjustment
4. Replacement Need Adjustment—Pending Data Availability
5. Sphere of Influence Adjustment
6. Fair Share Adjustment
Housing Methodology Committee:
DISCUSSION
SLOCOG has presented housing distribution factors that have been used in the
Sacramento Area Council of Governments (SACOG)plan, the Association of Bay Area
Governments (ABAG) plan, and the Southern California Association of Governments
(SCAG) plan. SLOCOG staff has modified these factors for local application. The City
of San Luis Obispo has proposed an additional distribution factor for consideration.
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All of the factors proposed fall in one of two categories. The first is to be referred to as a
Formula Factor. The Second is to be referred as an Adjustment Factor. These two
classifications are important when applying the factor in the housing distribution formula.
The proposed Formula Factors under consideration are: Job Growth, Household
Growth, and Development Suitability. These factors determine the jurisdictional share
of the total regional housing need. A weighting factor would be applied to each based
on its importance in the overall formula. All other proposed factors would be considered
Adjustment Factors; Sphere of Influence Adjustment, Vacancy Need, Replacement
Need, Fair Share Adjustment, and Housing Unit type Adjustment. These adjustment
factors would be applied to each jurisdictions share of the regional total or would be off
the top adjustments that would be divided up between each jurisdiction. Each factor
type is discussed in the following factor descriptions. Attachment 1 is a draft housing
distribution formula.
FORMULA FACTORS —Three factors are considered: Job Growth, Population Growth,
and Development Suitability. Each is described below.
Committee Approved Formula Factors
3. Job Growth
4. Population Growth
General Plan Considerations
On October 3, 2001, The SLOCOG Board moved to approve consent agenda item D-16;
The Housing Distribution Methodology Status Report. However, the approval was
contingent upon the Housing Committee's further review of 2 new items that would fall
under the Regional Housing Needs Committee adopted Adjustment Factors. One of the
SLOCOG board members pointed out that there should be adjustment factors that
consider.
1. Integration with local General Plans. Some jurisdictions have specific statutes
in their general plan that address growth rates, housing unit type, and dwelling
limitations.
2. Resource constraint issues. Typically these might include water availability,
and sewage capacity.
DISCUSSION
San Luis Obispo County is in the midst of a known and unavoidable paradox when it
comes to the issue of housing distribution. First, the area is widely considered attractive
in multiple aspects and as such, is a highly desired place to locate. However, one of the
main assets is the small-town feel, manageability in scale of the area, relative lack of
congestion; all of which are borne of the fact that the population density is low. We are
faced then with the problem of how to properly accommodate incoming residents, how
and where to provide affordable housing for working families, and how to allow for local
residents to find housing that is affordable, desirable and conveniently located. All of this
must be done without going down the path of the congestion causing, typical voluminous
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tract housing and fringe subdivision that has become ubiquitous Statewide in the post
WWII era. Yet the fact that housing is scarce and affordability low in the area cannot be
disputed.
This discussion is a precursor to the ramifications of adding yet two more additional
factors to the already complex allocation formula. While indeed worthy of consideration,
resource constraints and general plan coordination in essence, become tools for
jurisdictions to make cases for themselves to receive reduced unit allocations based on
what may be very real issues such as water hook-ups or general plan development
restrictions. Some jurisdictions have specific general plan restrictions while others do no,
table A provides a mock allocation demonstrating what SLOCOG believes may be an
unfair distribution. As the designated Metropolitan Planning Organization, it is the
responsibility, perhaps duty, of SLOCOG to come up with an allocation formula that is
both equitable and achieves the most overall regional benefits. We all want to maintain
our quality of life and no one city wants an unjust housing burden laid upon them.
SLOCOG Recommendation
While staff recommends, based upon a motion of the board, the consideration of the
resource constraints and general plan compatibility, it should be known that these
factors by virtue of mathematics alone, will have markedly different effects upon each
jurisdiction depending on their existing General Plan.
Formula/Adjustment Factor-Development Suitability
Agencies using factor in RHNP.None. Factor has been proposed by the City of San Luis
Obispo
Description
The City of San Luis. Obispo has proposed a Development Suitability Factor for
distributing the regional housing need total between local jurisdictions (refer to
Attachment 2 for a complete description of this factor). This factor uses a combination
of environmental and physical constraints along with the availability of vacant land to
determine the amount of land suitable for development.
Application
Uses the availability of"suitable sites" as a factor for determining a jurisdictions ability to
accommodate future construction.. The proposed Development Suitability factor would
be applied in a similar manner as the Job Growth factor and the Population Growth
factor. It would receive a weight factor based on its relative importance to the other
factors in the distribution formula
Implications
Jurisdictions with a limited supply of vacant land and a high amount of environmental
constraints would have their share of regional housing needs reduced. However, the
Regional Housing Need Total would not be reduced, therefore shifting some
jurisdiction's share of housing needs to others are less constrained.
Table Alists of the criteria proposed by the City of San Luis Obispo for determining the
amount of suitable land for development. SLOCOG has reviewed the criteria and
provided comments for each element.
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Table Ar Development Suitability Criteria and SLOCOG Staff Comments
Criteria SLOCOG Staff Comments
A Vacant or essentially so. Developable land is limited to existing vacant
or essentially vacant sites. This does not
take into account the potential for infill
(density intensification, granny units, etc.)
B. Located on land with an average Residential development can and has been
slope not exceeding 30%. built on areas with a 30% slope or greater.
C. Located outside of the 100-year Residential development can and has been
floodplain, as shown in the latest built in areas located within a 100-year
FIRM map. floodplain with proper design standards.
D. Located outside of mapped Residential development can and has been
geological or safety hazard areas, built in areas located within the described
such as areas subject to risks of hazards with proper design standards.
slope instability, landslides,
subsidence, liquefaction, dam failure,
seismic, wildland fire and airport
hazards.
E. Located outside of environmentally Residential development can and has been
sensitive areas, including mapped built in areas located within the described
creeks, rivers and wetlands,tidal and areas with proper mitigation measures.
submerged lands, designated open
space and habitat areas for
threatened or endangered species,
or for species of special concern as
designated by the California
Department of Fish and Game.
F. Not located on prime agricultural Residential development can and has been
soils, defined as land which qualifies built in areas located within the described
for rating as class I or II in the Soil areas with approved zoning changes and
Conservation Service land use various mitigation measures defined in
capability classifications, or which environmental documents or permits.
qualifies for rating 80 through 100 in
the Storie Index Rating.
G. Located within % mile of existing New roads can be built.
public access roads.
D-4
C�3-ls
Status of local jurisdiction data availability
Arroyo Grande Could provide necessary data given a reasonable amount of time.
Atascadero Fully capable of determining the amount of land suitable for
development using the proposed criteria. Data available in a GIS
format.
Grover Beach Could provide necessary data where applicable in Grover Beach.
Limited GIS Capabilities
Morro Bay Could provide an estimate of suitable land for development using the
proposed criteria.
Paso Robles Lacks the mapping of environmental constraints listed in the
proposed criteria.
Pismo Beach Could provide an estimate of suitable land for development using the
proposed criteria.
San Luis Obispo City Fully capable of determining the amount of land suitable for
development using the proposed criteria. Data available in a GIS
format.
San Luis Obispo County Could provide estimates of land falling into the proposed criteria
except for land classified as"vacant"or"essentially vacant". Partial
data available in a GIS format.
SLOCOG Recommendation
Staff recommends that Development Suitability (D.S) be applied cautiously in
determining regional housing allocations at the State level. SLOCOG strongly opposes
the proposed elements in the Development Suitability factor being used to shift unit
allocations among jurisdictions. In the worst-case scenario, nearly all of the HCD
distribution could fall upon the County by virtue of their abundant land in relation to other
jurisdictions. The objective of applying Development Suitability is to demonstrate to HCD
that existing environmental conditions and State law preclude an overly aggressive
housing allocation. If applied, Development Suitability should be used as an adjustment
factor once jurisdictional need has been determined. Furthermore, Development
Suitability should have the affect of reducing the jurisdictional share of housing allocation
based upon developable land.
While from a theoretical point of view valid, every city in San Luis Obispo County has
existing residential development that would fall under one or more of the criteria listed.
Additionally, each jurisdiction was asked how much of the data they currently have
available and its format. While most cities have indicated that they could gather the
required data, staff feels the consistency, detail, and level of accuracy of the data across
all jurisdictions may not allow for reliable determination. Lastly, due to HCD timelines,
jurisdictions should be aware that the D.S. data need be collected, organized and
presented to the COG by December 14th. The D.S. is not the only opportunity for
jurisdictions to challenge HCD's determination'
' California Planning and Zoning Law, Article 10.6 (housing elements), Section 65583, D-2,
states: "It is recognized that the total housing needs identified pursuant to subdivision may
exceed available resources and the community's ability to satisfy this need within the content of
the general plan requirements outlined in Article 5 (commencing with Section 65300). Under
these circumstances, the quantified objectives need not be identical to the total housing
needs. The quantified objectives shall establish the maximum number of housing units by income
category that can be constructed, rehabilitated, and conserved over a five-year time period."
D-5
ADJUSTMENT FACTORS- Four factors are considered: Vacancy Need, Replacement
Need, Sphere of Influence Adjustment, and Fair Share Adjustment. Each is described
below.
Adjustment Factor#1 Vacancy Need
Agencies using factor in RHNP. SCAG
Description
A Vacancy Need factor can be approached from either a housing or rental perspective. It
would put an emphasis on jurisdictions that have low rates and therefore are in need of
additional units in order to allow for supply to move toward demand. Local general plans
describe an ideal homeowner vacancy rate of 2% and an ideal renter vacancy rate of
6%.
Application
When HCD determines San Luis Obispo County's regional housing need they will have
applied a vacancy adjustment in order to promote a healthy vacancy rate statewide.
SLOCOG will work with HCD to determine how many vacant units were designated in
SLO County. SLOCOG will than allocate those to the individual jurisdictions as an
adjustment factor based on their current vacancy rates.
SCAG assigns a vacancy need in between an "ideal" rate and the "current" rate to each
community to make a progression towards a healthy housing market for each
community.
Implications
Vacancy Need Factor would promote residential choice, moderate cost of units, and
provide sufficient incentive for unit upkeep and repair. Excessively low vacancy rates
create over-priced, poorly maintained housing units.
SLOCOG Recommendation
Vacancy Need is a straightforward way of measuring the demand for housing in any
given jurisdiction. Many jurisdictions have vacancy rates well below what is considered
an "ideal" rate.
SLOCOG recommends the use of the Vacancy Need Adjustment in the housing
distribution methodology.
D-6
C, 13-1i
i
Adjustment Factor#2-Replacement Need
Agencies using factor in RHNP: SCAG
Description
A Replacement Need factor compensates for lost housing units and is a valuable
variable in dynamic areas where there exists significant percentages of housing loss as
a result of a variety of factors.
Application
SLOCOG would work with each jurisdiction to determine the average amount of housing
units that have been replaced over the past ten years. SLOCOG would then determine
the total number of housing units that could be expected to be replaced by the year
2008. Each jurisdiction would then receive a share of the total replacement need as an
adjustment factor based on their average replacement rates.
SCAG developed a sub-regional rate based upon trends in demolition permits,
conversions to non-residential uses, and housing loss due to natural disaster. To date
SLOCOG has not contacted individual jurisdictions to determine the availability of data
required for the Replacement Need factor.
Implications
Replacement Need factor would take into account lost housing units that normally would
be overlooked if distribution of housing need is based solely on growth patterns. A
Replacement Need factor would take into account those units in our county that are
presently being converted from rental units into vacation rental units, those lost by
natural disaster, and those being converted from low to high-income residential uses.
SLOCOG Recommendation
While more applicable in large urban centers, many areas like San Luis Obispo County
do experience significant housing losses due to these reasons.
SLOCOG recommends the use of the Replacement Need Adjustment in the
housing distribution methodology, if data is available.
Adjustment Factor#3-Sphere of Influence Adjustment
Agencies using factor in RHNP: ABAG
Description
A Sphere of Influence (SOI) is defined as "a plan for the probable ultimate physical
boundaries and service area for a local government agency." This factor would shift the
responsibility for planning future growth in areas within a city's SOI to that city, relieving
the unincorporated county of planning for future households in areas that would no
longer fall in their jurisdiction.
D-7
Application
ABAG used a Sphere of influence (SOI) adjustment that shifted 75% of the projected
household growth from the unincorporated county to the applicable city. Household
growth was determined using ABAG's previously prepared growth estimates for the
SOI's.
Locally we would need to determine the current number of housing units within each
city's SOI. Then determine the projected amount of household growth within each SOI
using adopted Local Agency Formulation Committee (LAFCO) maps with the most
recently adopted SDI's, local jurisdictions approved (or planning commission
recommended) general plans, and any other information that might assist in determining
the level of household growth with in SDI's. In many instances a local jurisdiction may
have pre-zoned and/or planned an area in anticipation that the land would be annexed
into the city limits sometime in the near future.
The Sphere of Influence factor is an adjustment factor that would occur after the
unincorporated county and all cities received their share of the regional housing need.
This effort would take considerable time and effort on the part of County, City's, LAFCO,
and SLOCOG staff.
Implications
A Sphere of Influence adjustment would reduce the burden on the unincorporated
county to plan for future construction. Cities would be required to plan for future housing
in areas that are within their SOI's. These are areas that are within the service area of
a local city and in many cases may be annexed in the near future.
SLOCOG Recommendation: Staff recommends the use of the Sphere of Influence .
factor in the adjustment of the jurisdictional share of the regional housing need.
Adjustment Factor#4-Fair Share Adjustment
Agencies using factorin RHNP. SLAG, ABAG, SACOG
Description
Most cities in San Luis Obispo County have a good mix of people from different income
levels. To continue this, HCD requires SLOCOG to distribute each jurisdictions housing
allocation between four income levels; very low, low, moderate, and above moderate.
The Fair Share Adjustment would ensure that a city that currently has a higher
proportion of low-income residents is not over burdened with more low-income housing.
HCD has defined the following household income limits for San Luis Obispo County.
Very Low Income up to 50% of the area median family income
Low Income between the very low-income limit and 80% of the area
median family income
Moderate Income between the lower income limit and 120 percent of the
area median family income
Above Moderate Income exceeding the moderate-income limit
D-8
Application
SCAG Shift the existing income distribution closer to tie regional average. Shift
depends on the current income distribution.
ABAG Income distributions were shifted 50%towards the regional average.
SACOG Set a 2020 target in which all jurisdictions would have a uniform income
distribution. Then applies an annual adjustment over the 7 '/z year period of
the housing needs plan that would meet the 2020 target.
Implications
Shifts construction need from one income category to another to reduce the over
concentration of low-income households in one community versus another.
SLOCOG Recommendation
A 50% shift towards the regional average would help encourage communities with
diverse income groups without requiring a major shift all at one time.
SLOCOG staff recommends the use of the Fair Share Adjustment in the housing
distribution methodology.
D-9
C�3
Table A -Adjust jurisdictional share using general plan constraints. Jurisdictions without general
plan constraints receive a share of the excess units from those jurisdictions whose share exceeds
their growth caps. viowft _
EXn blw
YT A-,,,,
Sample Housing Unit Distribution and General Plan Limitations
o I w c
c o 10
c°' a i o . N y
rn N N p 2 C 1 C "
p O m N m Q . I w
V 2 7 Z C W .N.. >. V
z C
W t
Ii a 202
m �cCaN ,`
COOE N M C NZc,
m m 0 0 0 3 too C7 ! o Q o
C 2._0 ' ' i0 V m W U. .0 'D V
i m kv l0 N. R 3 iO r C m 0.
(7 u ca 3 i c c
i p Q mo Q Q a ' V
I rrN
Arroyo Grande none NA 1,600 2291 229 NA 137 366
_ Ili
j
Atascadero none NA 1,734 248 248 NA 153 401
ffffff !
Grover Beach '123 units/yrI 123 ! 1,062 152 i 123 -29 76 199
Monro Bay i70 units/yrI 70 744 106 70 -36 0 70
Paso Robles none i NA 3,329 476 476 ! NA 1 253 729
I _
Pismo Beach" 90
r�oHrth 129 667 95 95 34 64 I 159
San Luis Obispo '" growth 181 5,593 f 799 181 -618 j 0 I 181
San
County Obispo 2.3% pop
1 821 i 4,809( 687( 687 134
.,, 0 687
Total (1) 19,4381 2,791 1 2,109 1 -6831 6831 2,791
# - Pismo Beach population growth rates have been converted to housing units using 2.02 persons per household
##-San Luis Obispo population growth rates have been converted to housing units using 2.37 persons per household
### -San Luis Obispo County population growth rates have been converted to housing units using 2.66 persons per
household
1 -Source: San Luis Obispo Projected Housing Units- Department of Finance 2000
2- Housing units have been redistributed to jurisdictions with no General Plan Constraints using the SLOCOG
proposed housing distribution formula
3-Equals each jurisdiction's Annual Share using General Plan Constrains plus the Units Received from Constraint
Capped Jurisdictions
D-10
C13 al
Housing Methodology Assessment
Resource and Government Constraints for SLO County Juristictions
Juristiction Government Constraints and Resource Constraints:Water Availability, Sewage
General Plan Compatibility Disposal Capacity,and Land.
YES-'New dwelling units are limited to an YES'SLO county Resource Management Plan...estimates capacity
SAN LUIS OBISPO amount fflevels for five resources(and)evaluates the ability of each
increase o
COUNTY of 2.3 2.3 to accommodate an annual community...to develop within the est.capacities for each resource."
%. 0821 units yr) (water,sewage,schools,roads,air quality)
NONE Objectives and Policy,"Encourage a
continuing supply of affordable housing to meet NOT SPECIFIED "the city shall pursue adequate water sources to
ARROYO GRANDE the needs of existing and future A.G.residents accommodate projected residential development.' Sewer: Ample
in all inc ome levels.''...the City shall give capacity for the next 20 years(1992).
priority to low and moderate income residents.'
NONE'Engage in capital project planning to NOT SPECIFIED."the capacity of the sewer treatment plant is not a
ATASCADERO ensure adequate public services for housing constraint on housing development." '(water)
projects." reserves are adequate to allow for reasonable growth as envisioned in
the Land Use Plan."
NONE-Local government"policies(are enacted
to protect the general welfare and to regulate
PASO ROBLES the quality of development,yet)may NOT SPECIFIED
unintentionally cause an adverse effect on the
creation,cost,and availability of housing."
YES 123 units annually(1993),'low and
GROVER BEACH moderate income housing that is resale NOT SPECIFIED "in adopting growth management ordinance,findings
restricted...is exempt from growth management related to resource capacity of water and sewer were made.'
restrictions."
YES, 70 units per vear,with a"mix of
single/multiple dwellings".But"Development
MORRO BAY standards within the city should not pose any NOT SPECIFIED. Contained within 70 unit limit.
constraints on the development of affordable
housing."
YES "development(shall)proceed...only if it can provide a new water
source."If new sources are not found,water can be'freed up'via
PISMO BEACH YES 3%annual rate max.(@129 units) conservation efforts. Potential sources;St.Water Project and County
Nacimiento.Sewerage and Cirulabon also mentioned as possible
constraints.
YES"development impact fees insure developers pay a fair share of the
SAN LUIS OBISPO YES'The regulations are intended to provide a cost for water and sewer facilities'some exemptions made for low
steady rate of about 15Wyr.'(0181 units) income units.'increased water and sewer capacity is needed before
housing can be accomodated."see pgs 39-43 of G.P.Housing Element