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Home My WebLink About02/19/2002, SS 1 - STUDY SESSION ON GENERAL PLAN HOUSING ELEMENT POLICIES REGARDING DOWNTOWN HOUSING CONSERVATION. (ER council Mmh*D�z acEnaa Repout 'ftm" b�sS C I T Y OF SAN LUIS OBISPO FROM: John Mandeville, Community D.evelopment Director Prepared By: Jeff Hook, Associate Plann SUBJECT: STUDY SESSION ON G RAL PLAN HOUSING ELEMENT POLICIES REGARDING DOWNTOWN HOUSING CONSERVATION. (ER AND GPI 197-00) CAO RECOMMENDATION: Consider the Planning Commission's recommendation, the Downtown Housing Workshop comments, and staff suggestions and provide direction regarding implementation of the "no net housing loss"policy in the General Plan Housing Element. REPORT-IN-BRIEF To implement General Plan housing policies and help achieve City housing goals, the Planning Commission recommends amending Chapter 17.86 of the Municipal Code regarding Downtown Housing Conversion Permits. The recommended changes would strengthen housing preservation requirements by 1) enlarging the area covered by the ordinance to include the Downtown Planning.Area (Attachment 1), 2) requiring one-for-one replacement of housing removed by new development, and 3) including specific conditions of approval to address affordable housing standards, tenant relocation and design of replacement units. Amending the Downtown Housing Conversion ordinance is only one of several actions the Housing Element calls for to address housing needs. The City is embarking on a two-year effort to update the Housing Element. Part of that effort will focus on ways to help meet our estimated Regional Housing Needs Allocation (RHNA). Although the RHNA number has not been finally decided, it is likely to be even higher than the City's assigned housing need in the 1990s. An effective housing strategy will need a two-pronged effort: both to increase housing production for all income levels, and to preserve the sound housing it already has — particularly affordable housing. By its nature, downtown housing is often "affordable" housing. The proposed amendment would help achieve the latter objective. The City has other policies that focus on housing production. DISCUSSION Planning Commission Recommendation At its February 28, 2001 meeting the Commission considered public testimony and on a 5:0 vote (Commissioner Peterson absent and one vacant seat): 1. Recommended the Council approve the negative declaration of environmental impact; 2. Recommended.the Council approve the amended Downtown Housing Conversion Permit Ordinance as submitted; l-/ I ' Council Agenda Report—Downtown Housing Conservation Page 2 3. Indicated it would not object to a focus group to review the proposed ordinance amendments if so desired by the Council; and 4. Asked that any change to the draft ordinance return for Planning Commission review. Commissioners suggested staff explore with Council additional incentives for Downtown Housing construction, including grants for rehabilitation of historic hotels and more flexible safety and development standards. Seven persons spoke on the proposed ordinance and most supported greater protection of downtown housing. Attachment 2 contains the Planning Commission minutes. Background Council first identified conversion of downtown housing to commercial uses as a significant problem in 1979, during discussions of Goals For Downtown. At that time, "Downtown" referred to the Downtown core, essentially that area within the C-C zone boundaries. Adopted in 1979, the Goals for Downtown identified protection of housing from conversion to commercial uses as a key goal. In the late 1970s, the US Census showed 237 dwellings with 232 persons living within a 15-block Downtown area. By the mid-90s, the number of dwellings in the same area had decreased 31 percent—a loss of 73 units.' In 1980, the City received a federal grant of$350,000 to fund a Downtown Housing Rehabilita- tion Loan program. As part of the City's commitment to the program, the Council adopted an ordinance to limit the conversion of housing to commercial uses in the Downtown. Prior to this, there were no disincentives to housing conversion. As an outgrowth of the loan program, the City adopted a Downtown Housing Conversion Ordinance in 1981. The conversion ordinance applied to buildings with four or more apartments and to hotels, motels or boarding houses with 4 or more rooms, and required Council approval to convert such housing, contingent upon four findings: conversion is consistent with the General Plan and the Downtown Goals Statement, there is vacant replacement housing available within the City at similar cost to the dwellings occupied by the displaced tenants, cost of building rehabilitation for residential use or its operational costs cannot be supported by future property income, and there are no local, state or federal funding programs available to help rehabilitate or purchase the property for publicly assisted housing. Unfortunately, the ordinance did not stop the conversion of downtown housing. Since its adoption, two downtown housing conversion permits have been issued, allowing a total of 35 apartments to be removed. The last permit was approved in 1986, and since then, no conversion permits have been requested or approved. Nevertheless, downtown housing conversions have continued. This was possible because dwellings were removed in groups of three or less; and consequently,.did not trigger the conversion permit requirement. The loss of housing included 'The SLO Downtown Housing Study prepared in December 1995 shows 164 dwelling units housing 190 persons in the same Downtown area, based on the 1990 census and field counts. r� 1 Council Agenda Report—Downtown Housing Conservation Page 3 59 apartments located on the second and third floors of shops lining Downtown's main streets. This 21-year old ordinance is still in effect, and the subject of the proposed amendment. General Plan Housing Policies Traditional zoning practice in U.S. cities gave "single-family" residential zoning priority over other uses and often discouraged mixing commercial and residential uses. This land use pattern contributed to urban sprawl and the exodus of housing from Downtowns across the United States. San Luis Obispo's General Plan tries to prevent urban sprawl and encourage compact urban form by promoting downtown housing conservation and mixed residential/commercial uses or residential/office uses on the same parcel. Downtown residential uses allow a 24-hour presence that enhances security, provides affordable housing close to jobs, services, shopping and cultural facilities, improves the community's jobs/housing balance, and adds to the Downtown's unique character and "sense of place." To achieve this goal, the Housing Element calls for the adoption of a "no net housing loss" policy in the Downtown core and in mixed-use areas in the Downtown Planning Area. The Land Use Element describes the Downtown Planning Area as the area bounded by Highway 101, the railroad tracks, and High Street. This area includes a wide range of commercial, residential, office, public, cultural and recreational land uses. The City's 1994 Land Use and Housing Elements introduced the term "Downtown Planning Area" to address housing issues in the residential and commercial areas adjoining the Downtown core. Attachment 1 shows the Downtown Planning Area Boundaries and the smaller core area to which the existing Downtown Housing Conversion ordinance applies. To address the comprehensive land use and housing issues in the Downtown Planning Area, the Planning Commission and City Council included policies and programs to prevent further loss of housing, preserve affordable housing, and to achieve other related community goals. The "no net housing loss" policy was a key part of that effort. Typically, Downtown residents have been senior citizens, students and low-income persons who have difficulty finding affordable housing elsewhere in the community. Consequently, the loss of Downtown housing often displaces those who can least afford it. Specific programs addressing this strategy are: H 3.3.2 To maintain housing in residentiaUoffice portions of Downtown, the City will consider adopting a "no net housing loss" policy, requiring that housing units either be maintained, or, in the case of office conversion of existing housing, be replaced on-site or nearby. "Downtown" means the area bounded by Highway 101, the railroad tracks, and High Street. H 3.3.4. The City will adopt a "no net housing loss" policy for existing housing units in the C-C zone by revising the Downtown housing conversion permit process. LU 4.2.1. Existing residential uses within and around the commercial core should be protected, and new ones should be developed. Dwellings should be interspersed with / -3 Council Agenda Report—Downtown Housing Conservation Page 4 commercial uses and should provide for a variety of household types. All new, large commercial projects should include dwellings. LU 4.16.2. Existing residential uses shall be preserved and new ones encouraged above the street level. H3.1.1. The City shall conserve the existing housing supply and prevent displacement of current occupants. H 3.2.1. The City shall discourage the demolition of sound or rehabitable existing housing. H 3.2.2. The City shall discourage the conversion or elimination of existing housing in office, commercial and industrial areas. H 3.2.3. Since older dwellings can often be relocated and refurbished for considerably less cost than for a comparable new dwelling, and since older dwellings may offer spatial and material amenities unavailable in new dwellings, the City will encourage rehabilitating such dwellings rather than demolition. H 3.2.5. The City shall. encourage the preservation, rehabilitation and expansion of residential hotels and other types of single-room occupancy dwellings. H 3.2.6. The City shall preserve landmark and historic residential buildings. H 3.3.3. Identify Office (0) zoned areas around the Downtown Core that are predominantly residential and redesignate them for residential use. The City should redesignate for Office use those areas that are zoned residential but completely or almost completely developed with office. For areas which are a mix of residential and office uses, the City will apply a ResidentiaUOffice mixed-use designation which would allow existing offices to be maintained and replaced, but require replacement of dwellings as a condition of office expansion or replacing a dwelling with offices. What the Proposed Ordinance Amendment Would Do An existing ordinance, Municipal Code Ch. 17.86, requires Council approval to convert four or more downtown dwellings to non-residential uses. The proposed amendment would expand the area requiring a permit from the existing area covered -- the Downtown Core -- to include a larger geographic area designated in the Land Use Element -- the "Downtown Planning Area" , consistent with Housing Element policy. It would require one-for-one replacement of all housing lost through redevelopment or conversion, and set standards for where and how replacement housing is provided. It would also establish specific conditions of approval aimed at preserving affordable units and providing relocation assistance for tenants displaced by new development. Replacement housing could vary in size and design from the housing it replaced. The legislative l-� Council Agenda Report—Downtown Housing Conservation Page 5 draft showing the proposed ordinance amendments in included as Attachment 3. As amended, the ordinance would require developers to replace any dwellings to be converted to non- residential uses on- or off-site with comparable housing. For new development projects in the C- C zone, 25 percent of the replacement units could be located offsite but within the Downtown Planning Area. Specifically, the proposed amendment would: 1. Enlarge the area requiring conversion permits to include the "Downtown Planning Area", as defined in the Land Use Element; 2. Apply to the conversion of one or more legal dwellings in the Downtown Planning Area, and eliminate the four-dwelling unit "trigger" in the current ordinance; 3. Require, as a standard condition of approval, that dwellings to be demolished or converted to non-residential uses be replaced by the developer either on the site of the proposed development project or off-site, within the Downtown Planning Area; 4. For projects of four or more units, allow twenty-five (25) percent of replacement units be located off-site but within the Downtown Planning Area; 5. Require the conversion project to include housing that is affordable to very-low, low- and moderate income persons; and 6. Add a"definitions" section to clarify terminology. Other provisions of the existing ordinance would remain unchanged. Downtown Housing Focus Group After the Planning Commission's endorsement, staff decided a wider airing of the proposed amendment was desirable. On June 11, 2001, the City hosted a lunch meeting for 19 community members representing various perspectives on downtown housing. Focus group members commented on the Draft Downtown Housing Ordinance and its perceived effectiveness in meeting eleven General Plan objectives. Opinions were tallied by means of electronic polling, and the results evaluated and summarized in a report by Strategic hiitiatives, a planning consulting/survey firm. Attachment 4 includes draft minutes of the meeting. Summary of Workshop Results Of the eleven General Plan policies on downtown housing, focus group members assigned the highest importance to maintaining Downtown's synergy created by a mix of businesses, services and housing. Promoting productive land use (including infill and mixed uses) and encouraging new housing downtown were ranked second and third in priority. Accommodating business expansion and respecting private property rights were ranked fourth and fifth, while maintaining existing neighborhoods, and preventing housing loss -- the main purpose of the ordinance Council Agenda Report—Downtown Housing Conservation Page 6 amendments -- were sixth and seventh in importance. Preserving affordable housing, another key objective of the ordinance, was ranked ninth. The group was about evenly split on the effectiveness of the proposed ordinance in preventing housing loss and maintaining existing neighborhoods. In terms of preserving affordable housing, slightly more participants ranked the proposed ordinance as "ineffective" than "effective." These three community objectives were, in fact, among the key objectives in drafting the proposed ordinance. On average, the group also felt the proposed ordinance did not support the objectives of respecting private property rights or accommodating business expansion. These objectives are also important General Plan policies. How the proposed ordinance relates to these policies is discussed below. About half of the workshop participants indicated they would actively oppose the draft ordinance, while the other half indicated they either supported the ordinance or would not actively oppose it. A summary of the workshop results has been distributed to the Council and workshop participants, and is included in the Council Reading File. Workshop participants were presented with information that showed housing in the downtown core was disappearing over time. However, the priorities given to the Downtown goals suggest that participants did not see a strong connection between the goals of preventing housing loss near the downtown core and being able to maintain synergy and productive land uses. This seems to show a disconnect between these two goals, even though housing is widely considered vital in maintaining Downtown synergy, mixed uses and infill development. Property Rights and Downtown Office Conversions Workshop responses indicate that, on average, this group felt the proposed ordinance would preserve housing but would not respect private property rights. The effect of the draft ordinance on property rights has been carefully considered. The proposed ordinance would be consistent with laws and established practices for zoning and land use, and within a charter city's authority to regulate land use and preserve housing. A basic premise of zoning is that it restricts the uses of private property to some extent, and the courts have upheld that premise as a legitimate exercise of municipal authority to achieve the common good. The existing Housing Conversion Ordinance already limits downtown housing conversions to some extent. The use of an ordinance to regulate the use of property is a fundamental tool in managing and planning land use. It is a tool that ensures compliance. Even so, it is not to be enacted lightly. The alternative to an ordinance is a voluntary program. Incentives are often used to improve the participation in voluntary programs. An incentive-based approach was suggested by some of the focus group members. The difference between the two approaches is that voluntary programs, even those with incentives, will not ensure community objectives will be met. The decision to use regulations rather than a voluntary program is typically related to the importance of the community objective being sought. The more important the goal, the more appropriate the regulatory approach becomes to ensure the desired community objective is achieved. Like the General Plan as a whole, this reflects a community value judgment. The existing General Plan Council Agenda Report—Downtown Housing Conservation Page 7 policy that directs the City to preserve downtown housing by establishing a"no net housing loss" policy presumes that the community at large wants to protect the remaining downtown housing. Promoting Business Expansion Some workshop participants felt the proposed ordinance would adversely affect Downtown business expansion. The proposed amendment is intended to have a neutral effect on business expansion. Its primary focus is on housing. The City uses other policies and tools to support and promote business expansion. For example, through the City's Economic Development Program we encourage the retention and expansion of local businesses by providing demographic information, business location assistance, access to a CDBG-funded Revolving Loan Program, and other business-oriented services.. The proposed amendment would not significantly limit opportunities for business start-ups and expansions since conversions would still be possible. Flexibility built in to the ordinance allows changes in the size, design, and location of dwellings to accommodate business expansion and conversion while preserving housing. Recent and planned rezonings will significantly increase the amount of City land available for business expansion. For example, the Mid-Higuera Enhancement Area Plan enlarged the area available for office and retail-commercial development, and the planned Airport Area Specific Plan will add almost 300 acres of new office and commercial-zoned property to the City. A Commercial Zoning Study, currently underway, may also result in expanded commercial zoning, both in terms of area and flexibility of allowed uses in certain commercial zones. The Downtown Housing Preservation Ordinance was not considered in isolation from other General Plan policy objectives and in balance, is not expected to lessen business expansion opportunities. Suggestions From Workshop Participants Workshop feedback can help craft an ordinance that best meets the needs of the entire community, and participants made several specific suggestions. Some suggestions were general and not necessarily intended to be part of the new ordinance; while others were quite specific. Staff has analyzed how they might be implemented. A brief commentary follows each of the suggestions to explain the potential for integrating it into a strategy to accomplish the goals of the proposed ordinance. These suggestions are explored more fully in the "Alternatives" section. 1. Limit the focus of the ordinance to a smaller geographic area, e.g. the C-C zone. Feasible, particularly for the "outer ring" in the Downtown Planning Area; however this approach could limit area-wide "synergy". 2. Increase the allowed residential density in the downtown planning area. Feasible. To be considered as part of the upcoming Housing Element Update. 3. Make the program voluntary. Feasible in connection with strong incentives; however this approach is less likely to produce positive results. . f - 7 Council Agenda Report—Downtown Housing Conservation Page 8 4. Ordinance should require replacement of units at their original size so there is no net loss of residents. Feasibility uncertain. Would require significant increase in allowed density, building height andlor lot coverage to work. 5. Increase downtown height limits. Feasible, although standards already allow building heights Downtown up to 50 feet; and an additional 10 feet for mechanical equipment, antennae and other architectural features. This is tallest height allowed in any zone. 6. Provide incentives to encourage replacement housing, e.g. financial or parking incentives, or expedited development approvals. Feasible—incentives need to be identified. 7. Review city's overall residential zoning to expand new housing opportunities. Feasible, however this would not address the objective of preserving existing downtown housing. 8. Expand C-C zone and in-lieu parking provisions. Feasible and being actively considered. 9. Exempt civic and cultural facilities from the ordinance. Feasible. Downtown Housing Study To encourage new housing at the former Blackstone Hotel and other Downtown locations, Council initiated a Downtown Housing Study using Community Development Block Grant Funds. Completed in 1995 by consultants to the Housing Authority of the City of San Luis Obispo, the study looked at physical and financial constraints and opportunities for downtown housing, showed designs of potential downtown housing projects, and recommended several City policy changes to encourage downtown housing, including a"how-to" manual to aid landowners or prospective housing developers. The study's main recommendations were (asterisked items have been partially or wholly accomplished): 1. Increase allowed density for Downtown core housing from 36 to 60 units per acre. 2. Ask the Architectural Review Commission to develop design guidelines for maintaining architectural compatibility at this higher density. 3. Adopt flexible building codes to allow openings in walls along common property lines for downtown buildings, subject to certain conditions. 4. Relax parking requirements for Downtown housing. 5. Revise "staging area"requirements to make it easier to build in the Downtown area. 6. Designate a staff specialist to help promote housing projects 7. *Seek additional financial resources for housing, and help facilitate the housing approval and permit process. 8. Reduce City development review fees for market-rate housing projects by 70 percent (fees for affordable housing projects would continue to be waived). 9. Provide City grants, loans, or other financial incentives to underwrite up to 20 percent of the cost of developing Downtown Housing. J Council Agenda Report—Downtown Housing Conservation Page 9 10. *Focus initial housing development efforts on the former Blackstone Hotel and the Palm- Monterey Street Block. 11. *Consider formation of a redevelopment district to support Downtown housing. 12. *Encourage housing in Downtown's periphery. Council considered these recommendations and supported their implementation. Many of the recommendations would, if implemented, support the objectives of the proposed housing conservation measures. For example, the City has provided over$1.5 Million in CDBG funds to support affordable housing projects on the edge of Downtown. Most recommendations, however, have yet to be fully implemented. Council earmarked $200,000 in CDBG funds to encourage development of affordable housing in the Blackstone Hotel. Those funds were reallocated due to the lack of private developer interest in developing the property as a public/private venture. In 1999 Council decided not to proceed with forming a redevelopment agency. Even if Council had chosen to pursue redevelopment at that time, the City's consultant determined Downtown was not one of the areas eligible for district formation. Downtown Housing Trends Housing conversions have continued in the Downtown Planning Area since 1981, despite the conversion permit requirement. Changes to Downtown housing by zone district are shown in Table 1. The data shows that the Downtown Area has lost a total of 132 dwellings (Table 1, shaded rows) since 1980, due largely to office conversions. Most of the loss was in the C-C and O (office) zones. In the 1970s and early 80s, most conversions were in the Downtown core. Since the mid-1980s, most conversions were in the Office zone surrounding the Downtown core. These areas, formerly residential neighborhoods, now contain both dwellings and offices. Between 1980 and 2000, there was a net housing gain of 202 dwellings. Most of the units consisted of a few large, apartment projects located in residential zones around the edge of the Downtown Planning Area. One project, a new residential care facility on Marsh Street ("The Manse on Marsh"), accounts for most of the dwellings added in the C-R zone. TABLE 1. No. of Dwellings, Downtown Planning Area By one, 1980-2000 ZONE DWELLINGS, 1980 DWELLINGS 2000 NET CHANGE C-C 249 200 -49 C-R 148 178 +30 C-N 12 4 -8 C-S 14 13 -1 O 223 149 -74 R-1 2 12 +10 R-2 833 915 +82 R-3 737 908 +171 R-4 380 421 +41 TOTALS 2598 2800 +202 1 - 9 Council Agenda Report—Downtown Housing Conservation Page 10 Two large Downtown hotels, the Blackstone Hotel (41 units) and the Wineman Hotel (50 units) are included in the count. Although vacant for many years, they continue to be potential housing since they've yet to be converted to non-residential uses. A third, the Anderson Hotel with 68 apartments mainly for low-income, elderly residents, is occupied and leased to the Housing Authority. How the Ordinance Amendment Would Work The ordinance would apply to all development projects within the Downtown Planning Area that would remove a legal dwelling or convert at least 51 percent of a dwelling's floor area to a non- residential use. A developer would apply for a Downtown Housing Conversion Permit, concurrent with any other required planning approvals, before applying for a construction permit. Conditions of the permit, such as parking or tenant relocation requirements, would be met prior to occupancy of the new use. The new project's design would incorporate existing housing by either: 1) allowing it to remain, 2) remodeling and reconfiguring the units by changing their shape, size, and arrangement, or by 3) relocating units on- or offsite. Three examples might help explain how this could work: Example 1. Convert 40-unit Downtown Hotel to mixed-use retail/office building. A three-story building with ground floor retail and forty 250 square foot single-room occupancy (SRO) units is proposed for conversion to offices above the ground floor. The-ordinance would require at least 75 percent of the existing dwelling units, or 30 units, to be retained on site. 10 dwellings could be relocated offsite but within the Downtown Planning Area by constructing new units. To meet the ordinance requirement and provide additional commercial floor area, the developer would: 1) construct 10 units offsite by adding on or "densifying" existing housing in the Downtown Planning Area, 2) expanding the building footprint to cover up to 100 percent of the site, and/or adding one floor as allowed by the 50 foot height limit in the C-C zone, and 3) reducing and/or reconfiguring the existing dwellings to reduce their total floor area. Parking requirement is met through a combination of providing some parking on site, paying in-lieu fees, leasing off-site parking spaces for limited use (e.g. in public parking garages), and/or restricting occupancy to persons who do not own cars. Example 2. Convert Single-family House to Office in the O-zone. This has been the most common type of housing conversion. A single-story, 1200 square foot house with detached garage in the O-zone is proposed for conversion to offices. The developer has two ways to add office space: 1) convert up to 50 percent of the house floor area to office, and keep the remaining floor area as dwelling. This would require three or four parking spaces — one or two spaces in �J� V i Council Agenda Report—Downtown Housing Conservation Page 11 the garage and two uncovered spaces in a portion of the rear yard, off the driveway. This would yield 600 square feet of office plus a one-or two-bedroom house. 2) convert the entire house to offices and add a new studio unit on the property, yielding 1200 square feet of office plus studio apartment. This scheme would require four parking spaces. On a typical 6,000 square foot lot, the studio apartment (450 sq. ft. maximum floor area) can usually be added over a two-car garage, and 2 uncovered spaces provided in the rear yard. Parking reductions may be possible for shared use if an office employee lives on site. Example 3. Convert Duplex Apartment in the C-C zone to a Parking Facility. A Downtown duplex with two 2-bedroom apartments is proposed for demolition to allow construction of a new parking facility. Two options are being considered: a surface parking lot and a multi-level parking structure. Under the proposed ordinance amendments, at least two dwellings would need to be incorporated into the project. The dwellings could be relocated, reconfigured or reduced in size to provide the best project "fit" and to meet construction codes. The units could be part of mixed commercial- residential development along the street frontage of a parking facility to maintain downtown architectural character and compatibility for such facilities, or could serve as caretaker units for the facility. The City of Santa Barbara is actually building a parking structure with housing. Is An Amendment Needed? Statistically, the loss of 132 dwellings in the Downtown Planning Area seems insignificant when the City's total housing stock of over 19,000 units is considered. Moreover, the housing loss was offset by construction of new housing, resulting in a net gain of 202 dwellings in the Downtown Planning Area from 1980 to 2000. From this perspective, the need for additional regulation of housing conversions does not seem compelling. Attachments 5 and 6 show the distribution of housing in the Downtown Planning Area in 1980 and 2000. When the loss of housing is considered in the context of Downtown's physical changes and the City's overall housing goals, however, the loss assumes greater importance. Housing conversions account for a five percent loss in the Downtown Planning Area and about one-tenth of our projected affordable housing construction from 1994 to 1999. The most significant effects of the conversion of Downtown housing are, perhaps, less tangible than simply looking at units lost and gained. These are related to the City's overall goal of maintaining a diverse, mixed-use downtown character. The General Plan defines a goal and a vision of a Downtown where its residents provide a 24-hour presence and can work, shop, be entertained, get government services and find convenient public transportation within easy walking distance. The proposed amendment would prevent future, potentially more significant housing losses. It would ensure adopted General Plan policies are implemented comprehensively -- that is, by /-I 1 Council Agenda Report—Downtown Housing Conservation Page 12 focusing not only on the need to produce more housing, but also on conserving the sound or rehabitable housing we already have. It would also help prevent the shift of housing from the Downtown and central area to the outer edges of the Downtown Planning Area. Alternative View of No Net Housing Loss A key issue the Council should address is to interpret the team "no net housing loss." The term was introduced in the City's 1994 Housing Element update. The policy was intended to preserve existing housing by requiring each new development project to provide replacement housing on a one-for-one basis, either on-site or nearby, within the Downtown area. The Planning Commission and staff have assumed the policy was to be applied on a lot-by-lot basis. There is, however, another way of looking at the issue of downtown housing conversions. Instead of applying the policy on a lot-by-lot basis, it might also be applied: 1) by zone district, or 2) by the entire Downtown area. So interpreted, the policy would allow removal of units as long as the running total number of units built exceeded those lost through conversion or demolition, within a designated area and time period. For example, as shown in Table 1, the C-C and Office zones show a net housing loss of 123 dwellings since 1980. If "no net loss" were applied on a zone district basis using 1980 as the baseline, projects built today in these zones would trigger the replacement requirement because there is already a negative balance of housing units. Alternatively, the policy might be applied on an area-wide basis, so that as long as the running balance of units gained versus units lost in the Downtown area remained positive, no replacement housing would be required. Under this approach, a downtown development would currently not require replacement housing; since the "net" number of housing units (units built minus units removed) is positive. These alternative interpretations of "no net housing loss" would allow dwellings to be removed as long as construction of new units outpaces conversions or demolitions. They would probably not be as effective in achieving goals for Downtown as the proposed ordinance amendment, since they would tend, over time, to continue to allow the loss of housing in the Downtown core and office-zoned areas and would reduce the synergy resulting from mixed residential and commercial uses. Office Development Implications The City's strategy for preserving Downtown housing has implications for office development citywide. City policies say the City should have sufficient land zoned for Office development to meet the demands of city residents and the specialized needs of County residents. To meet office demands, the City has relied on the conversion or demolition of dwellings to allow offices near Downtown. A 1986 office demand and supply study showed a growing need for large office spaces— a need which could generally not be met in the Downtown area. To accommodate more and larger offices, as well as a wider range of office uses, the City relaxed zoning regulations to allow certain types of offices in the commercial-service (C-S) and manufacturing (M) zones with approval of a planned development rezoning. In 1993, the Broad Street Annexation added about 78 acres of commercial-service zoned land. Since then, the City has actively pursued the /-1 � Council Agenda Report—Downtown Housing Conservation Page 13 annexation of additional land suitable for large office uses, culminating in the planned annexation of Airport Area in the south portion of the City. Of the 1022-acre annexation area, about 274 acres are slated for business parks and service-commercial development that can accommodate some types of large offices. While these changes may have helped reduce the pressure on converting housing to meet office needs, small businesses continue to look for small, existing buildings in the Downtown Area which can be easily and relatively inexpensively adapted for office use. Consequently, there will continue to be a strong demand for small offices close to County courts and Downtown government offices and services. The proposed ordinance amendment would increase the difficulty and cost of converting housing to offices. As a result, one effect of the amendment may be to increase pressure to "relax" office policies in the C-N, C-T and C-S zones. The feasibility of expanding the range of allowed office uses is part of a citywide commercial zoning study currently underway. Land Use Element policy LU 4.2.2 calls for a re-evaluation of Office and Residential zoning in mixed-use blocks surrounding the core. It may help preserve a relatively small number of unconverted houses and apartments remaining in the O zone. Once implemented, the policy would change one or two blocks that are O-zoned but mostly residential back to residential zoning. For those blocks currently zoned "0" and consisting of an equal mix of dwellings and offices, the City could apply a Residential/Office mixed-use zone designation allowing for some expansion of offices. Staff anticipates this rezoning effort will coincide with the Housing Element update, beginning in Spring 2002. Flow Office Space Needs Will Be Met The continuing demand for Downtown offices will be met: 1) through the intensification of existing parcels, combining compatible offices with smaller dwellings, 2) by accommodating some new office development in O and C-R zones areas outside Downtown, such as the Mid- Higuera Enhancement Area, 3) expansion of the C-C zone (the City is currently evaluating its commercial zoning districts. The study includes evaluating an expansion of the C-C zone, northeast along Higuera and Marsh Streets), 4) through intensification and development of Downtown (e.g. the proposed Copeland Court Street Project) and business parks in the South Higuera Street corridor and in the Airport Area, and possibly by 5) broadening the range of allowed office uses in the C-N and C-T zones. Downtown Housing Incentives Planning Commissioners suggested additional incentives might be appropriate to encourage preservation and construction of Downtown housing. They suggested that development requirements be evaluated to provide more flexibility to encourage Downtown housing, and specifically mentioned seismic retrofit, fire sprinkler and parking requirements. Zoning Regulations already provide several Downtown housing incentives. The C-C zone already allows the highest residential density of any zone (36 density units per net acre), allows /-l3 Council Agenda Report—Downtown Housing Conservation Page 14 100 percent lot coverage, and allows payment of in-lieu fees to meet parking requirements. Flexible development standards are also possible in other zones within the Downtown Planning Area. For example, building setbacks and parking requirements may be relaxed by administrative use permit or by approval of Planned Development overlay zoning. In addition, the City has enacted a wide range of housing incentives, including fee waivers, density bonuses and the potential of direct or in-kind City financial assistance through the Affordable Housing Fund. Grants are also available to assist property owners with the cost of seismically strengthening their buildings. Additional incentives, such as those recommended in the Downtown Housing Study, may also be appropriate and are discussed below.. ALTERNATIVES/STAFF SUGGESTIONS 1. Modify areas subject to the proposed Ordinance. The Downtown Planning Area includes nine land use zones with housing. The Planning Area can be further described in terms of the predominant character and uses within smaller "subareas." For example, during the workshop, participants talked about three subareas within the Downtown Planning Area that would be affected by the amended ordinance (Attachment 8). These are the Downtown Core (C-C zone), 2) the C-R and O zones surrounding the Downtown Core, and 3) all other areas within the Planning Area. The last area, since it involves mostly existing residential zoning, is unlikely to experience conversions of dwellings to offices, could be excluded from the ordinance with minimal impact on housing. Staff supports this change, while maintaining the provision in Section 17.86070.E. that allows 25 percent of replacement units to be located offsite but in the Downtown Planning Area. 2. Expand incentives to encourage Downtown housing. Possible incentives may include: A) Increase allowed residential density in the C-C, C-R and O zones.. B) Modify parking requirements for dwellings in the C-C, C-R and O zones. C) Modify building code requirements to encourage downtown housing. D) Provide financial incentives. Increased density would provide an important incentive to both preserve and expand Downtown housing. Attachment 7 shows that some Downtown housing was developed at densities significantly above the current limit. To encourage housing, other quality-conscious cities have adopted higher densities in their downtowns, including Pasadena, Mountain View, and Santa Barbara, along with special design guidelines for high-density housing. More flexible parking requirements may also be appropriate, recognizing that many who choose to live downtown may not own a car and use alternative transportation. For example, the City may consider allowing nighttime use of public parking structures for resident parking, or reduced in-lieu parking fees for housing in the C-C zone. Building code requirements present greater difficulties to modify them in a way that provides incentives without compromising health and safety. Because of the high cost of retrofitting Council Agenda Report—Downtown Housing Conservation Page 15 buildings for seismic safety and sprinklers, developers and property owners argue there's little incentive for modifying or improving existing non-conforming buildings. Moreover, the high cost for rehabilitation or new construction means that typically, higher-rent office and commercial uses will be preferred over residential uses. Staff supports further study of this issue to provide greater flexibility, although the chances of significantly reducing or eliminating these code requirements appear remote. Financial incentives for Downtown housing are feasible, including use of CDBG and Affordable Housing Funds, possible fee waivers or reductions for housing developments, and reduced parking in-lieu fees, to name some possibilities. Staff supports further study of these incentives, with an analysis to return to the Planning Commission and Council as part of the Housing Element update. 3. Change the Conversion Permit process. Several participants suggested streamlining the Conversion Permit process by requiring a simpler Administrative Use Permit approval rather than City Council approval for conversion. Staff supports this approach, provided there are clear, Council-approved standards and conditions to follow in reviewing conversions, and that exceptions to the standards require either Planning Commission or Council approval. 4. Allow up to 100% of the replacement dwellings to be located offsite. Under the proposed ordinance, all of the housing converted would have to be replaced (or preserved) on site, except that in the C-C zone, 25% of replacement units could be located offsite but within the Downtown Planning Area. Replacement units need not be the same size as the original units, but their design would require Council approval. One alternative is to allow a higher . percentage of replacement units to be located offsite. Staff could support a somewhat higher percentage of replacement housing in the C-C and O zones to be located offsite but within the Downtown Planning Area. For example, allowing up to one-third of the replacement units(for projects of three or more units) to be located offsite would give developers greater flexibility to add commercial floor area and maintain adequately sized apartments. Allowing 100 percent of replacement housing offsite is not recommended since it would exacerbate the shift in housing away from the Downtown core. 5. Pay an in-lieu fee for dwellings lost. One option is to allow payment of an in-lieu fee to offset the loss of housing and assist funding of new Downtown housing. Payment of a fee in-lieu of replacing housing may be an appropriate way for new civic or cultural facilities to partially compensate for lost housing. Fees collected could then be used to assist affordable housing elsewhere in the Downtown Planning Area. Payment of an in-lieu fee to compensate for converted housing would be less effective in achieving General Plan goals i Council Agenda Report—Downtown Housing Conservation Page 16 than actually replacing the housing, since it's unlikely such a fee would cover actual costs of replacing the lost dwellings and would exacerbate the shift in housing away from the Downtown core. 6. Use a different replacement rate. The draft ordinance requires a one-for-one replacement of dwellings lost. A lesser ratio, such as a 50 percent replacement rate (one replacement unit for every two dwellings lost for projects with two or more dwellings; and one-for-one replacement for single dwellings). This would help retain some housing while allowing greater potential for increased commercial floor area. Staff would support this change to apply only to hotels, motels, boarding housings or similar single-room occupancy (SRO) dwellings developed at higher densities and at much lower code standards than is allowed/required today. Replacing them at a one-for-one ratio with new, conforming dwellings is likely to be disproportionately difficult, both in terms of design and cost, compared with replacing lower density housing that can be downsized to 'fit". 7. Rezone areas around the Downtown to expand housing opportunities. This would involve rezoning some blocks now zoned for offices but predominantly residential back to residential zoning, or to a new "R-O" classification which gives preference to residential use but allows office or mixed residential-office uses with approval of a conditional use permit in exchange for some form of housing impact mitigation. Staff supports this approach and will pursue it as part of the upcoming Housing Element update, however its effects are likely to be minimal since very few "O-zoned" blocks would meet this criteria. 8. Define "no net housing loss" by zone district instead of lot-by-lot. This would focus housing preservation efforts mainly in the C-C and O zones where there has been a net loss of housing in the last 20 years. Other zones would be not be affected unless their net change in housing units since base year 1981 became negative. This is similar in effect to Alternative 1. Staff feels this approach has merit and that it would largely achieve General Plan objectives. Its disadvantage is that once a zone had a "positive housing balance, the conversion or demolition of individual houses and small apartment buildings is likely to continue as larger development projects make up the difference. 9. Exempt civic and cultural facilities from the requirement. Under this approach, new government buildings, auditoriums, theaters, parking structures or lots, sports facilities and similar uses would not be required to replace dwellings removed. An argument may be made that these uses,by their nature, pose compatibility issues with housing. Public buildings and facilities present unique problems for including housing, such as ensuring compatibility and security for both residents and the facilities. However, these are design issues Council Agenda Report—Downtown Housing Conservation Page 17 that can be solved, and some types of public facilities are being built to include dwellings, in part to provide the additional security that residents provide. Staff does not recommend a blanket exemption, but could support exceptions for civic and cultural facilities on a case-by-case basis, where appropriate. Such exceptions should be based on an architectural feasibility evaluation and include findings to show it is physically infeasible for a new public facility to replace existing housing. 10. Initiate other incentives or changes. Provide other direction to staff on appropriate changes to the draft ordinance, or other measures to implement General Plan policies regarding"no net housing loss." 11. Defer action on "no net housing loss" and consider the policy in the context of the upcoming Housing Element Update. As part of the pending Housing Element update, state law requires cities to consider ways to remove `obstacles to the production of housing" and to consider incentives to encourage housing. A discussion of housing conversion and possible incentives to encourage both housing preservation and production could return to the Planning Commission and Council as part of the update process. 12. Change the "no net housing loss" policy. Initiate a General Plan amendment to delete or modify the "no net housing loss" policy to clarify that it is a goal but not intended to require one-for-one replacement of units lost through demolition,.conversion or redevelopment. Staff does not recommend this approach, since it would hinder efforts to preserve affordable housing and prevent the Cityfrom meeting numerous General Plan housing and land use goals. ATTACHMENTS: 1. Vicinity Map—Downtown Planning Area 2. Planning Commission Minutes 3. Legislative Draft Ordinance (SLOMC Ch. 17.86) 4. Housing Focus group Draft Minutes 5. Downtown Dwellings, 1980 6. Downtown Dwellings, 2000 7. Residential Densities for selected Downtown Properties 8. Downtown Planning Area"Subareas" Council Reading File: 1. Downtown Housing Workshop Follow-up Comments 2. Summary, Downtown Housing Focus group Workshop 3. San Luis Obispo Downtown Housing Study 4. Newspaper articles on Downtown housing in SLO 5. Ten Steps to a Living Downtown 6. Initial Study ER 197-00 jh/1/Downtownhousing/Ccteport2-19-02 ��%��f =111= _�♦ ♦ ■ _111;► `� ♦��,o��``�� ,� !!�`':i •111. � ♦♦ � ► .. IIIIIIII. � �i. 1� . MINE WOMEN MENEM NP 'LIE Vol I Fir WOOD 1-20 RA v � �.'•s. ♦ '�`'�O�♦ ��, ♦♦�� O �� j-,!�!.• ♦�4� iii =.� ♦�♦` ♦, :. ♦ i♦ice�� ♦�� ♦��♦�� . ♦jI�! t �• �♦ ♦ice �� ♦�i.�� i�� I O — OEM !�Ilil !'11111111 111111 �'IMIN III Et= \ Mons \ ►; ....., ='== =m illll =_ Til: _� ■—' � "; . �� .- Planning Commission Minut February 28, 2001 Attachment 2 Page 2 Associate Planner Hook replied that a general plan digest has been produced and consolidation has been discussed, but a timeline or final decision on the matter has not been discussed. Interim Vice Chairwoman Whittlesey asked staff to comment on the City's Senior Center. Director Le Sage noted the City Council has authorized the design phase of a remodel and redesign of the Senior Center on Santa Rosa Street. There were no further comments or questions and the public comment session was opened. PUBLIC COMMENTS: There were no public comments. COMMISSION COMMENTS: Commr. Loh moved to (1) approve the Negative Declaration of Environmental Impact for the Parks and Recreation Element and Master Plan, (2) determine that the Element conforms with the -General Plan and (3) endorse the draft Parks and Recreation Element and Master Plan and forward it to the City CounciiI for final action. Commr. Cooper seconded the motion. Commr. Osborne commented on the City's need for low-cost housing and noted reading a recent newspaper article that described homeless persons being displaced from recently acquired open space. Director Le Sage stated the City is proactive in the Prado Day Center and the EOC Homeless Shelter operations and noted the creeks and open space do not have the facilities to support camping by homeless persons. AYES: Commrs. Loh, Cooper, Aiken, Osborne, and Whittlesey NOES: None REFRAIN: None ABSENT: Commr. Peterson. The motion carried 5-0 with one absence and one vacant seat. 2. Citywide: GPI and ER 197-00; Housing Element Implementation; Downtown Housing Conservation Program, and environmental review of an amendment to the Downtown Housing Conversion Permit Ordinance to implement downtown housing conservations policies; City of San Luis Obispo, applicant. Associate Planner Hook presented the staff report and recommended that the Planning Commission consider the Director's Negative Declaration of Environmental Impact and recommend the City Council amend the Downtown Housing Conversion Permit Ordinance to establish a downtown housing conservation program. Commr. Osborne asked staff to clarify the alternative definitions on page 7 and the statement regarding "relaxing" office policies in the C-N, C-T, and C-S zones on page 8. 1-1 g Planning Commission Minu, ATTACHMENT 2 February 28, 2001 Page 3 Commr. Loh expressed concern with losing housing in the downtown core and felt future residential-to-nonresidential conversions should occur at a one-to-one replacement ratio. She commented on the importance of preserving the City's downtown historical resources and maintaining the City's master list of historic structures. Commr. Aiken questioned staff on that factors that determine residential remodels as opposed to conversions. Commr. Cooper noted the City of San Rafael has incentives built into a similar regulation such as reduced parking requirements and density bonuses. Associate Planner Hook reviewed existing City housing incentives and stated the City's Affordable Housing Fund is growing through in-lieu fees paid by developers. He noted the City also has a Housing Rehabilitation Program that has been mostly used for mobile homes, but is available to low-income property owners throughout the city. Interim Vice Chairwoman Whittlesey had staff provide the status of Housing Element Policy 3.3.3. Commr: Aiken felt that office-to-residential re-conversions should be encouraged. There were no, further comments or questions and the public comment session was opened. PUBLIC COMMENTS: Jan Durocher, 1415 Morro Street, commended the Commission for its efforts to preserve San Luis Obispo and commented that developers prefer constructing commercial structures rather than residential structures because residential is much more expensive to build and maintain. She suggested encouraging the integration of housing in commercial areas to help preserve the downtown. Marilyn Russo, 1316 Peach Street, expressed concerns with housing-to-commercial conversions in the city and felt that residential neighborhoods are being impacted by adjacent commercial uses. At the request of the Commission, Associate Planner Hook reviewed incentives for increasing housing in the downtown core and for in-fill projects. Steve Skeeto (Inaudible), 1531 Santa Rosa Street, felt the City's is on the right track with the item before the Commission. Judy Purtrack (Inaudible), 2862 Buckingham, noted she was having difficulty distinguishing between the current ordinance and the major provisions of the proposed ordinance. She felt caution should be exercised with this type of proposed policy in relation to established residential neighborhoods. 1-19 Planning Commission Mlnl 1 ATTACHMENT 2 February 28, 2001 Page 4 Pat Dempsey, address unstated, felt traffic controls should be considered in residential areas with increased traffic or density. Zoning on busy streets should be higher than R- 2. Elaine Simmer, 1068 Pacific Street, expressed strong support for mixed-used neighborhoods. Charlie Senn, 178 Broad Street, noted the General Plan states offices are desired in the downtown and the General Plan and Zoning Regulations require certain uses downtown, but there is a shortage of general downtown office space. He felt incentives could help encourage market investment in the downtown and suggested that a committee be formed to further address the issues. Seeing no further speakers come forward, the public comment session was closed. COMMISSION COMMENTS: Commr. Loh moved to recommend. to the City Council approval of the Director's Negative Declaration of Environmental Impact. Commr. Aiken seconded the motion. AYES: Commrs. Loh, Aiken, Cooper, Osborne, and Whittlesey NOES: None REFRAIN: None ABSENT: Commr. Peterson The motion carried 5-0. One absence and one vacant seat. Commr. Loh moved to recommend that the City Council (1) amend the Downtown Housing Conversion Permit Ordinance to establish a downtown housinq conservation program as recommended by staff, (2)_ preserve the city's landmark and historic buildings and resources with the aid of the City's Cultural Heritage Committee and (3) direct staff to explore additional incentives such as safety grants for earthquake retrofits, flexible parking standards and possible other forms of incentives.. Commr. Cooper seconded the motion. Interim Vice Chairwoman Whittlesey suggested that language regarding historic building preservation could be included on page 14, Exhibit 4, under 17.86.20, Purpose and Intent. Commr. Loh noted parking and seismic retrofits are problems associated with the downtown core area. Commr. Aiken felt developers should be encouraged to participate in city programs. AYES: Commrs. Loh, Cooper, Aiken, Osborne, and Whittlesey NOES: None REFRAIN: None ABSENT: Commr. Peterson The motion carried 5-0. One absence and one vacant seat. Planning Commission Mini ATTACHMENT 2 February 28, 2001 Page 5 Commr. Aiken moved to recommend that the if City Council feels additional information is needed that an ad hoc committee be established to evaluate ways to encourage downtown housing and that the committee be directed to report its findings back to the Planning Commission. Commr. Osborne seconded the motion. AYES: Commrs. Aiken, Osborne, Cooper, and Whittlesey NOES: Commr. Loh REFRAIN: None ABSENT: Commr. Peterson The motion carried 4-1. One absence and one vacant seat. COMMENT AND DISCUSSION; 3. Staff: A. Agenda Forecast: March 14 — Meeting canceled. 4. Commission: Commr. Osborne requested that agenda packets be sent out one day earlier. ADJOURNMENT: With no further business before the Commission, the meeting adjourned at 9:23 p.m. to the next regular meeting scheduled for March 28, 2001, at 7:00 p.m. in Council Chamber. Respectfully submitted, Leaha K. Magee Recording Secretary attachment 3 Legislative Draft of Proposed Amendments to Chapter 17.86 DOWNTOWN HOUSING CONVERSION PERMITS Sections: 17.86._010 I'itlel�}tl )EfS@ ififi1E1 3t}t@tid- 17.86.020 Purpose and Intent..` ex 4 17.86.030 Area of ApplicationLand-tLss �z 17.86.040 DefinitionsPei-mi i d 17.86.050 Land Uses Pea!ien: 17.86.060 Permit Require Finding!; d, 17.86.070 Public Hearins - NOtifticationCtm-44-i 4+Tfmwa1: i. Findings Required. ii. Conditions of Approval. iii. Interpretation and Conditions. iv. Severabilitv. i4,17 86 10 Title: This ordinance shall be called the Downtown Housing Conservation Regulations. 17.86.0420 Purpose and intent. It is the desire and intent of the city to preserve housing in the Downtown Planning Area. including the Downtown Core or retatn4R-) -in he central business district. It is also the intent of the city to reserve housing that is affordable to very-low, that dais "aria• g :rHetrltl prca�ice sf�elxlrfa low- and moderate_income households and to encourage mixcd residential and commercial office uses, where appropriate to implement General Plan goals.} yens-_The provisions of this chapter are intended to achieve these goals by regulating the conversion of downtown housing to nonresidential uses. (Prior code § 9900) 17.86.0320 Area of application. Provisions of this chapter shall apply to eei,tain t yp , es resideiiiial laii' es within POFH(MIS afthe downtown area shown ion Figure 1 (Figure I revised as indicated in stiff report). i. Definitions. Non-residential Use. Anv land use other than "dwelling " ``boarding or rooming houses" or "dormitories." "residential care facilities" or "caretakers' quarters'°as defined by the Zoning Regulations and listed in Table 9. Chapter 17.22 of the Municipal Code. Development Proiect Any public or private action for which a City construction permit or planning pproval is required including architectural review, use permit variance subdivision or other approval. -- ' ATTACHMENT 3 Downtown Planning Area. 'I'lie central part of the City, generally bounded by Highway 101, the railroad and llhvh Street, including the commercial core and historic residential neighborhoods (Figure 1). Downtown Core. That central downtown area of the City zoned "C-C" (Central Commercial) in the most recently adopted Zoning Map. Conversion. A change in the primary use of at least 51 percent of the floor arca of a legally pennitted dwelling or building from residential to non-residential use. or physical change in design of 51 percent of an individual dwelling's or building's door area to accommodate non-resident4d uses. Replacement Unit. A dwelling unit built. moved or remodeled to replace a dwelling lost through demolition or remodeling or conversion to another use. Remaininij Unit. A dwelling unit which existed prior to the conversion permit request and which will remmun as part of the new development project. 17.86.0530 Land uses affected. Provisions of this chapter shall apply to all Fen,, al land uses that"life# contain one or 4�4more dwelling units and to all hotels, motels or boardinghouses which have four or more individual rooms for rent. (Prior code § 9902) 17.86.O(AO Permit required. Before any residential land uses regulated by this chapter are converted to nonresidential use, a conversion permit must be approved by the council. (Prior code § 9903) 17.86.0730 Public hearing- Notification. Prior to acting on applications, the council shall hold a public hearing, notice of which shall be given to the residents tenants of the proposed conversion and posted on the property at least ten days beforehand. (Prior code § 9904) 17.86.060 Findings required. In order to grant a conversion permit, the council must find that approval of the permit is consistent with the adopted San Luis Obispo general plan and specifically with Housing Element policies promoting the preservation of Downtown housing} affordable housin;o, and mixed uses and the atejmei-t. (Prior code § 9905) 17.86.070 Conditions of approval. The council may establish conditions of approval which provide for the general health, safety and welfare of tenants displaced by the proposed development and that ensure there will be no net loss of housing units in the Downtown Planning Area. Such conditions shall include. but arc not limited toe + --efsion--iii Ele- v�iTlrz4i"414e g: 1-�3 ATTAC;` mHT 3 A. Vacation of Unit. Each tenant shall have the right to remain not less than sixty days from the date of council approval of a conversion permit. The council may grant an extension to this right to remain for a period of time not to exceed an additional thirty days. B. No Increase in Rent. A tenant's rent shall not be increased during the period provided in subsection A of this section. (Prior code § 9906) C. Replacement of Units. Developer shall he responsible for rcplacin2 dwellina units lost through demolition, remodeling or conversion to non-residential users. whether the units to be removed are occupied or not. Dwellings shall be replaced on a one — for- one basis. Replacement units may be of any sire, type. or tenure, consistent with Zoning Regulations and as determined appropriate by the City CotmC:il. D. Affordabilitv of Units. The project shall include dwellin2_units affordable to low and moderate income persons, at rents or sales prices that meet the City's Affordable Housing Standards. The percentage of the total housing units, including both remaining and replacement units, which must be rented or sold at affordable levels shall equal the maximum percentage of affordable dwellings existing within the 24-month period prior to the application for the conversion permit, but in no case less than that required under the Affordable Housing Requirements in the Citv's Housing Element. The developer shall provide certified. written documentation of rents to establish the percentage of total dkvellings which must be rented or sold at affordable levels, pursuant to the City's Affordable Housing Standards. The number of dwellings provided at each incorne level shall be comp;uable to the number that exiscc,dbefore theconversiog request, as determined by the Citv Council. E.Location of Units. For projects consisting of four or more units. twenty-fiv. (ti) percent of the replacement units may be located off-site but w_ftr. the Downtown Planning Area. For projects consisting of' three or fewer units_, all replacement units shall be located on the site of the proposed development. F. Timing of Replacement. Replacement unitS should generally be built concurrently with the new development. G.Tenant Relocation Assistance. For very-low or low-income residents displaced by the conversion project. the developer shall provide relocation assistance to the approval of the City Council. Such ZISSkLancc shall include, but is not limited to: giving tenants the first right of refusal to purchase or rent affordable replacement units, reimbursement of moving costs, and providing rental assistance. 17.86.95 Interpretation and Conditions. The Council shall interpret these requirement~. subject to applicable codes. policies and City procedures. Approval conditions may be added, modified or deleted upon making written findings that describe how the changes better achieve the intent of the General Plan than the standard conditions of approval. ATTACHMENT 3 17.86.96 Severabilitv. If anv provision of this chapter or the awlication thereof to anv person or circumstances is held invalid, the remainder of the chapter and the application of the provision to other persons or situations shall not be affected thereby. Alt Aiowntcwnh•msimAca Mative drill of amcndments as 1 Attachment 4 DRAFT DOWNTOWN HOUSING PRESERVATION WORKSHOP SAN LUIS OBISPO CITY HALL (Room 9) MEETING MINUTES JUNE 119 2001 The Downtown Housing Preservation Workshop was convened at 11 a.m. on Monday, June 11, 2001, in the Council Hearing Room (Room 9), City Hall, 990 Palm Street, San Luis Obispo, California. WORKSHOP PARTICIPANTS IN ATTENDANCE: Carlyn Christianson, ACTION For Healthy Communities Linda Dalton, Cal Poly University Steve Del Martini, The Real Estate Group Bruce Fraser, Fraser Seiple Architects Ginni Griffin, Downtown property owner Pam Heatherington, ECOSLO Dennis Law, Andre Morris and Buttery, Attorneys Al McVay, Vintage Properties George Moylan, Housing Authority of the City of San Luis Obispo Pierre Rademaker, Rademaker Design Anita Robinson, Mission Community Bank John Rosetti, Rosetti and Company Biz Steinberg, Economic Opportunity Commission of SLO County Scott Smith, People's Self-Help Housing Corporation Mike Spangler, SLO Property Owners Association Tom Swem, Downtown Association Patricia Whitmore, SLO Chamber of Commerce Doug Wood, Doug Wood Associates Absent: Howard Carroll, Property Management George Rosenberger, County of San Luis Obispo Staff: Betsy DeJarnette, Deborah Holley, Jeff Hook, John Mandeville Moderator: Chuck Anders, Strategic Initiatives Mr. Anders welcomed workshop participants and reviewed the agenda and workshop objectives. He explained the "interactive polling technology" that would be used to collect and analyze the participants' views on the relative importance of eleven community objectives and the draft Downtown Housing Conservation Ordinance's perceived effectiveness in addressing those objectives. He explained the "ground rules" for the workshop and introduced John Mandeville, Community Development Director, and Jeff Hook, Project Planner, who described changes in Downtown housing since 1980 Downtown Housing Ordinance V___shop ATTAr.14p,TENT 4 June 11,2001 Page 2 ,and explained the draft Downtown Housing Ordinance that had been endorsed by the Planning Commission. Mr. Hook noted that the proposed ordinance was intended to meet a policy in the General Plan Housing Element calling for "no net housing loss" in the Downtown Planning Area. He said the policy grew out of a realization in 1993, when the Housing Element was adopted, that simply building new housing was not enough to meet our housing needs. Council felt it was also important to preserve the housing we already had. He added that the ordinance is intended to balance housing preservation with Downtown office development, while preserving Downtown character. Mr. Anders then led a discussion regarding the draft ordinance objectives. Workshop participants then voted on the ordinance's perceived effectiveness in meeting several community objectives. Linda Dalton commented on the importance of finding the appropriate balance between housing preservation and economic vitality. Anita Robinson suggested that the ordinance address special needs housing. Mike Spangler felt it was already too difficult.to develop projects in the C-C (Downtown) zone. He felt this ordinance would further discourage new Downtown development and would like to see this as a voluntary program. He suggested one way to encourage housing was to increase allowed building height in the Downtown. Doug Wood felt the ordinance addressed three different "tiers" or areas to which the ordinance applies. He suggested that the ordinance may need to focus on tiers 1 and 3 (C-C zone and residential/office areas surrounding Downtown). Bruce Fraser suggested that the City consider intensification of other zones in the Downtown Planning Area to allow higher residential density as an incentive to encourage housing. Pierre Rademaker felt that the 36 density units per acre in the Downtown was a "wet blanket" and needed to be significantly increased to truly encourage housing development. Carlyn Christianson felt the ordinance should require developers to build the same size of dwellings as those lost through conversion so that there is no net loss of residents. Bruce Fraser felt the City should promote mixed-uses Downtown by linking housing to commercial development potential. Tom Swem felt the ordinance would do nothing to increase housing. He indicated he might not oppose an ordinance if it include adequate incentives to increase housing. �a� Downtown Housing Ordinance X,-, shop ATTR C H AMI E N T 4 June 11,2001 Page 3 George Moylan suggested providing general statements of incentives in the proposed ordinance. Steve Del Martini would like to see parking incentives included. Linda Dalton suggested changing the ordinance to streamline the development review process and to allow development approval of housing conversions at the administrative level or by right. Bruce Fraser suggested that bed and breakfast inns and hotels be counted as residential units. Carlyn Christianson felt that the City should be considering higher residential densities throughout the City, not just Downtown. As an incentive for housing, Tom Swem suggested waiving permit fees for new Downtown housing and providing grant funds to help housing developers. Mike Spangler felt the City should provide affordable housing on floors over its public parking lots. Steve Del Martini wanted to see how the proposed ordinance would work physically and economically. Dennis Law suggested allowing developers to meet a higher percentage (higher than 25 percent) of the Downtown housing replacement need under the proposed ordinance by building housing in the R-1 zone. Linda Dalton cautioned that density increases in residential zones need to be carefully planned. She felt Downtown was the best place to focus on residential density increases. John Rosetti felt the loss of Downtown housing had not been significant. He felt the office supply was very limited and conversions were necessary to allow adequate office space near Downtown and government offices. Pierre Rademaker encouraged increased density for market rate and high end housing as well as affordable housing, in the Downtown. He felt the City should consider zone changes on opposite sides of streets, rather than simply on a block basis. Bruce Fraser suggested exempting civic and cultural facilities from the ordinance. Tom Swem said he wasn't sure this ordinance is the right solution for preserving Downtown housing. Mr. Hook noted that housing incentives were important, that wasn't the original purpose of the Downtown Housing Conversion ordinance. Its purpose is to preserve the housing T 4 N r Downtown Housing Ordinance Workshop ATTACNkt,P+.,_r June 11,2001 Page 4 we already have. He said the City has already adopted affordable housing incentives and described incentives already available to developers. Mr. Anders discussed the results of the polling and noted that he would prepare a detailed report later for distribution to the workshop participants. Additional discussion followed regarding Downtown housing incentives. Most participants felt that the additional housing requirement in the proposed ordinance should be offset with development incentives. Possible incentives identified included: • Change zoning to increase C-C area in size by a block or two, maybe create a Residential/Office zone too. • Look at zones street by street. Different approaches work with different areas. The whole downtown planning area is not the same. • Expand building "envelope" limits. • Raise building height limits in the Downtown. • Increase Downtown residential density limits (probably the most important incentive to the group.) • Change building code requirements to streamline development approvals and reduce costs. • Explore funding opportunities to assist Downtown housing (grants, lending alternatives, Affordable Housing Fund). • Require declarations of"no car ownership" for high density downtown core residents. • Rate proposed projects according to how well they meet objectives and award • permits accordingly, instead of "first in line gets the go-ahead" method. • Commit city land to housing--build dwelling units on top of public parking lots. • Allow in-lieu structured fees, waiver of fees, and so on. • The ordinance should be as specific as possible about "what you will get" so developer knows going in to a project what might work. But be flexible and location-specific, not so rigid that developers can't custom-design projects. The downtown is a very small but diverse area and one solution does not fit all situations. Allow some staff interpretation of ordinance and rules and don't have every project require City Council approval. Workshop participants indicated they would be willing to meet again to discuss the ordinance. With no further business, the workshop adjourned at 2:00 p.m. jhNdowntownhousing/workshopmin6-1 1-01 �-aq VIA MIN Aw � ♦ � � �� ♦ ♦ ice' ♦ oil • • of ••• • 111 WHO ► � �� i � �� , i�!`, ��`��♦gyp` AWN 1 � � � ��♦ ♦ 'moi ��`I � ♦I �• pp♦ ��4 Attachment 7 January 2, 2002 RESIDENTIAL DENSITIES FOR SELECTED DOWNTOWN PROPERTIES � '( i i " �• i�'__ �. .d.76I.r." jlp?fNi � rr 3iII" r£+ 'vk vu�a(� �. y'.. u , 955 Anderson 68 studios 0.33 C-C 36 102 M onterey Hotel Muzio's 6- 1 0.12 C-C 36 33 ntere Grocer bdrm 6 Morro Granada 18 studios 0.28 C-C 36 32 Hotel 781 Marsh E.E. Long's 17 studios 0.16 C-C 36 55 1113 Broad San Luis 4— 1 0.16 C-C 36 17 Hotel bdrm. 762 Higuera Warden 10- 1 0.52 C-C 36 13 Block bdrm 891 Mill Berkemeyer 16- 1 0.42 R-4 24 25 Apartments bdrm 667 Leitcher 17 studios 0.29 O 12 29 Monterey Apartments 1212 Garden St. 11 studios 0.17 C-C 36 46 Garden Inn 2 - 1 bdrm 1 -2 bdrm 345 Marsh Travelodge 1 51 studios 1 0.84 C-R 1 36 30 Vacant 846 Cornerstone 41 studios 0.17 C-C 36 121 Monterey Building 849 Higuera Wineman 50 studios 0.51 C-C 36 49 Hotel Jh/Udowntownhousing/downtowndcnsities l-3� .: a 2:! F - ' Alk � a 11;'1 O'A' - / I / i+ i r < 000, �io��l��>� i!!!�0 ,; / 1\� �►�..;, ;W 00, 01 A Feb 19 02 02: 1 1 oP Rcssetti company .MEETING 'AGENDA J, C I ITEM #. ROSSETY1 COMPANY COMMERCIAL REAL ESTATE February 19, 2002 BROKERAGE PROPERTY MANAGEMENT DEVELOPMENT 1065 Higuera Suite 301 San Luis Mayor Allen Settle and Members of the Council 805.544.03900 tel 93401 City of San Luis Obispo 803.544.3922 fox 990 Palm Street info@rossetticompany.com San Luis Obispo, CA 93401 QIdNCIL RtCDD DIR VIA FACSIMILEL�'(H SOT p FIN DIR (805) 781-7109 [_ ❑ FIRE CHIEF FLEORIKIORIG NEY ❑ PW DIR Re: Amendment of Cha ter 17.86 of Munici al Code ❑ REC DIPOUCCHF P P O 9 PT EADS ❑ REC DIR Downtown Housing Conversion Permits fid' ❑ UTIL DIR ❑ HR DIR Dear Mayor Settle and Members of the Council: aP.vc As you may know, I have been an active commercial real estate broker for 27 years, the last 25 of which have been in San Luis Obispo, with particular focus in the downtown area. I am a graduate of the University of Southern California School of Business with an emphasis in real estate and finance. In addition, I was a member of the Downtown Housing Focus Group which convened on June 11, 2001 and I am an active community member who loves our town. I understand that Staff has worked hard on this amendment; however, I believe that their report may not strongly emphasize the reaction this varied group had to this ordinance. The reaction was not favorable; in fact, this group identified many problems. To summarize this group's feelings would be to say that they felt that in attempt to solve one problem, the amendment may make the retention of downtown business much more difficult. I share this feeling. It is difficult at present to find available, affordable office space in the downtown area. If this ordinance is passed, it will quite likely prevent or severely curtail the expansion of office space in the downtown. This will most likely result in more pressure on the City to allow office uses in other parts of our city, and cause a different, but none-the-less unattractive type of sprawl. This city's long standing policy of keeping office uses downtown as a means of keeping our downtown active and strong has worked very well over the years. Let's not inadvertently weaken that policy, in an attempt to solve another perceived problem. There may be a better solution. 37!� FES) ED 20C? John Rossetti UNCIL J R/dt / . Member at. council j ac En as nEpoat 1�Nb�c- CITY O F SAN LU I S O B I S P O FROM: Lee Price,City Clerk SUBJECT: COUNCIL MINUTES:January 29,2002 and February 8,2002 To be distributed at a later date. ' N, MNG AGENDA DATE �-�q-Da ITEM#.= council rnEmouanaurn [City of San Luis Obispo DATE: February 19, 2002 TO: Mayor& Members of the City Council . VIA: Ken Hampian, CAO FROM: Lee Price, City Clerk W'CNCIL El CDD DIR� VFINR HIEF SUBJECT: Revisions to the Minutes of February 5, 2002 MLERIIK/CAIGNEY R ❑JOUCE CHF C3 RPlease note the following corrections to the Minutes of 2/5/02: �HAD Y"aIL AIR UTI6 DIR _ CO HR DIR Pages 2 & 3: C7. CONTRACT AMENDMENT FOR DAMON-GARCIA SPORTS FIELDS. Move the "action"and correctly idents the motion maker and second. The action following the discussion shall read: ACTION: Moved by Schwartz Settle to amend the preliminary Design Services Contract with FIRMA in the amount of$56,478 to cover the inclusion of the design of Prado Road in the project, additional costs resulting from revisiting Prado Road alignment, and issues associated with the permitting requirement for the Army Corps of Engineers;motion carried 5:0. Page 6: 2. PARKING & ACCESS ADVISORY BODY—REPORT ON ALTERNATIVES. Complete the sentence describing Mayor Settle's position on the matter, to read as follows: Mayor Settle indicated that he would prefer that the Planning Commission be given the opportunity to have an enhanced role, as described in Alternative A, and stated that a new: commission would involve a lot of staff time. Co tiow to Am=