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10/01/2002, B3 - COUNCIL REVIEW OF DRAFT REGIONAL HOUSING NEEDS PLAN.
r RED FILE ��I�IIIIIIIIIIIIIIIIIIIIIII �IIIII MEETING AGENDA VIII III ff II II City Of SM MIMI /ezl / *4 990 Palm Street, San Luis Obispo, CA 93401-3249 October 1, 2002 Q'COUNCIL p CDD DIR MEMORANDUM SAO ❑ FIN.DIR L9'��CAO 13 PIRI=CHIEF TO: City Council GI-ATTORNEY d PW OIR L�CLERKt0R10 d POLICE CHF VIA: Ken Hampian, City Administrative Officer W�1 ❑ EP HEADS ❑ REC DIR FROM: John Mandeville, Community Veellopment Direct ❑ UTIL DIR BY: Jeff Hook,Associate Planned-7 � ❑ HR DIR SUBJECT: Council review of Draft Regional Housing Needs Plan. Council member Marx asked that an alternative be provided for tonight's meeting in case Council chose to appeal the City's draft housing need allocation of 5,450 dwellings. That alternative is provided below. It proposes a lower housing allocation for San Luis Obispo City based on revised assumptions about job growth. This type of alternative was discussed in concept at the September 12`s workshop that Council members attended. Page 3-4A of the Council Agenda Report also makes reference to this process. The additional information,and resolution provided here can be used by the Council in this alternative recommendation to SLOCOG. The City appealed its regional housing needs allocation in 1993 on similar grounds. That appeal was unsuccessful, despite strong City arguments based on economic factors and resource constraints. A high job growth estimate is driving the City's relatively high housing need allocation. SLOCOG's allocation formula assumes that the number of jobs in San Luis Obispo will grow by 43 percent in the next seven and one half years. There are two concerns with the job growth estimate: 1) the City's estimate includes large employment generators with employment outside City limits, including Cal Poly, Cuesta College, County government, San Luis Coastal Unified School District, businesses in the unincorporated County area, and the California Men's Colony, and 2) projected job growth is based on the assumption that actual job growth in the period from 1991-1999, a period of rapid job expansion, will continue into the future. This is a highly unlikely assumption and fails to take into account job losses – particularly in technology industries – that have been concentrated in San Luis Obispo in 2001-2002 and are likely to continue to affect the job market well into the planning period. To adjust for these inconsistencies, a lower job growth rate factor should be used for the City. There is data to suggest that a more accurate job growth estimate would range between 25 – 30 percent instead of SLOCOG's assumed 43 percent. A reduction in the projected job growth would significantly reduce.the City's share of the region's housing need. �tCO, The City of San Luis Obispo is committed to include the disabled in all of its services, programs and activities. ` Telecommunications Device for the Deaf(805) 781-7410. Draft Regional Housing Needs Plan Page 2 A clarification is needed here. Technically, the Council is commenting on the Plan and may suggest changes to the City's assigned need up to the closing of the public comment period on October 8`s. This is not the time to "appeal", since legally the plan has not yet been adopted. On October 9`s, SLOCOG will consider cities' and counties comments and has up to 60 days to respond to those comments, either by accepting the proposed changes, revising its earlier determination, or maintaining its original determination. SLOCOG is expected to make that decision on October 9h to expedite the review process. If SLOCOG does not accept the proposed revision, the City has 30 days to request a public hearing to "review the determination" — in essence, appealing SLOCOG's action. At appeal hearing SLOCOG may accept the proposed revision, modify its original determination or again reject the proposed change. If the City's appeal is rejected, state law requires the City to use either the originally assigned need or modified need number in the Housing Element update. Upon City request, state law provides for judicial review of SLOCOG's determination, pursuant to the state Code of Civil Procedure. ALTERNATIVE Adopt a resolution proposing a revision to the Draft Regional Housing Needs Plan to reduce the City's Projected Share of Job Growth from 42.91 percent to 25 percent. Attachment: Draft Council Resolution 1h:Uccmem 10-1-02 RESOLUTION NO. (2002 Series) A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO PROPOSING REVISION OF THE REGIONAL HOUSING NEEDS PLAN TO REDUCE THE CITY OF SAN LUIS OBISPO'S PROJECTED SHARE OF JOB GROWTH FROM 42 PERCENT TO 25 PERCENT WHEREAS, the City Council has held a public hearing to consider the Draft Regional Housing Needs Plan and supporting information prepared by the San Luis Obispo Council of Governments (SLOCOG); and WHEREAS, the City Council recognizes the importance of meeting the City's housing needs for all income groups and to address the urgent need for affordable workforce housing; and WHEREAS, to help meet this need, Council desires to cooperate with the San Luis Obispo Council of Governments by establishing an equitable and comprehensive method for allocating housing needs among the cities and unincorporated County based on a regional housing need number provided by the State Department of Housing and Community Development (HCD); and WHEREAS, SLOCOG has proposed allocating a housing need of 5,450 dwellings to be accommodated within the City of San Luis Obispo between January 2001 and July 2008, based on the City's projected rates of job and population growth compared to the County of San Luis Obispo as a whole,plus an adjustment to maintain a five percent vacancy rate; and WHEREAS, Council has determined that technical assumptions underlying the City's allocation overstate job growth by including employment growth located outside the City limits and by assuming that past, unprecedented job growth rates in the previous decade will continue into the planning period, despite recent, significant job losses in San Luis Obispo due to nationwide economic conditions. BE IT RESOLVED by the Council of the City of San Luis Obispo that based on its deliberations and in consideration of public testimony, the staff report, and state law, the following: Council Resolution No. (2002 Series) Page 2 SECTION 1. Regional Housing Needs Plan. Council recommends that the Draft Regional Housing Needs Plan be adopted, under protest, reflecting a state-assigned regional need of 18,035 housing units. SECTION 2. Housing Need Allocation. Council proposes that the Draft Regional Housing Needs Plan be revised to show a Projected Share of Job Growth for the City of San Luis Obispo of 25 percent for the planning period. Council further proposes that the resultant Total Projected Housing Need, based on this revised job growth projection, be included in the updated Housing Element. In so doing, Council recognizes that the total housing needs identified in the Plan may exceed available resources and the community's ability to satisfy this need within the content of the general plan requirements outlined in state law, and that under these circumstances, the quantified objectives for housing development need not be identical to the assigned housing needs. SECTION 3. Support for Efforts to Reform the State Regional Housing Needs Process. Council recommends that SLOCOG and its member jurisdictions work with the California League of Cities, the California Association of Councils of Governments, and the American Planning Association to reform the regional housing needs allocation process through legislation that considers regional population projections, resources, and improves inter-county equity and addresses conflicting state laws. SECTION 4. Establishment of a SLOCOG Subcommittee. Council supports the establishment of a subcommittee of representatives from SLOCOG member jurisdictions to work with state and local agencies to implement reforms to the regional housing needs allocation process, as described in Section 3. SECTION 5. 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 , 2002 Mayor Allen Settle ATTEST: Lee Price, City Clerk APPROVED AS TO FORM: fr . Jo e e , Ci Attorney Jh/l/regionalhousingneeds/ccrese 10-1-m_ SEP-29-2002 21:27 Jan 8055412239 P.01/04 DECEIVED EnNG AGENDA SEP 3 0 2002 DATE J6 !' U 2- ITEM # _ 3 CITY CLERKUNCIL ❑ COD DIR QOPAO I: FIN DLR Memorandum 6eA0 0 FIRE CHIEF [Y PINEY 0 PW DIR K/ORIO ® POLIOS CHF H DS 0 REG DIA To: Mayor& City Council . 0 UTIL Ole From: Jan Howell Marx, Vice Mayor v d HR DIR- Re: Government Code Provisions Concerning�?tate Housing Quota Date: September 30, 2002 — The staff report lists no alternatives to the CAO recommendation. My esearch in t e e ent Code and discussions with an attorney specializing in Housing Elem aw(letter attached) shows that other alternatives AQ exist. In my opinion these alternatives nee o explored at this time. Government Code Research: A. The city hats the duty to consider the city's entire general plan in addressing housing needs. 66580(e) The Legislature recognizes that in carrying out this responsibility (to provide housing of all economic segments of the community), each local government also has the responsibility to consider economic, environmental, and fiscal factors and community goals set forth in the general plan and to cooperate with other local governments and the state in addressing regional housing needs. B. A Housing element need not establish programs to meet all identified needs, but need only establish the maximum number of units that can, be provided or improved in. light of"available resources and the community's ability to meet the need." 65583(b)(2) It is recognized that the total housing needs identified.-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(commezncing 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. C. There is no duty to expend local resources other than the low and moderate income housing set aside funds of a Redevelopment Agency to attain state and regional housing goals. 65583[c] sets out those requirements. D. The HCD may reduce the unit allocation up to 25% if a city includes in its housing element a program provided committed assistance (dedicated funds) to building or SEP-29-2002 21:2? Jan 8055412239 P.02/04 rehabilitating units for low and very low income housing with long term affordability covenants. 65583.1 E. There is an appeal process if we do not accept SLOCOG's determination. Within 90 days of SLOCOG's determination, a city may propose to revise the determination of its share of the regional housing need. SLOCOG has 60 days in which to respond if SLOCOG does not accept the proposed revision, then the city shall have the right to request a public hearing to review the determination within 30 days. If after that hearing SLOCOG determines that the revision is acceptable, the city may use that revision. If SLOCOG decides to stick with the original allocation, then the city may bring a writ of mandate action in Superior Court. 65584[c] F. There are procedures for transferring a percentage of the allocated share to another city or county. 65584.5 G. There is a procedure provided for a city to self-certify their Housing Element if it decides not to comply with the state housing quota. 655850 If the department finds that a draft element or draft amendment does not substantially comply with the requirements ofthis article,the legislative body shall take one of the following actions: (1) Change the draft element ro draft amendment to substantially comply with the requirements of this article. (2)Adopt the draft element or draft amendment without changes. The legislative body shall include in its resolution of adoption written findings which explain the reasons the legislative body believes that the draft element or draft amendment substantially complies with the requirements of this article despite the findings of the department, H. Even if the department has found that a city's element does NOT substantially comply with the requirements of the statute,there is M legal presumption that it is invalid. 65589.5 In any action filed on or after January 1, 1991,takers to challenge the validity of a housing element, there shall be a rebuttable presumption of the validity of the element or amendment if, pursuant to Section 65585, the department has found that the element or amendment substantially complies with the requirements of this article. Colantuono, Levin & Rozell, APC 555 West 5th Street,30th Floor Michael G. Colantuono Los Angeles, CA 90013 mcolantuono@clrlowfirm.com Main: (213) 533-4155 (213) 533-4146 FAX: (213) 533-4191 www.cldawfirm.com September 29, 2002 BY ELECTRONIC AND U.S.MAIL Vice Mayor Jan Howell Marx City of San Luis Obispo P.O. Box 1445 San Luis Obispo, CA 93406-1445 Re: Proposal to Provide Special Counsel Services to the City of San Luis Obispo Regarding the Regional Housing Needs Assessment and Housing Element Processes Dear Vice Mayor Marx: As you ask, I write to outline terms under which I can provide consulting legal services to the City of San Luis Obispo with respect to its compliance with the housing element statute. The Tasks: As we discussed, there are three major strategic decision-points for the City in the process by which a"fair share"housing goal is assigned to the City and a housing element is adopted. First, under Government Code Section 65584, the State Department of Housing and Community Development (HCD) assigns a housing goal to the region—in this case the San Luis Obispo Council of Governments(SLOCOG). SLOCOG has three choices with.respect to HCD's assignment: it can accept it, it can negotiate with HCD for a different allocation, or it can seek to challenge that allocation in court. This choice must be made by SLOCOG, but the City, of course,has a role in SLOCOG's decision. This process is somewhat technical and will tum on the quality of the data that can be mustered locally about existing housing resources,vacancy rates,job-creation, and other demographic statistics that drive housing demand. If a legal challenge is contemplated, the quality of the record prepared for suit and the data it contains will be crucial. The second decision-point is similar. Once the regional number is established, SLOCOG must then assign subregional numbers to each of the County and the 7 cities. Once SLOCOG assigns an initial allocation to the City of San Luis Obispo, the City will have the same three options outlined above: accept the number, seek to negotiate a different allocation, or file suit to challenge the subregional allocation. This process is, of course, as much about politics as it is about law and it may be possible to negotiate a resolution with the City's neighbors by which it receives a small total housing allocation in exchange for agreeing to provide a disproportionate Jan Howell Marx September 29, 2002 Page 2 share of affordable housing. Again, if litigation is a possibility, the quality of the record, and the technical data on which the decision turns,will be crucial. The last decision-making point is with respect to the drafting of the City's housing element itself, after the City's subregional "fair share"housing allocation is established. There are two ways to comply with the housing element statute. The first is to adopt an element which credibly predicts that the City can attain its "fair share" number over the life of the element. I call this the"attainment" approach. This is most common and most likely to lead to certification of the City's housing element by HCD. Certification provides a degree of legal protection and qualifies the City for certain housing funding programs,but is not legally required. The second approach is to adopt an element which identifies the constraints to housing development that the City cannot or should not change and that prevent it from attaining its "fair share"housing goals. Under this approach, the element must identify the maximum number of housing units that the City can construct, rehabilitate, and conserve and identify programs to attain those maximum goals. I call this a"constraints"element. I would be happy to provide such legal advice as your City Attorney and City Council find helpful in evaluating these choices,but I must emphasize the ultimate choices must be made by the Council itself, as they are almost uniquely questions which turn on law,policy, and regional politics in equal parts rather than on legal considerations alone. My Qualifications: I have specialized in local government law since 1989. 1 serve as City Attorney of Barstow and La Habra Heights and previously served as City Attorney of Monrovia and Cudahy. I have been elected by my peers to serve as an officer of the City Attorneys Department of the League of California Cities, and will be"promoted" from Second Vice-President to First Vice-President at the League's annual conference later this week. I have worked in the field of housing element law almost as long in public law generally,defending the City of Seal Beach in a successful challenge to its element in 1990, followed by the drafting of a new element which I successfully defended in court all the way to the denial of review by the state Supreme Court. I successfully defended the City of Malibu in a developer-funded challenge to its initial housing element, both in the trial court and on appeal; and have advised a number of other cities in the drafting process. In terms of the three decision-steps noted above, I was active in regional discussions in the region served by the Southern California Association of Governments (SCAG)which led to SCAG's as-yet-unsuccessful suit against HCD regarding the region's allocation, as well as in a suit by Moreno Valley and other Inland Empire jurisdictions against SCAG challenging the subregional allocation. (I shared information about those two - cases with you and your City Attorney last week.) I mediated the subregional allocation among the West Los Angeles jurisdictions of Beverly Hills, Culver City, Santa Monica, West Hollywood, and Los Angeles County; preventing an appeal that threatened the entire regional process. I have also advised a number of cities on appeals of subregional allocations. I am currently working with Alameda,which unsuccessfully appealed its subregional allocation and is working on a"constraints" element in the face of well-advised and tenacious opposition by affordable-housing advocates. Economic Terms: I would be pleased to represent the City at blended hourly rate of$215 for the work of all of our professionals. This is a discount from my full hourly rate of$300. If the City can work with me to define a specific scope of work with respect to these issues, I Jan Howell Marx September 29, 2002 Page 3 would be happy to provide an estimate of the hours that would be needed or to consider fixed- fee-per-task or not-to-exceed fee arrangements. Conclusion: You will find my resume and a profile of my firm at www.elriawfirm.com, my firm's website. If I can provide farther information to assist you and your colleagues in determining whether our advice would be of assistance, please let me know. Thank you for the opportunity to propose our services. Best wishes to you and the City as you confront these challenging issues. Very truly yours, Michael G. Colantuono MGC:mmi c: Jeff Jorgensen, City Attorney Diane Re Holds RED FILE 1 47 9e_1 f From: Heather Clark (Diane Reynolds) To: Hook,Jeff; RED FILE DISTROBLITION LIST WITH CANDIDATES Date: 10/1/02 12:10PM Subject: RED FILE 10-1-02 Please notethis red file was sent earlier with out its attachment. The original letter from Jan Marx is attached as well as the attachment of the document. Please replace this item with the previously sent one. uATE NG � � � AGENDAS 3 ITEM #___ Ala Q 21 Residents for Quality Neighborhoods P.O. Box 12604 •San Luis Obispo, CA 9rEY C7t, C C'�pP S C RE September 30, 2002 M U%fila RE: Meeting Date: October 1, 2002 Business Item #3 Recommendation to adopt a resolution accepting, with reservations noted, the Regional Housing Needs Allocation (RHNA) housing allocation number for the City of San Luis Obispo and recommend that SLOCOG approve the Draft Regional Housing Needs Plan. Honorable Mayor and City Council Members: RQN is supportive of the Council's efforts and desires to create new "affordable" housing within the City of San Luis Obispo. In doing so, however, it is our opinion that you must be mindful of, and address the following issues: 1. The affordable housing demand created by high numbers of college students associated with the lack of on-campus student housing; 2. The affordable housing demand created by the City's excessively high rate of "commercial" growth; 3. The preservation of the City's existing housing stock and most importantly, the preservation of our existing R-1 neighborhoods. Your decisions in regard to both Business Item #3 and #4 have the potential to profoundly affect the future daily lives of our residents by greatly impacting our schools; the traffic on our streets, the water supply available to us, our air quality, the taxes we pay, and has the potential to be "a major departure from citizen preference on community growth". RQN believes that a decision of this magnitude should only be reached after a fair and open;public discussion of all the issues, all the impacts and, all the possible mitigations. ,This has not happened. The draft resolution before you states, "Whereas, the City Council has held a public hearing ...", and yet, this meeting was advertised and will be heard as a business item. The public notice gave no description of the. number of housing units being proposed, or even that important action would be taken on these items. There has been no review by the.Planning.Commission. RECEIVED SEP 3 0 ?nn? SLO CITY CLERK r � September 30, 2002 Re: Business Item #3 (10-1-02) Page 2 There has been absolutely no discussion by staff relative to what the long term cost of accepting this state housing mandate would mean to the community in the way of level of service or quality of life impacts. Finally, accepting the high state housing quota now would mean the city is giving up its strongest position to appeal to SLOCOG and to explore other appeal options legally provided for. Therefore. we request that you: • Do not recommend adoption of the Draft Regional Housing Needs Plan (RHNP) assigning a regional need of 18,035 housing units. • Do not accept the Regional Housing Needs Allocation (RHNA) assigning 5,450 housing units to the City of San Luis Obispo. • Do not direct that this number (5,450) be included.in the updated Housing Element. Sincerely, Cyd ey Hol / Chairperson, RQN Attachment: A - RQN Question &Answer: "The State Housing Mandate" including Attachments 1- 6. Attachment "A" RQN THE STATE HOUSING MANDATE RQN supports the creation of new "affordable" housing A0.d preservation of the established R-1 neighborhoods in the City of San Luis Obispo. In that spirit we have preparedthe following answers to questions regarding the State Housing Mandate to assist our members and others in understanding this complicated issue. 1. What is the "state housing mandate"for the County of San Luis Obispo? The new countywide state housing mandate is 18,035 housing units. (Attachment 1). 2. Is this a fair and reasonable number compared to other coastal counties in Callfornla? No. For example Monterey County has roughly twice the population of San Luis Obispo County, but was assigned only half of the housing units mandated for San Luis Obispo County. SLOCOG appealed our County's arbitrary and unfair mandate to the State Housing and Community Development Department (HCD). HCD denied SLOCOG's objections. (Attachment.1). 3. What is the state housing mandate for the City of San Luis Obispo? Based on the County's arbitrarily high and unfair mandate, the City of San Luis Obispo has been assigned 5,450 housing units. This is the largest quota of any City in the County.. (Attachment 2). 4. How much larger is the housing mandate for City of San Luis Obispo than the other cities in the county? The City of San Luis Obispo's mandate of 5,450 housing units is uniquely large. It is about twice as large as Paso Robles' mandate and larger than the entire unincorporated county. It is more than three times larger than Arroyo Grande's and Atascadero's, and about 5 1/2 times larger than Grover Beach's. It is 7 times larger than Morro Bay's, and more than 8 times larger than Pismo Beach's mandate. S. What is the basis for assigning state housing mandates to cities within the county? The State Government Code §65584(a) defines this as follows: 'The distribution of regional housing needs shall, based upon available data, take into consideration market demand for housing employment opportunities the availability of suitable saes and public facilities commuting patterns type and tenure of housing need the loss of units contained in assied housing developments ... and the needs of farm workers. [Emphasis added]. SLOCOG incorporated.this, and, largely because of the City of San Luis Obispo's very high, past job (commercial) growth, it was assigned the highest state housing quota. (Attachment 2). Page Two 6. Did San Luis Obispo City Councils know that they were creating this high state housing mandate when they voted for large, new commercial growth? It should have been presented in their staff reports. 7. What do 5,450 more housing units meanto the City of San Luis Obispo? Using SLOCOG's figure of 2.5 persons per household it would mean a population increase of 13,625 people in 7 years. This represents a population increase of approximately 32%. 8. What would it cost if the City tried "to meetthis quota?" The City's last quota in the early 1990s was 5,128 housing units, roughly similar to the present quota of 5,450. The 8-4-92 .City Council. Staff Report evaluated the impacts of the resulting 789 housing units per year. It identified tremendously high impacts to our City's schools, traffic, air quality, sewer and water supply etc. (Attachment 3, pages 6-13 through 6-18). The Telegram Tribune also evaluated the costs of "meeting.the-last-quota.". The.costs would_be.similar this.time. (Attachment 4). 9. What else would "meetingthe quota"mean.to-the-City of San Luis Obispo? It would additionally create pressure to increase population densities in established R-1 neighborhoods..This is "more painful" in. the_ City. of San Luis Obispo because neighborhoods already have small lots and one of the very highest population densities of any City in the County. San Luis Obispo has about 4,500 people ,per square mile. At a recent meeting on this issue, sponsored by SLOCOG and The League of California.Cities, San Luis Obispo.City. Planner Mike..Draze identified all the R-1 neighborhoods on the City Zoning Map. "This is where the battleground will be," he said. 10. What did the previous City Council do? The previous San Luis Obispo City Planning. Commission and City Council voted against accepting the state housing quota. The attached Tribune article describes their vote. (Attachment 5). 11. Did the Tribune comment on the Council's vote against the state housing quota. Yes, the TelegramTribuneeditorial praised the council's action. (Attachment 6). 12. Zf the previous city council had voted to meet the state housing quota, would we have a lower_quota-now? No. It would.be.higher because the,population growth of the last period would.have been significantly higher: If we "meet the quota" this time, it will only make the next quota higher. i 1 Page Three 13. Will "meeting the state housing quota" result in more housing for low and very low income people.. as opposed to the more expensive housing that is being built now? No. The largest portion of the State housing quota willnot be for very low or low income residents, but for "above moderate income" residents. (Attachment 2, lower chart). 14. Is the California State Department of Housing and. Community Development subject to the California Environmental Quality Act (CEQA)? California Government Code §65584 states, "Determinations made by the department, a council of governments or a city or county pursuant to this section are exempt from the California Environmental Quality Act (CEQA), Division 13 (commencing with §21000) of the Public Resources Code". 15. Can the City "just put the housing goals in its plans"but not actually build the 5,450 housing units? (a) The city can't just "put the housinggoalsintheir plans"; it must also show in its Land Use Element exactly where this new development will occur. (b) This is historically what-has.degraded.cities like_.Fresno, San Jose, Los Angeles, etc. These cities did not build the excessive development themselves, they just �put the numbers in.their-plans" and real estatedevelopers.did the rest. In a 1993 letter HCD said, the City of San Luis Obispo is "not required to ensure that sufficient housing units.are-constructed. to accommodate. the_ projected..growth. They merely must adequately zone sufficient sites to ensure that the construction can take place, if there is private-or public sector demand". The lesson is, don't "put the high numbers in your plans" unless you are willing to have it built. 16. Can the City change. only its Housing.. Element.-to accommodate the State Housing Quota? No. Because the-elements within-a-general-plan must be internally consistent, the city will have to change the Land Use Element and all other elements of the General Plan to be consistent with the. housing. element. The. result will be that the state housing quotas from HCD will over ride our local control and years of public participation intheplanning-process. 17. if the state housing quota exceeds available local resources, can the City give "quantit<ed objectives"instead? Yes. Government Code §65583 allows for "quantified objectives" which "Need not be identical to the total housing needs". "The quantified objectives shall establish the maximum number of housingunits by income category that can be constructed, rehabilitated, co rehabilitated, and conserved over a five-year period". HOWEVER, that does not meanthatHCD will say, "OK, thanks-for explaining_ Now we will allow you to lower your state housing quota, to have fewer units built". If that had been the case, hundreds ofcitieswould have-done it.-HCD's response would more likely be, "Oh, you don't have enough water, road capacity, etc. Show us how you are going to-get the water, more road capacity, etc. to meet our state housing mandate." Page Four 18. Will HCD pay for all the water, traffic improvements, and other resources etc. that their State housing quota will require? No. 19. Although. the State Housing. Quota for the County of San Luis Obispo as a whole, and for the City of San Luis Obispo are arbitrarily and unfairly large, will the City get sued if it doesn't put the State Housing-Quota numbers in its plans? Maybe, but it will probably be sued if it does put the state housing quota numbers in its plans and then tries to stop developers from doing, "what's in its plans". 20. Is compliance with HCD's State Housing Quota the only legal option for a City? No. Government Code §65583 states: "If the department finds that the draft element or draft amendment does not substantially comply with the requirements of this article, the legislative body shall take one of the following actions; (1) Changethedraft_element or draft amendment tosubstantiallycomply withthe requirements of this article. (2) Adopt the draft element or draft amendment without changes. The legislative body shall include in its resolution of adoption written findings which explain the reasons the legislative- body believes that the draft element or draft amendment substantially complies with the requirements of this article despite the findings of the department." 21. Would San Luis Obispo. City be alone, if it..didn't, comply, with the State's Housing Quota? No. 40% of all citiesin. California are currently"not in compliance" with the State Housing Quota. Attachments: 1 - HCD Proposed/Approved.Housing Units by Selected Coastal.Counties. 2 - San Luis Obispo Regional Housing Unit Distribution 3 - Council Agenda Report- 8-4-92, Policy options re regionalhousing needs for SLO 4 - Telegram Tribune Article - "Meeting the quota" 5 - Telegram Tribune Article - "SLO says no to-growth" 6 -Telegram Tribune Editorial - 8-6-92 "State housing rule correctly rejected" Prepared by: Residents.for_Quality Neighborhoods September 30, 2002 "Attachment 1" a C Hilo ot CO lot -R S 2 CIL P11 W SII-S! lot -E CL T C4 M Cp N N CV 5 .2 en a Ci Cb M 06 MOMS It 0 0 N 4T N IT 1- (N ti -00- e M Co LO CO Co 0 It C� W CD ,N C4 CM N CY z Co C4 CNI LO z 'o aiili'I >0) LO illi N Ie CL 0 W "Attachment 2" Q �vc'4motti• d cc qr 00 Z N Co Ln 4. •o d d Z M II II II II II 11 II II II II II O r a E Cu �. M , p I � � z ,p N + mN � o � .L ppb (Q�j a7 L(7 �� j: nc�cv � O p O ^ l�r W �i7 LD CD �f'l N u1 V - - — C C'1 4 �h - N � O V) a) � {_Oj II II II It II II II II II II c Q Nin, j ""• r r r r r r r r y°� m ITl n n n m .� 1 i M 0 M Ln M Ln Ln In �. O IT7 O N�D O N o N " I� r. `I�nnn 1. A m mN u�' M ri .- Q O O SZ o spry Q' T = vl �f�I ODOi V.. X x. x x x x x x x NNN .- V Ory. .Q fC O Co mu MM Co O O Q) x x x x x x x x x x Q= Em 2 n M 07 Lfl N6 M "r O a� 0 = m 0 3 o _N O I O CO p � o °y 00 rl- .Q LL. d C 3 c p p + Moz 3: 018L co iD co cn cn m i.o co [� x x x x x x IN x - LC� .� � C a o to O CL O m o j m �0 0 = F- LL CD QQ � r� I ¢ CL CAI W-- / .`Attachment 3" � M ETuv- oaT n� glll�ll��ll cozy o� san tuts OBlspo COUNCIL AGENDA REPOR 6ER. D FROM: rnold Jonas, Community Development Director; By: Jeff Hoo sociate Plan er tt ' SUBJECT: Consideration of policy options regarding regional d' housing needs for San Luis Obispo. CAO RECOMMENDATION: Evaluate the regional housing need policy options and by motion, provide direction to staff regarding the preferred policy to incorporate into the City's draft housing element update. REPORT-IN-BRIEF The City is at a "crossroads" in the preparation of its draft housing element update. The Planning Commission has completed its review, and recommended changes to the element to reflect the 1 percent growth policy incorporated into both the current and draft update landuse elements. This recommendation conflicts with state requirements that the City meet "regional housing needs" in its housing element. Compliance with this requirement is necessary to assure state acceptance of the draft housing element as being in compliance with state law. The report concludes that the Commission ' s recommendation and the State ' s requirements cannot be reconciled, and that the City Council should provide direction as to the preferred growth strategy. This approach would then be included in the City Council hearing draft of the housing element. SITUATION At its May 13, 1992 meeting, the Planning Commission completed its review of the Draft Housing Element update and directed staff to revise the draft prior to City Council review. Most of the Commission 's comments were on the housing policy and program details and implementation_ The Commission ' s most significant revision dealt with the City' s response to "regional housing need" as deterained . by the San Leis Obispo area Coordinating Council i (COG) . Commissioners felt that COG ' s housing need allocation was I unrealistic, and that the updated housing element should reflect the City' s current growth management policy -- allowing a 1 percent increase (about 180 dwellings) in the housing stock per year. This policy direction is not consistent with State-approved regional housing needs, and. may conflict with state housing law. Before the Commission ' s changes are incorporated into a City Council hearing draft, and with- the Commission' s understanding and agreement, staff is asking the Council to provide policy direction on how to reconcile state regional housing need requirements with City growth policies. This report discusses the regional housing need issue and presents policy options for Council consideration. HCD staff will review the draft element for compliance with State law, and return its comments in 45 days. EENG OATSCity O� san Luis OBIspo NUMBER: m;um A COUNCIL AGENDA REP®RT Regional Housing Need Page 2 I once the Council identifies its policy preference, the City Council hearing draft housing element will be prepared and scheduled for Council hearings, and forwarded. to the California DepartmentHousing and community Development (HCD) for their mandatory review prior to Council action. Regional Housing Need d to Like many California communities, San Luis Obispo tatus quire rt on update its adopted Housing Element regularly rt of the updating i other Central Coast cities attached) • overnments to incorporate process , state law requires local governments ,regional housing I specific housing production targets need" into their housing elements. Regional councils of government are delegated the authority to destenne idelinesl housing needs for each city and county following needs plans to j HCD then reviews and approves the regional housing determine compliance with state housing coals . COG adopted a Regional Housing Plan calling On November o , 1.99_, L for the construction of 19 , 880 new housing units in San Luis Obispo County by July 1997 , a 22 percent increase in the number of existing units.. Based_. on the methodoloc7 I used San Lug s Obi s26 Cit is char ed with rovidin housiand over one ercent increase in the Cit ' s n stock . -- quarter of the County's total projected housing need. County After careful review, staff determined that the allocation for San Luis Obispo is based population ti nurgrowth. using ate tmethods about csimilar to economic trends and p p what staff feels are those used by COG and the. State, and using more appropriate growth trends, city staff estimat 700 hne the City of San Luis Obispo ' s would need approximately 3 , Units by July 1997 to meet both city and regional housing needs . The City' s Housing Element update includes new policies and programs to expand the City' s affordable housing supply. To put i the Area Coordinating Council ' s numbers in perspective, however, of about 1, 000 the City would need to allow the constructionructon meet he adopted dwelling units annually for the next five yof ved targeructionhe--notofwhenehousinge constructionthis has beenmost const of about 800 units active. we reached a peak during the mid-1980s .in one year. ' � city o� san Luis oBispo /// ,UW. ITEM NUMUR: dab COUNCIL AGENDA REPOR FRO2i: rnold Jonas, Community Development Director; By: Jeff Hoo sociate Plan er j / SUBJECT: Consideration of policy options regarding regional housing needs for San Luis Obispo. CAO RECOMMENDATION: Evaluate the regional housing need policy options and by motion, providedirection to staff regarding the preferred policy to incorporate into the City' s draft housing i element update. REPORT-IN-BRIEF i The City is at a "crossroads" in the preparation of its draft housing element update. The Planning Commission has completed its review, and recommended changes to the element to reflect the 1 I percent growth policy incorporated into both the current and draft i ! update land use elements. This recommendation conflicts with state ! requirements that the City meet "regional. housing needs" in its housing element. Compliance with this requirement is necessary to assure state acceptance of the draft housing element as being in compliance with state law. The report concludes that the Commission' s recommendation and the State' s requirements cannot be ! reconciled, and that the City Council should provide direction as to the preferred growth strategy. This approach would then be included in the City Council,, hearing draft of the housing element. SITUATION At its May 13 , 1992 meeting, the Planning Commission completed its review of the Draft Housing Element update and directed staff to revise the draft prior to City Council review. Most of the i Commission' s comments were on the housing policy and program ' details and implementation. The Commission's most significant revision dealt with the City' s response to "regional housing need" ! as determined - 5y the San Leis Obispo Area Coordinating Council (COG) . Commissioners felt that COG's housing need allocation was unrealistic, and that the updated .housing element should reflect j the City' s current growth management policy -- allowing a 1 percent increase (about 180 dwellings) in the housing stock per year. This policy direction is not consistent with State-approved regional housing needs, and may conflict with state housing law. Before the Commission' s changes are incorporated into a City Council hearing draft, and with- the Commission's understanding and agreement, staff is asking the Council to provide policy direction on how to reconcile state regional housing need .requirements with City growth policies. This report discusses the regional housing need issue and presents policy options for Council consideration. HCD staff will review the draft element for compliance with State law, and return its comments in 45 days. Attachment 111" �� MEETING DATE: ::r,�'r.� glll�l ►!I city of San Luis OBispo :TEM NUMBER COUNCIL® ADEN®A REPORT Regional Housing Need Page 2 I Once the Council identifies its policy preference, the City Council hearing draft housing element will be prepared and scheduled for Council hearings, and forwarded to the California Department of i Housing and Community Development (HCD) for their mandatory review prior to Council action. Regional Housing Need I Like many California communities, San Luis Obispo is required to update its adopted Housing Element regularly (status report on j other Central Coast cities attached) . As part of the updating I process, state law requires local governments to incorporate. specific housing production targets called "regional housing need" -- into their housing elements. Regional councils of i government are delegated the authority to determine regional housing needs for each city and county following state guidelines. I j HCD then reviews and approves the regional housing needs plans to determine compliance with state housing goals . I on November 61 1991,. COG adopted a Regional Housing Plan calling for the construction of 19 , 880 new housing units in San Luis Obispo 1 County by July 1997 , a 22 percent increase in the number of existing units.. Based. on the methodoloay used San Luis Obispo City is charged with providing 5 128 new units by J_11y 1997 , a 26 _. percent increase 1n the City's housing stock and over one quarter of the County's total projected housing need. After careful review, staff determined that the allocation for San Luis Obispo is based on inaccurate assumptions about city/County i economic trends and population growth. using methods similar to those used by COG and the State, and using what staff feels are more appropriate growth trends, city staff estimated that the City 04. San Luis Obispo' s would need approximately 3 , 700 new housing wits by July 1997 to meet both city and regional housing needs. I The City' s Housing Element update includes new policies and programs to expand the City' s affordable housing supply. To put the Area Coordinating Council 's numbers in perspective, however, the City would need to allow the construction of about 1, 000 dwelling units annually for the next five years to meet the adopted i target. The City has never achieved this rate of housing construction --not even when housing construction has been most active. We reached a peak during the mid-1980s of about 800 units .in one year. � MEETING DOTE: 111 i1111�11t1V1i 11 .C�ty o� son lues oB�spo ITEM NUMBER: COUNCIL AGENOA REPORT Regional Housing Need Page 3 I Previous "Fair Share" Requirement This isn't the first time San Luis Obispo has addressed state- mandated housing targets. In 1984, HCD prepared a "housing needs plan" for San Luis Obispo County and all the cities within the County. During the 1987 housing element update, HCD required San Luis Obispo to include a regional housing need allocation of 1, 630 new dwellings between 1984 and 1990. During this period, the City gained new 2, 690 dwellings -- substantially more than the HCD' s regional housing need figure. The element' s target numbers for new dwellings for low and very low income households, however, were not achieved. State Housing Law Changes In 1990, then Governor Deukmejian signed into law SB 2274 (Bergeson) . In effect, this law put "teeth" into the. State's regional housing need requirement by revising the process of allocating local shares of regional housing need, and by requiring i that HCD review housing elements to assure compliance with state- i mandated housing needs prior to adoption (State Housing Law i attached) . Now under state law, local governments no longer had the right to adopt a "local revision" to its regional need allocation. Instead, cities and counties could nromose revisions to COG. The "catch": if COG accepts the revision, it must ensure that the total regional housing need is remains the same. Locally, that would mean that the portion of regional housing needs assigned to but not accepted by San Luis Obispo City must then be allocated to some other jurisdiction in the County. According to planning directors 'of the various cities in the County, these cities may be unable to meet their regional need allocation, and they are not willing to accept a portion of the City's allocated need. _ The County is in a similar position. I COG' s Action . State law requires HCD to determine the regional housing needs for each COG jurisdiction, in this case, the County of San Luis Obispo. Using population growth estimates prepared by the California Department of Finance, HCD determined San Luis Obispo County' s regional housing need and notified the County in June 1990 . COG staff attempted to lower the State's growth estimates, citing resource constraints to growth due to sewer and water. In March 1991, HCD agreed to lower its population growth estimates -- mainly in response to newly released 1990 Census data. �_V MEETING DATE. ' crty of sAn Luis OBISPO ITEM NUMBER: COUNCIL AGENDA. REPORT Regional Housing Need Page 4 Originally, HCD estimated that the County's total population would increase from 221, 703 to 281, 100 persons between January 1, .1990 and July 1, 1997 -- an average annual increase of 3 . 6 percent. The revised, final estimate is for the County's population to grow from 221,703 to 267, 600 persons between April 1, 1990 and July 1; 1997 - an average annual increase of. 3 .2 percent. I City Appeal of Regional Housing Needs I i In August 1991, City staff. reviewed COG' s - determination and I concluded that it did not accurately reflect the City' s housing need or capability to support additional growth. In September 1991, the Planning Commission discussed the regional housing need issue, and supported staff' s contention that COG' s numbers were not j I achievable. Commissioners directed staff to prepare an appeal of COG' s determination as part of the housing element update work. In January 1992, the Commission reviewed staff ' s proposed revision to COG's determination, and concurred with the approach.. The appeal was submitted to COG staff in January, including an analysis of COG's numbers and methods on which the needs assessment is based. COG' s regional housing need determination was based primarily on employment growth projections and availability of water resources.. on April 8 , 1992 COG denied the City's appeal, finding that the City' s proposed revision was not justified i because: 1) the regional housing needs were developed following state law and accepted planning methods; 2) if - employment projections on which the regional needs are based were not achieved, the City still has unmet need for housing for existing local employees; and. 3) the City' s revision would require reallocating the difference in housing need to other jurisdictions in the County, and evidence indicates that these jurisdictions are not able to accommodate the additional housing. The main factors that COG used to determine the City' s regional housing need are summarized below. Employment Growth The 1980s were years of rapid growth for much of San Luis Obispo County. According to COG figures, San Luis Obispo and surrounding areas showed a 28 percent increase in the number of jobs between 1980 and 1987 . As noted in COG's study, one-half of the County ' s jobs were in San Luis Obispo City. To arrive at housing need figures, COG's plan assumes that a robust 18 percent rate of job growth will prevail through the planning period. 0 °!'hII ���I�iIIV�I I`I�II� Gly o� san LUIS O$IspO . MEETING DATE: n!a iu! ITEM NUMBER: COU AGENDA REPORT Regional Housing Need Page 5 The rate of job growth in the "central county" area during the 1990s is likely to be much less than the 28 percent experienced during the economic boom days of the 1980s. These job growth figures included large employment generators which are not likely to continue, at least in the foreseeable future, such as construction of P.G. & E. 's Diablo Canyon nuclear power. plant, major enrollment and facility expansions at Cal Poly and Cuesta ! College, and growth in State and County employment. The Diablo ' Canyon facility is built out, and enrollment at Cal Poly and Cuesta College have stabilized, and will probably decline due to budget constraints. A lack of water, coupled with recessionary economic factors state wide are likely to dampen public and private sector employment growth for the period covered by this plana I The plan notes that "San Luis Obispo 's role as a regional employment center is expected to continue, although employment j growth is expected to be deflected to other communities due to water and sewage disposal service limitations in San Luis Obispo. " i Between January 1989 and January 1990, job growth in SLO County dropped to about 1 percent. ?according to State Employment Development Department (EDD) staff, that employment growth rate is expected to last at least through 1992. Yet COG's plan assumes an overall job growth rate of 18 percent between January .1991 and July 1997, (based on a 1990 estimate of 37, 317 jobs in the "central county" area) , despite reduced economic expectations for the early 1990s. Based on EDD data and economic trends, a more realistic estimate of 10 percent overall job growth should be used for the planning period. Revised calculations for additional housing need based on employment trends are: 10% job growth from 1/1/91 through 7/1/97 equals 0 . 10 (371371) 3 , 332 new jobs; substituting, 3 , 332 new jobs/ (1. 2 employed person per household x 0.95 occupancy rate) = 2 , 923 new dwellings. I The city's average number of employed persons per household is 1.2, not 1. 1 as used in COG's analysis. Hence, the base housing need for the City of San Luis Obispo (January 1991 .through July 1997) should equal about 2,923 housing units. To allow for housing demolitions and conversions and a 5 percent vacancy rate, this figure is increased by 8 percent to an adjusted need of 3,282 new housing units by July 1997. MEETING DATE: City O� San LUIS OBISPO .TEM -NUMBER:AGENDA REPORT Regional Housing Need , Page 6 Water Resources Since COG prepared its housing need estimates, the time frame for development of new City water sources has changed. COG assumed that the Salinas Reservoir expansion would provide 1, 350 acre feet in January 1994 , Nacimiento Reservoir water in 1995, and. State Water Project coastal branch water would be available in 1996 . Due to the actual time needed for engineering and environmental studies, design and construction, the earliest any of these new sources will be available, optimistically, is July 1995 (Salinas Reservoir) , at least 1 1/2 years later than anticipated. i COG assumes 41400 new units could be served with water during the planning period; however using the most accurate estimates available, the most dwelling units which could be served based on. anticipated water supplies between 1992 and July 1997 is 2, 900 units. According to state law, availability of public services like water, sewers, police and fire services limits growth only in terms of timing. Thus, the regional housing allocation plan can consider the time needed to provide the necessary services to support growth in setting housing allocations. The law does not allow cities and counties to set permanent growth limits based on limited water or sewer facilities. Summary Using COG' s methods and substituting more realistic assumptions about demand, job growth, available land, and public services, the City' s base share of regional housing. need is 1, 170 to 2 , 923 new housing units between January 1991 and July 1997 . To allow for a 5 percent vacancy factor and demolitions, an additional 234 dwelling units is added to the base housing need, for a total need of 3 , 282 new housing units. For reasons cited above, COG' s total projected housing need for SLO County is lower than that projected by the State Department of Housing and Community Development. So a portion of the difference between COG' s projected regional need and the State' s projected need was allocated to each city and to the unincorporated area based on the amount of growth forecast for each.. So to be consistent with COG' s method, the City's regional need allocation was adjusted accordingly: 3,282 units (projected City need) + 451 units (HCD added need) revised regional housing need of 3, 733 dwelling units. MEETING DATE: IlliiH���n i�r>lii� city o� san Luis OBIspO 0` ITEM NUMBER: l0�7 d& C®I.JNCIL. AGENDA REPORT Regional Housing Need Page 7 To produce enough housing to meet this revised need. the Citv would neea ro accommonate 575 nPw mwo.iiinas uer year between January 1'. 1991 and July 1, 1997 . Even if the city aid tailor iEs poiicies and programs to allow this rate of housing production, it still might not be achieved. It could be achieved only if: Z City water supply improvements proceed as planned, and necessary public services (water, sewers, roads, schools) are available to meet the needs of current residents plus those i of new residents; I N the City receives development applications proposing at least this number of new housing units; I E City policies are amended to allow growth to exceed the 1 ! percent level identified in the General Plan and proposed Land Use Element update; and j m the City annexes land within its urban reserve to allow room to accommodate this level of residential growth. Consequences- of Not Meeting Regional Housing Needs State law requires the City to include policies and programs in its' Housing Element .which would allow the City to achieve its regional housing need, but it does not hold the City responsible for ! actually producing this housing. . If the City makes a "good faith" effort to allow this much housing and provide the necessary policies, programs, properly zoned land, and resources but the housing is not built, it would be deemed to be in compliance with state housing law, according to HCD officials. For example, if the City is not able to secure additional water during the. planning period from 1992 to 1997, HCD would recognize that situation as a i legitimate reason for not achieving COG's regional housing need. There is, however, a likelihood that 'the state will try to "carry forward" the unmet housing need into the .City' s future housing programs. If the. City does not reflect COG' s regional housing need numbers in the pending Housing and Land Use Element updates, it is likely that HCD will find the City's Housing Element to be not in compliance with state housing law (Article 1.0. 6. , ch. 65580 et.seq. , Calif. Govt.. Code) , according to Gary Collord, State Department of Housing and community Development (June 10, 1992) . This action has at least two possible ramifications: 1) As a result of developer or citizen legal action, the adequacy, MEETING DATE: ti II 'awe n�%Atll�l city of san Luis osrspo ITEM NUM.F3ER: COUNCIL AGENDA REPORT Am Ii Regional Housing Need Page 8 of the City's General Plan could be challenged. Courts have restricted cities' ability to issue construction permits where it's been determined that their general plans were invalid. i 2) The City's eligibility to compete for and receive housing grants through HCD would be reduced. This should not, however, affect the City's eligibility to receive federal housing block grants for which the City is now entitled due to its recent classification as an "urbanized area. " I POLICY ALTERNATIVES The City of San Luis Obispo does not actually construct dwellings. However, through its provision of services, zoning regulations and growth management programs, it influences housing production. By establishing housing goals, the City is stating that it will enable housing construction to occur at established rates. j i Staff has identified three policy alternatives for dealing with the conflict between city policy and. state-mandated housing needs. Only alternative 2 would meet the State's requirements. I. COG' s Allocation: Set housing production goals consistent with the City's regional housing need as determined by COG and approved by the State. 2 . Moderate Growth: Set housing production goals which are lower i than COG' s regional housing need, and linked to the availability of public services and moderate economic growth expectations. 3 . Continued 10 Growth Limit: Set housing element `goals and policies based on the General Plan' s 1 percent. I Table 1 on the following page' compares the housing rates and construction levels associated with the three policy options described above. POLICY OPTION 1: COG' s .Allocation Description: The City would incorporate into its housing element the housing goals prepared by the San Luis Obispo Council of Governments and approved by HCD. The City would enable the construction of an average of 789 dwellings per year between _ January 1991 and July 1997 : i - I � - 13 I� yOBISMEETING DATE:. Vi COUNCIL CIlav Of San Luis po ITEM NUMBER: II`uV COUNCIL AGENDA REPORT Regional Housing Need Page 9 1. Consistency with the General Plan This policy option conflicts with the current and proposed Land -Use 1 Elements because it would allow annual average growth rates 'to t reach 4 .3 percent, while the General Plan limits the annual growth rate to 1t or less. The 1 percent growth rate is not linked to any specific resource or service limitation, but' reflects previous Council judgements about a sustainable growth rate which allows the ! � orderly provision of facilities and services for new development, and the assimilation of new residents and physical changes into the 1 community. In teras of the Citv's ultimate size, however, this approach is consistent with the draft land use element. This document anticipates the addition of about 5, 100 new units .between 1992 and 2017 . In effect, by meeting COG' s regional housing need, the City would reach its ultimate size as much as 20 years sooner If than anticipated. j fTable 1 I Alternative Policies for Meeting Regional Housing Needs (Units Produced, January 1991 - July 1997) Policy options Total. Units Units/Year COG Allocation 51128 789 Moderate Growth (1) 31733 575 I I ( General Plan (2) 11290 184 (1% Annual Rate) Production History 2 , 809 468 i ( (1984 1990) I � Notes: (1) This policy option was incorporated into the draftI ( Housing Element considered by the Planning Commission i May, 1992. t (2.) The Planning Commission has recommended that the Cite target its housing goals to be consistent with the Lan Use Element of the _General Plan (it annual growth rate) . I. MEETING DATE: ll 110`111t1 city of san Luis oBispo COUNCIL AGE�IOA REPORT ITEM NUMBER: Regional Housing Need Page 10 2 . Resource/service availability and environmental impact ! The proposed regional housing need for the City of 5, 128 new ,I dwellings between January 1991 and July 1997 is not achievable because adequate water and sewer resources are not available during the planning period to support this rate of growth, and because the increased population in so short a time span would result in i significant, unmitigatable impacts to traffic, air quality, police and fire services, and schools. The City's draft Land Use Element indicates that 5, 100 new dwellings will be added gradually at about 200 units per year between 1992 and 2017 , accommodating a total ! City population of about 55, 000 persons. Air Quality The levels for ozone and particulate matter in this area currently ? exceed acceptable standards, and emissions of these pollutants must )I be reduced by 5% per year until State standards are achieved. , , / Adding 5,128 dwellings will significantly increase traffic levels iand mobile emissions, and delay if not preclude the City's II attainment of- State air quality standards and compliance with the 1988 Clean Air Act. Traffic he draft Circulation Element proposes various programs and traffic ! improvements during the next 30 years and assumes that in-city i traffic volumes will increase at an average rate of slightly over 1 percent per year. If the City population grows faster than 1 percent per year, planned traffic improvements may not be adequate to maintain safe, efficient traffic flow during peak hours. To meat the regional housing need, the City would produce new housing at an average rate of about six percent per year between July 1992 and July 1997 . olice and Fire services As the City' s population grows, the need for police and fire i services grows at a disproportionately faster rate. Police staffing in San Luis Obispo is already below the state average, as measured by the number of sworn officers to resident population. Currently, the City' s ratio of sworn officers to population is 1. 33 per 1, 000 resident population, below the state average of 1. 8 per 11000. The increased need for staff, equipment, and facilities will be met partially through development impact fees and 1 environmental impact mitigation fees imposed at the time of future development. Added costs for these services will, in part, be paid -1 MEETING DATE: "'u"h�►�!������"�i���l`I Cit/ o� Say�' ` LUIS OB'Spo ITEM NUMBER: COUNCIL AGENDA REPORT Regional 'Housing Need Page it by city residents through increased fees or taxes. �)1 Sewer (, Sewer treatment plant upgrades now underway will expand the City's sewer treatment capacity to about 5.4 million gallons per day (average dry weather flow) , or five percent. This will accommodate ! a population increase of 4, 300 persons through the year 2000 (Wastewater Treatment Plant Final EIR, March 1990) . The plant will be operational by Fall 1992 , and is planned to accommodate an increase of up to 3 , 000 persons, or about 1250 new dwellings by 1997 . I / i water \ Engineering and environmental studies are underway to secure additional water supplies. At the earliest, additional water supplies are not expected to be available to support new i development until 1995 with the enlargement of the Salinas I Reservoir. This project is expected to add about 1, 600 acre feet or residential use. At a use rate of 0. 43 acre foot per dwelling per year, this could support development of 3 , 700 new dwellings. i Between July 1992 and January 1995, housing growth would be limited by lack of water to the rate .of development which could be accommodated by retrofitting, or probably somewhat less than 1 percent per year (180 to 200 dwellings per year, compounded) . If i the City were successful in securing all of the additional water sources under consideration, it could make available up to 5,970 acre feet of water to meet the needs of new residents -- enough for about 13 , 000 new dwellings. Timing is the main water constraint in achieving the COG ' s numbers. Beginning in January 1995, housing production could increase; i however, to meet the City' s regional housing need of 5, 100 dwellings by July 1997 , 4, 443 dwellings would have to be built in two and one.:-half years -= a rate of almost 1500 units per year or 148 dwellings per month.. The City has never achieved this rate of growth, nor is it likely that this rate could be achieved even if the environmental impacts could be mitigated, and the resources and policies were in place to allow such growth. Schools San Luis Coastal Unified School District' s current enrollment is 7, 800 (includes eight schools outside SLO City) . According to District studies, new residential development generates 0.65 MEETING DATE:' flggl�_11�Ill city o f san 1, S 0 B I spo '��•i0ii�i; •�`� ����II 1 p� p � � -�� ITEM NUMBER; a COUNCIL AGENDA REPORT Regional Housing Need Page 12 i schoolchild per dwelling. COG' s regional housing need translates into about 3 , 300 added students in five years -- an increase of �( about 600 students per year and an increase of over 40 percent in local school enrollment (50 percent or more in SLO City) . In recent years, the District has grown at about 80 students per year. Due to budget constraints and current overcrowding at the elementary school level, 51100 new dwellings would have serious adverse consequences for school staffing, facilities, and programs in the City alone, not counting additional problems due to enrollment growth in areas outside the City also served by the District. I 3. Availability of Land. Resources The City currently has enough land within its boundaries to allow construction of about 1700 additional dwellings (includes added I_ development potential from mixed use sites, redevelopment and intensification) . When expansion areas listed in the draft land use element are included, an additional 3 , 245 dwellings could be accommodated, for a total added residential capacity of 4 , 950 dwellings -- less than COG's need figure of 5, 128 dwellings. To increase residential capacity, the City would need to consider additional residential annexations, probably near the City 's western and southern edges. 4. Impact on Community Expectations This growth increase would represent a major departure from citizen preferences on community growth, as expressed in the Land Use Element opinion survey and recent advisory elections. Although it I is unlikely that this number of new units would actually be built, the policy change itself would probably not be consistent with the majority of citizens ' views as to San Luis Obispo 's planned growth 1 character. _ S. Economic Impact City costs to provide additional services should be partially offset through permit and user fees, added local sales tax. revenues, and other revenues. Generally, housing (unlike retail commercial uses, for example) tens to cost localgovernments more o provide services than it generates in taxes and fees. Hence, this rate of residential growth is likely to have an adverse fiscal impact on—the City. The iR—creased rate of housing cons ruction could be expected to hold city housing costs down and increase vacancy rates, thus assisting low and moderate-income homebuyers ' who wish to live in San Luis Obispo. ...•q.+• �nnR�pm��, -- - - -. MEETING DATE: city o� san Luis oBispo COUNCIL AGENDA REPORT' ITEM NUMBER: � Regional Housing Need Page 13 ; 6. Potential For Litigation This approach would allow the City to meet state housing laws, and reduce the risk of litigation over the validity of the City ' s general plan due to lack of HCD acceptance of the Housing Element. , There may be some risk, however, of developers using litigation to (L = force a Cly o allow residential develoament to achieve this_ number of new units even if water were not available to e=e the ( C new residents. POLICY OPTION 2 : Moderate Growth I This approach would set a growth rate intermediate between. COG' S � numbers and the City's current and planned 1 percent growth limit during the 1990s. It would set the City' s regional housing need at 3 ,733 dwellings, and would allow an average annual growth rate of up to 570 units per year, or 3 .2 percent. By comparison, the City's annual average housing production during the period from 1984 to 1990 was about 470 units per year, or between 2 . 5 and 3 percent. This is the approach which the current draft housing element incorporates. 1. Consistency With the General Plan This option would conflict with the current and proposed Land Use Elements because it would allow annual "average growth rates slightly exceeding 3 percent, while the General Plan limits the annual growth rate to 1 percent or less. At this rate, it is estimated that the City would achieve buildout about ten years sooner than anticipated. 2. Resource/service availability and environmental impact I The revised regional housing need of 3 , 733 new dwellings between January 1991 and July 1997 is achievable if the planned water and sewer facilities are completed and available during the planning period. For example, Utilities Department staff anticipate that the Salinas Reservoir Expansion would be completed by the end of 1995. Once completed, the modified reservoir would allow storage to supply an additional 1, 600 acre. feet for new housing. This would be enough to accommodate about 3 , 700 new dwellings. However since the additional water supplies will not be available until the end of 1995 at the earliest, it is not likely that even the revised housing need could be achieved by July 1997. Environmental impacts of this option would be similar to, but less severe than those listed for Option 1. Since the impacts of growth are spread over a longer time period than in Option 1, their short-term effects are MEETING DATE: ° niiillulII�III city o� san lues oBispo COUNCIL AGENDA REPORT ITEM NUMBER: Regional Housing Need Page 14 more easily mitigated and absorbed by the community. 3 . Impact on Community Expectations Like Option 1, this represents a departure from city policies and citizen preferences on community growth. Although it is unlikely that even this revised number of new units would actually be built, and the growth rate would be less "dramatic" than with Option 1, the policy change itself would probably not be consistent with the majority of citizens ' views as to San Luis Obispo ' s planned growth character. Those wishing to buy housing in San Luis Obispo would find a wider range of housing types and prices available under this approach than would otherwise be likely if the City maintained its one percent growth rate. 4. Potential For Litigation j According to MCD officials, this approach would not meet state housing law, even though the City might be "procedurally in compliance" by following all other state requirements for housing elements. In short-.' t must ' lude the COG numbers, or the housing element will not be-accepted by MCD '1rr-d mpllance" w s a e housing law. What oes e�r?--�g * az-�ording-to s own staff, i doesn't mean slot. San Luis Obispo's current housing element has been certified to be in compliance; however of the 509 California cities and counties required to have housing elements, only 107 localities had adopted housing elements which ACD found to be in substantial compliance with housing element law. ities and counties who do not comply with state housing law are at somewhat of a disadvantage when vying for highly competitive state housing grants. Otherwise, there are currently no penalties or'. enforcement tools available to the state to force cities and i counties to comply with housing law. There have been only a few instances of California cities being sued by third parties (ie. developers) for not having a certified housing element, and according to State 'officials, in those instances the cities prevailed. P LICY 'OPTION 3 • General Plan (1 percent growth limit) Under this option, the City would accommodate construction of up to about 180 dwellings per year. This is the City's current policy and it would continue under policies now contained in the draft land use element. This is the Planning Commission's recommended option. The City has already planned to accommodate this rate of growth through its General Plan, so resources and urban services -lq MEETING DATE: city o� san tins a3ispo ITEM NUMBER: COUNCIL AGENDA REPORT Regional Housing Need Page 15 are not expected to prevent the City from achieving this rate of housing production. Environmental impacts are being addressed as part of the current land use element update; however staff does not anticipate significant, unmitigatable adverse impacts resulting from this growth rate. By holding to the one percent growth rate, the City's ability to promote a range of housing types and prices is limited more than under Options 1 and 2 . I Staff's Recommended Policy Approach Staff supports the Planning Commission's recommendation to maintain the 1 percent growth rate; however staff supports additional provisions to exempt affordable housing (which meets city affordability standards) from the 1 percent limit. This would allow additional flexibility to meet a demonstrated need for affordable housing in . San Luis Obispo, while holding the community's overall growth rate to levels anticipated by the General Plan. The draft Housing Element would need to address the details of how this exception to growth limits would be implemented. C. ALTERNATIVES In addition to the three policy alternatives above, the City Council could: 1. Further revise the regional housing need figure downward to reflect changing employment projections in the San Luis Obispo area. This would probably result in an annual average growth rate of between 1 and 2. 5 percent. Although this approach still wouldn't meet state law, it would allow the production of more housing than would otherwise be possible., and come closer to meeting regional housing needs. 2. Consider revising growth management and T'and use- policies to exempt below-market priced housing from any growth management regulations. RECOMMEMATION Evaluate the regional housing need policy options and by motion, provide direction to staff regarding the preferred policy to address regional housing need, and direct staff to incorporate this policy approach into the draft housing element. Attachments: = �0 "Attachment 4" The Telegram Tribune Meefin (y the Quota 10. Building 1,485 new homes for the next 3112 years. 9. Exceeding the previous record for homes built in a year by 665. 8. Building 23 times more homes than were built last year(64). 7. A 29 percent increase in population. 6. A 40 percent increase in school enrollment. 5. A 26 percent increase in the city's current housing stock. 4. The$13 million expansion of the waste water treatment plant would be instantly obsolete; it can only accommodate about 1,250 new homes. 3. Building a desalting plant—probably at a cost of well over$20 million The only additional water supply the city can count on by 1997 is the Salinas Dam expansion,which can at most support another 3,700 homes. 2. Annexing.the Margarita,Dalidio,Irish.Hills,Orcutt,.Broad Street,.Edna-Islay West and Stoneridge expansion areas—and then coming up with annexations to build another 2,000 homes: And the NO thing meeting the state's housing quotas would mean to the city, according to a wildly understated staff report: 1. "A major departure from citizen preferences on community growth." -Ken McCall (1 ) "Attachment 5" SLO no togrowth 0 City Ignores state ung that if the cigr gives in on.the housing plan its hands are tted qn order to allow more land-use decision& / "And if you can't cont roi.your laud. f/ use," home building, stays rar. Kurt Kupper, a member of the with 1 percent rate cityrs recently fornied Envlmamentar Quality Task Force, said a 5 percent;. By,David Eddy growth rate would put such stress ori Telegram-Taube the environment that the task boree's, job would be impossible. SAN LUIS OBISPO — A City "You might as well just let us go Council majority agreed Tuesday to frankly,"ho-said. thumb its collective nose at the state The council's stance has cost non and continue with the city's slow- profit groups such as the Women's; growth policy. Shelter and Peoples'Self-Help Hous-; The council conceptually adopted a mg hundredsof thousands of dollars; housing plan that does not subscribe in grants: The state has declined to; to state,orders to provide enough land approve those grants until the city' designated for the construction. of adopts a housing plan the state can'. 5,128 dwellings. live with. The state Department of Housing Bill Thoma, representing the and Community Development bas Chamber of Commerce, said it's not long beep after the dry to allow more worth it to lose those grants because houses. The state has determined of some conceptual houses that won't that the city should allow the con- actually be built struction to meet its share of regional "Please consider the'effects on the, housing needs. community and the programs we will be losing out on,"he said. But in the housing plan's five-year The Women's 5heiter, t alone time frame, that would allow fora growth rate of about S pergeat. well would have been for $400,000, but above the ciry's established i percent Mayor Peg PWard said it wasn't annual growth rate: The 5 percent worth the price the city would have tai U=has been shown to be well above Pay- the actual regional needs, with the "The cost of.getting that $400,006 ,f actual number at about 2 percent would be tens of millions of dollars;' The vote on the plan was 3-2, with she said. councilmmembers Dave Romero and She added that ;the'city has been Penny opposed successful in getting grants from the Romero said there's no chance the federal government, and should be city would approach a 5 percent able to do so in the future. growth rate in the near future,as the In a change to the plan,the council city isn't now nearing h percent agreed that a long-held goal of Councilman Bili Roalman count- providing housing in the downtown ered tjrat the council shouldn't ap- should be made mandatory,and t4at Prove a possible growth rate that it new multi-story buildings in tete doesn't philosophically endorse. downtown will be required to provide "1'm not willing to give a wink to the some housing. state ... because economic times The vote on that passed by the change,"he said. same 3-2 margin, with Rappa and Councilman Allen Settle agreed, Romero dissenting. "Attachment 6" A-10 Th=day,Aug M 6,1992 Opinion . Editorial State housing rule correctly .rejected Sometimes you have to stand your ground when Big Brother starts breathiag down your neck: That's exacta+what the San Luis Obispo City Council did ' Tuesday night when it voted to ignore a state edict that the city must add nearly.1,000 new homes to its residential capacity every year through Juin'1887. Here is state government on the brink of a financial meltdown,here is Sat►Luis Obispo with a terribly sluggish real estate market and here is a whole,nation in a serious . economic decline and we are being told that this city must build hundreds of new homes a year. Where to put the new houses,where to get the water and who will buy them?`What's your problem,"the state Department of Housing and Community Development is effectively telling us. By law,the state plays an important role in keeping cities and counties in line with state government policies.We agree, communities cannot be allowed to operate as mavericks.They need to be controlled But sometimes the requirements are so unrealistic,so out of synch with the times,so illogical and so liable to destroy a community's character that they must be changed. No doubt,state housing personnel are trying to figure out how they can bear down on the city and make it follow the policies that they have tried to impose. But 1,000 new houses ayear? Can't be done.Won't be done.And shouldn't have to be done. One way or the other,the--state should change the rules. The City Council was ri t o e oneym refusing to com i with a our uratic order that m es no a Ul-0o EVE e proper course in stickin with' i oeice�— gro`�'m� e e, en't o 4 new owes a year. v Richard Schmidt _ It 544-4247 M09130/2 01'1:58AM DIM SING AGENDA tL;K RICHARD SCHMIDT —9j-- ITEM # , 112 Broad Street, San Luis Obispo, CA 93405 (805) 544-4247 e-mail: rxhmidt@calpoly.edu September 30, 2002 Re: State Housing Mandate — Oct. 1 Council Agenda VIA FAX Dear City Council Members: I urge the Council to uphold the city's General Plan and to reject those portions of the Department of Housing and Community Development mandate which conflict with the General Plan. Since 1977, the General Plan -- in response to a repeatedly-expressed broadly-based citizen consensus -- has incorporated: 1. An urban reserve line representing the city's ultimate physical spread; 2. A build-out population representing the city's ultimate population; and 3. A 1% annual cap as an appropriate pace for incremental population expansion. The HCD mandate would destroy all three of these consensus-driven features of our General Plan, all of which lie at the heart of our city's vision for its future. If you appease the HCD, be forewarned:Their demands will become ever more extreme as each successive iteration of their "allocations" adds on a percentage in response to past appeasements. The outcome will be a city we do not want to create -- a sprawling mass that is undifferentiable from LA. Be advised, also, that HCD knows well its demands are nonsensical. During a previous round of demands from HCD, I met with a high HCD official and attempted rational discussion, which he cut short with the retort: "HCD is not reality-based." Finally, it is time the city stopped cringing at HCD's recurring unreasonable and irrational demands, and took the offensive. I call upon you, the Council collectively and individually, to take the lead in organizing opposition among other cities to have HCD's dictatorial powers taken away. Their single-purpose planning agenda is bad public planning. A coalition of cities and citizens can get this bad legislation undone, just as a coalition of builders got it enacted in the first place. In unity of opposition there is strength. In appeasement lies a dismal future. The choice is yours. Please act on it. ❑ CDD DIR CAO Sincerely, IEl FIN DIR rtYACAO ❑ FIRE CHIEF CVATTORNEY ❑ PW DIR RECEIVED Richard Schmidt O CLERK/CRIG ❑ POLICE CHF E�NgEADS ❑ AEC DIR 2fn:� C AE DIR t �� 3 U LuuL r `a '" SLO CITY CLERK "E nNG AGENDA UATE ITEM #� c o u n a l m E m o Ra n a u m September 25, 2002 TO: Council Members FROM: Ken Hampian, CAO #, SUBJECT: Recently Signed Housing Legislation Mayor Settle asked that staff provide the Council with added information concerning housing- related bills recently signed by the Governor. With the help of the City Attorney, the information is attached. �reCIL E CDD DIR M FIN DIR �EAO M FIRE CHIEF (� CANEY to PW DIR CLERkCPI© PA610E CHF PEC bin G H O) Sep 24 02 04: 25p At,-harized User 8n57817418 p. 1 Housing •AblllbyAssemblymanMar, 3 From Page Al co, Fuebaugydepartment to Make that said homebuyersup to 5 minion in grantstu lo. suffer actual have to cal governments so they can damage before& make down payneut assistance mg a construction defect lawsuit Loans So low-and moderate in th Ih don't have 0f anto wait until come first-time home buyers. semblac Day es inn As. , ' on by Sen.Tom Tor- DSaaamento,a coauthor of the $100mmoningaats to tewazd brT,said in a conference ca➢an cal gommrmneats fit 4 no Thethlo- e b�signings fordable h The measure also requires •A bill by Sen.Joe Dunn,D• builders to provide homebuyers Garden Grove, with that authorizes at least a one yearwarrartty hM prp��m covering certain building com- come ho Preserve�� usingthaCsattiskofbe• The other bills include a se 149 turned into a units. riea� A measure t Assembly- of , D-Lo' from depend on man Alan Lowenthal, D-Long 6 - Proposition 46, a Beach,that win allow the use of $2.1 billion housing bond mea proposition 46 money for hoes. sure oa the November hanOt: ing code enorcement progams, • A measure by Assembly- Davis also wed a biD by As. man Manny Diaz,D-San Jose, sembbimman Dion Aroner,D. that authorizes the Department Berkeley.directing the Housing of Housing and Community De. and Community Development velopmeat to make up to$25 Department to draft a model or ME=in grants to kMal govern. dimm=that 1pca]govm nments meats and nonprofit organiza- can use to make sure new tions to pay for low=income homes can easy,accommodate rental housing developments people with disabilities N<� c N O m72 v N G w N� NAL. at " av o= E v - v m v 3 ° v c c` = Cm wm- o> c o .. ao Q. c m M m (UE m m m E o 0 ° a� C v m 0 z 0 t � 3 o � a c o+ my-, mowEm CL > 0 ,07, v uj. y E-i i z.yrm - oo O 'uc O a•— C c c w C O E N O70OlavE o m o „ v m v > m CL c W CL O - vvm WE'o N V C a E a=+la w:w c O m 0� = •O m O m O J N == O N > u y N C y m -0 �Ga3 C (A N O C' m Nm O m m C O m v = O V E _M au ° � m C m � y Ln E y d a) O 3 _ d (u CL N N ° c v +' 0 C c +0+. 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