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03/16/2004, - GENERAL PLAN HOUSING ELEMENT
fly .r • �.< �� r San Luis Obispo City Council Draft Housin;Element,January 27,2004 f mn aril+ '("'` / I.ij ;l'INI;, CI Of 2 San Us OBI SPO community aevetopment aepantment MISSION STATEMENT Our mission is to identify and serve the needs of all people in a positive and courteous manner and to help ensure that San Luis Obispo remains a healthy, safe, attractive and enjoyable place to live, work or visit. We help plan the City's form and character, support community values, preserve the environment, promote the wise use of resources and protect public health and safety. OUR SERVICE PHILOSOPHY The City of San Luis Obispo Community Development Department staff provides high-quality service whenever and wherever you need it. We will: • Listen to and understand your needs; • Give clear, accurate and prompt answers to your questions; • Explain how you can achieve your goals under the City's rules; • Help resolve problems in an open, objective and fair manner; • Maintain the highest ethical standards; and • Work to continually improve our services. 2 San Luis Obispo City Council Draft Housing Element,January 27,2004 city of San 1UIS OBISPO auafthousinC dement Adopted on , San Luis Obispo City Council Resolution No. (2004 Series) SAN LUIS OBISPO CITY COUNCIL Dave Romero, Mayor John Ewan Christine Mulholland Kenneth Schwartz Allen Settle PLANNING COMMISSION Orval Osborne, Chair Jim Aiken Michael Boswell James Caruso, Vice-Chair Carlyn Christianson Allen Cooper Alice Loh COMMUNITY DEVELOPMENT DEPARTMENT John Mandeville, Director Michael Draze,Deputy Director,Long-Range Planning Jeff Hook, Project PIanner Teri Bowen, Planning Intern City of San Luis Obispo 990 Palm Street P.O. Box 8100 San Luis Obispo, CA 93403 - 8100 3 San Luis Obispo City Council Draft Housing Element,January 27,2004 City Council Resolution No. (attach copy of Resolution) 4 San Luis Obispo City Council Draft Housing Element,January 27,2004 State Housing and Community Development (attach certification letter) 5 San Luis Obispo City Council Draft Housing Element,January 27,2004 f oREWOR6 This Housing Element has been prepared to help San Luis Obispo City residents secure safe housing that will meet their personal needs and their financial circumstances, and to comply with State law. This is the Draft version of the Element approved by the City Planning Commission following approximately four months of review and eight public hearings. The "City Council Hearing Draft" incorporates many changes from the previous drafts issued on August 17, 2003 and December 17, 2003. It also includes changes recommended by the Housing Element Update Task Force, a 17-member ad-hoc committee appointed by the City Council to provide diverse input. As part of the required Housing.Element update process and pursuant to State law, the Draft Housing Element has been forwarded to the City Council for final action. The Housing Element is part of the City's General Plan and is one of 10 "elements" or chapters of that plan. It sets out the City's goals, policies and programs for housing over the next five years. It works in concert with the other plan elements to help achieve the broader community goals as expressed in the General Plan Land Use Element. The other elements are Land Use, Open Space, Circulation, Noise, Safety, Conservation, Energy Conservation, Parks and Recreation, and Water and Wastewater. Under State law, the Housing Element must be updated at least every five years. The City intends to update this Element by July 1, 2008. To purchase additional copies of the Housing Element or other elements of the General Plan, please contact the Community Development Department, City of San Luis Obispo, 990 Palm Street, San Luis Obispo, California 93401-3249. Phone: (805) 781-7170. Fax: (805)781-7173. Web address: www.slocity.ora 6 San Luis Obispo City Council Draft Housing Element,January 27,2004 � city r domAwansan Luis OBl SpO Geneual plan housmG element taBle of contents Page FOREWORD.................................................................................................................. 6 1. INTRODUCTION...........».........................................................»................13 1.10 Purpose.................................................................................................13 1.20 Citizen Participation..............................................:....................:.........14 1.30 Consistency with State Planning Law....................:......:...::.::...:...........14 1.40 General Plan Consistency:.................:....:..........:..................................16 1.50 New in this Element.....:.......:........................................:.......................16 1.60 Housing Element Organization.............................................................17 2. COMMUNITY FACTORS......................................:..................................19 2.10 Community Overview.............................................................................19 2.10.10 Demographic Snapshots..................................................................19 2.10.20 Housing Snapshots....:.................................................:........:...........20 2.10.30 Neighborhood Snapshots..........................:......................................21 3. GOALS,POLICIES AND PROGRAMS...................................................23 3.10 Overview..............................................................................:................23 3.20 Summary of New Programs..:.........:..............................:......................23 3.30 Goals, Policies and Programs..............................................................24 3.40 Implementation Tools............................................................................43 4. QUANTIFIED 4.10 Overview...............................................................................................47 4.20 New Housing Construction Completed..............................................:..47 4.30 New Housing Construction Objectives.................................................48 4.40 Preservation of At-Risk Units..........................................;..:.................48 4.50 Rehabilitation and Preservation Objectives.........................................49 4.60 Quantified Objectives Summary............................................................50 7 San Luis Obispo City Council.Draft Housing.Element,January 27,2004 LIST OF TABLES Page 1. State Housing Element Requirements .................................................................15 2. Inclusionary Housing Requirements....................................................................27 3. Resources/Incentives Available For Housing Activities......................................43 4. Housing Units Completed,January 2001 Through 2003.....................................47 5. New Housing Construction Objectives, January 2004 to July 2008....................48 6. Rehabilitation, Preservation, and Conservation Objectives.................................49 7. Quantified Objectives Summary, 2001-2008.......................................................50 LIST OF FIGURES 1. Areas To Be Considered For Possible Rezoning ................................................35 aI_A n cEs APPENDIX A. COMMUNITY PROFILE................................................................52 1. POPULATION TRENDS AND CHARACTERISTICS a. Age Composition b. Race and Ethnicity 2. EMPLOYMENT TRENDS 3. HOUSEHOLD CHARACTERISTICS a Household Formation and Type b. Household Income 4. HOUSING INVENTORY AND MARKET CONDITIONS a Housing Stock Profile and Population Growth b. Unit Type C. Unit Size d. Tenure e. Vacancy Rates f. Age of Housing Stock g. Housing Condition IL Housing Costs and Rents 5. SUMMARY AND CONCLUSIONS APPENDIX B. ROUSING NEEDS ..»........................................................................79 1. REGIONAL HOUSING NEEDS ASSESSMENT a Existing Housing Needs b. Housing Needs For 2001-2008 2. SPECIAL HOUSING NEEDS a Elderly Persons b. Large Families C. Female-Headed Households d Disabled Persons e. Homeless Persons f. Farm Workers g. Students 8 San Luis Obispo City Council Draft Housing Element,January 27,2004 h. Fraternities and Sororities . i. "Shared"Households 3. CONCLUSIONS APPENDIX C. HOUSING CONSTRAINTS AND RESOURCES..........................97 1. GOVERNMENTAL CONSTRAINTS a. Land Use Controls b. Zoning Regulations and Development Standards C. Specific Plans d Residential Growth Management Regulations e. Architectural Review f. Building and Zoning Code Enforcement g. Processing and Permit Procedures h. Development Fees L Infrastructure I Public Services k Schools 2. NON-GOVERNMENTAL CONSTRAINTS a. Land Costs b. Construction Costs C. Availability and Cost of Financing d Insurance Costs e. Design Expectations f. Investment Expectations 3. REGIONAL HOUSING NEED ALLOCATION AND QUANTIFIED OBJECTIVES a Residential Growth Implications of Acheiving Quantified Objectives b. Water Supply Constraints C. Land Resources and Development Rate APPENDIX D. RESIDENTIAL LAND RESOURCES ............................................133 1. AVAILABILITY OF SITES FOR HOUSING a. Vacant Residential Land b. Underutilized Residential Land C. Vacant or Underutilized Land Suitable for Mixed-Use Development d Vacant or Underutilized Land Designated as Interim Open Space e. Vacant or Underutilized Land Outside City Limits, Within the Urban Reserve, Including Major Expansion Areas 2. EVALUATION OF RESIDENTIAL DEVELOPMENT CAPACITY APPENDIX E. REVIEW OF THE 1994 HOUSING ELEMENT RESULTS........141 1. PROGRESS IN IMPLEMENTING THE 1994 GOALS AND OBJECTIVES APPENDIX F. FIVE-YEAR IMPLEMENTATION PLAN ....................................154 APPENDIX G. HOUSING TASK FORCE RECOMMENDATIONS....................155 9 San Luis Obispo City Council Draft Housing Element,January 27,2004 APPENDIX H. SUN MARY OF PUBLIC COMMENTS ON THE DRAFT..........174 HOUSING ELEMENT APPENDIX I. GENERAL PLAN CONSISTENCY ANALYSIS ............................175 APPENDIX J. PUBLIC DISTRIBUTION LIST ......................................................189 APPENDIX K. HOUSING RESOURCES AND OUTREACH INFORMATION 190 APPENDIX L. REFERENCES ...................................................................................191 APPENDIX M. GLOSSARY.......................................................................................192 APPENDIX LIST OF TABLES A-1. Population Growth, 1980-2000...........................................................................53 A-2. Population Projections, 2001-2008.....................................................................54 A-3. Age Distribution, 2000.........................................................................................55 A-4. Pre-Primary School Enrollment, 1990 and 2000................................................55 A-5. Racial and Ethnic Composition, 2000.................................................................56 A-6. Projected Change in Racial and Ethnic Composition by Percent, 2001-2010....56 A-7. Occupations, San Luis Obispo City, County and California, 2000.....................57 A-8. Number of Households, 1990-2000.....................................................................59 A-9. Household Size, 1990—2000...............................................................................59 A-10. Households by Type, Percent of Total Households, 1990-2000..........................60 A-11. Median Household and Family Incomes, 1989 and 1999...................................61 A-12. Per Capita Incomes, 1989 and 1999, San Luis Obispo City, County andCalifornia...............................................................................................:......62 A-13. State Income Categories......................................:...............................................62 A-14. Households by State Income Category, 1999.............:........................................63 A-15. Households Below Poverty Level by Household Type, 1999...............................63 A-16. Residential Development, 1995-2002..................................................................66 A-17. Composition of Housing Stock by Unit Type, 1990 and 2000.............................67 A-18. Number of Bedrooms by Tenure, 2000................................................................68 A-19. Age of Housing Stock by Tenure, 2000................................................................69 A-20. Single Family House Values, 2000......................................................................71 A-21. Median Monthly Owner Cost and Median Gross Rent as a Percentage of Household Income, 1999.................................................................................73 A-22. Dwelling Units by Rent Costs and Number of Bedrooms, 2000..........................73 A-23. Range and Average Rent Costs, July 2003.........:................................................74 10 San Luis Obispo City Council Draft Housing Element,January 27,2004 APPENDIX LIST OF TABLES A-24. Comparison of Housing Costs as a Percentage of Gross Monthly Income, 1989 and 1999.............................................:.......:...........:......................75 A-25. Maximum Affordable Rent and Purchase Price., by Income Category, July2003...............................................................:..............................................76 B-1. Residential Overcrowding, San Luis Obispo City, County and California, 2000............................................................................. .......................................81 B-2. Average Household Size by Tenure, San Luis Obispo City, County and California, 2000...............................................:.......:.....................:.....................82 B-3. Regional Housing Needs Allocation Plan for the County of San Luis Obispo, January 2001 -July 2008........................:.................:.....:...................................83 B4. Elderly Mobility and Disability Status, 2000.......................................................84 B-5. Special Needs Housing and Residential Care Facilities, 2003...........................86 B-6. Large Households by Tenure, 2000...:.................................................................87 B-7. Female-Headed Households, 2000.............:........................................................88 B-8. Persons Reporting Mobility or Self-Care Limitations, 2000...............................89 B-9. Summary of Housing Needs................:,........:.:..:.................................................95 C-1. Land Use Categories Allowing Residential Uses.. .............................................98 C-2. Summary of Residential Development Standards, 2003......................................100 C-3. Selected Flexible Residential Development Standards,2003..............................101 C-4. Estimated Housing Capacity in Expansion Areas, 2003.....................................104 C-5. Major Expansion Areas Phasing Plan, 2002.......................................................107 C-6. Code Enforcement Cases, 2001...........................................................................112 C-7. Comparative Development Fee Summary, 2003..................................................117 C-8. Residential Development Impact Fees Per Dwelling Unit, July 2003.................120 C-9. Water Available For Residential Development, 2003.........................................121 C-10. Possible New Water Sources, 2002 2022 .........................................................122 C-11. Regional Housing Need Allocation and Quantified Objectives, January 2001 -July 2008.....................................................................:............................127 C-12. Maximum Residential Development Potential Based on Anticipated Water Supplies, January 2003-July 2008..........................................................129 C-13. Population Change, 1977-2002........................................................................132 D-1. Vacant and Underutilized Land in City by Zone, June 2003...............................134 D-2. Potential Number of Dwellings by Bedroom.......................................................134 D-3. Vacant and Underutilized Land in the Urban Reserve, by Sub-Area, June2003.............................................................................................................138 D4. Summary of Residential Development Potential,2001 -2022............................140 E-1. Housing Element Evaluation, 1994-2001 .........................................................141 E-2. Progress in Achieving Housing Element Qualified Objectives, 1994-2001 .....152 I-1. General Plan Consistency Evaluation Matrix......:............I..................................175 11 San Luis Obispo City Council Draft Housing Element,January 27,2004 APPENDIX LIST OF FIGURES A-1. Housing and Population Growth, 1980-2010...................................................... 65 C-1. Major Expansion Areas, 2003.............................................................................105 C-2. General Plan Anticipated Housing and Population Growth...............................106 C-3. Comparison of Development Fees for a 2,000 Square-Foot, Single- FamilyHouse, 2003.............................................................................................119 C-4. Residential Construction, 1955—1999................................................................131 D-1. In-city Properties with Additional Development Capacity..................................135 D-2. Percent of City Residential Development Capacity by Zone, in Density Units...137 D-3. Residential Development Capacity, by Dwelling Units, 2003.............................139 12 San Luis Obispo City Council Draft Housing Element,January 27,2004 chaptEu 1 mtuoauctjon 1.10 Purpose The City has prepared this document to help its citizen's secure adequate and affordable housing, and to meet State law. In addition, this Housing Element update has the following basic objectives: • To evaluate and quantify community housing needs, constraints and available resources to effectively satisfy those needs; • To increase public awareness and understanding of the City's housing situation and its goals to encourage public participation in addressing those housing needs; • To provide a comprehensive document that includes goals, policies and programs to help guide community efforts to meet housing needs through informed decision-making on land use and housing choices; • To help develop more affordable housing, and a wider variety of housing, to meet the City's housing needs for the current planning period which runs from January 1, 2001 to July 1, 2008; • To track and document the effectiveness of City programs in meeting housing needs, and to evaluate opportunities for improving those programs; • To enable the City to secure financial assistance for the construction of affordable housing for very low-, low- and moderate-income persons; Under State law, cities are responsible for planning for the well being of their citizens. This Housing Element is the City's strategy for meeting the housing needs of its citizens, for preserving and enhancing neighborhoods, and for increasing affordable housing opportunities for very-low, low and moderate income people. It is the primary policy guide for local decision- making on all housing matters. Housing consumers, property owners, developers, elected officials, planners and others in the City will use this Element to help make important personal, financial and business decisions that will have community-wide impact. The Housing Element also describes the City's demographic, economic and housing stock as required by State law. Last, it sets forth the goals, strategies, policies and detailed programs necessary to address projected housing needs. 13 San Luis Obispo City Council Draft.Housing Element,January 27,2004 1.20 Citizen Participation The Housing Element expresses the community's housing priorities, goals, values and hopes for the future. Preparing the Element is a sizable task that involves extensive community input and the work of many individuals. Under State law, local governments must be diligent in soliciting participation by all segments of the community in this effort. During preparation of this Element Update,citizen participation was actively encouraged through the following forums: • Eleven public hearings before the City's Planning Commission and Council; • Numerous Housing Element Update Task Force meetings held over a six month period; • City website; • Public notices in local newspapers. Appendix K provides additional details regarding community outreach efforts. 1.30 Consistency with State Planning Law California cities and counties must prepare housing elements as required by State law set forth in Sections 65580 to 65589.8 of the California Government Code. The law mandates that housing elements include "an identification and analysis of existing and projected housing needs and a Statement of goals, policies, quantified objectives and scheduled programs for the preservation, improvement and development of housing." This Element fulfills that requirement and provides a detailed strategy for implementing the City's housing goals through 2008. State housing goals rely on the effective implementation of housing policies at the local level -- policies found primarily in local housing elements. To ensure local housing policies are consistent with State law, the State Department of Housing and Community Development (HCD) reviews local housing elements and reports its written findings to the local government. The housing element must also be consistent with the other general plan elements and must address several specific requirements regarding the element's scope and content. Table 1 summarizes State requirements and identifies the applicable sections of the City of San Luis Obispo Housing Element where these requirements are addressed. 14 San Luis Obispo City Council Draft Housing Element,January 27,2004 Table 1 State I mmu Element Re uirements Required Housing Element Component Reference A. Housing Needs Assessment Page ZB�; 1. Analysis of population trends in relation to countywide trends P. 1P 2. Analysis of employment trends-in relation to regional trends P. 57 3. Projection and quantification of existing and projected housing needs P. 48 for all income groups 4. Analysis and documentation of housing characteristics, including: a) housing costs in relation to incomes; P. 7k p b)residential overcrowding; P.Af c) housing stock condition P.68- f . 5. Inventory of land suitable for residential development; including vacant P.133 1 and underutilized sites having development potential, and analysis of constraints to development of these sites. 6. Analysis of existing and potential government constraints on the P. 9or maintenance, improvement or development of housing for all income levels. 7. Analysis of existing and potential non-governmental and market P. 1 constraints on maintenance, improvement or development of housing for all income groups. 8. Analysis of special housing needs: disabled persons,elderly, large P. families, female-headed households, farm workers. 9. Analysis of the needs of homeless individuals and families. P. 89 J r 10. Analysis of opportunities for energy conservation with respect to P. 9r residential development. B. Goals and Policies 1. Identification of San Luis Obispo's housing goals, quantified objectives p. VE? and policies regarding housing maintenance, improvement and development. C. Implementation Program 1. Identify adequate sites that will be made available through appropriate p.+33—f'� ' action with required public services and facilities for a variety of housing.types and for all income levels. 2. Program to assist in the development of adequate housing for low- and p. 2 —43 moderate-income households. 3. Identify, and when appropriate and possible,remove governmental P. 9T, .2 -43 15 San Luis Obispo City Council Draft Housing Element,January 27,2004 constraints to housing maintenance, improvement and development. 4. Identify programs to conserve and improve San Luis Obispo's existing p. 14- 43 and affordable housing stock 5. Promote housing opportunities for all persons. p. -43 6. Identify programs to address the potential conversion of assisted p�46' housin develo ments to market rate units 1.40 General Plan Consistency The Housing Element is one part of the City of San Luis Obispo General Plan. State law requires that general plans contain an integrated and internally consistent set of goals or policies. Although the Housing Element is the primary source of information on housing policies, programs and resources, other General Plan documents also address or affect housing. By law, new development projects must be consistent with all elements of the General Plan. For example, the Land Use Element and Circulation Element set the City's policies for land use and transportation, which in turn, affect how, when and where the City's housing needs can best be met. While housing is important, it is but one of many community goals the General Plan addresses. The other elements contain policies that seek to preserve and enhance the quality of life San Luis Obispo citizens enjoy. Clean air and water, open space, parks and recreation, preservation of natural, historic and cultural resources, public services and safety are also essential qualities of the community. These policies are of equal importance with those of the Housing Element. This Element has been reviewed and determined to be consistent with the City's other General Plan elements, and the policies and programs in the Housing Element reflect policies and programs contained in other parts of the General Plan. Appendix I includes that evaluation. As other elements are updated or amended, the Housing Element will be reviewed to ensure general plan consistency is maintained. 1.50 New in This Element In 2004, San Luis Obispo faces a more challenging housing environment than the one that shaped the previous Housing Element. Significant changes, both in California's economy and in State housing laws, have raised public awareness and concerns about the need for more affordable housing. Changes to State law also have expanded the scope and complexity of housing elements. And while efforts have been made to adhere to the previous Element's goals, policies and programs where possible, this update contains new policies and programs to address these changes. The updated element also has a new format designed to make it simpler and easier to use. The updated Element includes the following sections in response to new legal requirements: 16 San Luis Obispo City Council Draft Housing Element,January 27,2004 • Analysis of constraints on housing for persons with disabilities (Ch. 671, Statutes of 2001) • Programs to remove constraints or accommodate housing for persons with disabilities (Ch. 671, Statutes of 2001) • Programs addressing secondary dwelling units (Ch. 1062, Statutes of 2002) • Policies regarding changes to residential density (Ch. 706, Statutes of 2002) • Provisions to provide flexibility in identifying adequate sites (Ch. 796, Statutes of 1998) In addition, the Appendices include several new sections on community outreach, a glossary, identification of residential land resources, and housing references to assist those seeking to plan, build, buy or rent housing in San Luis Obispo. The Housing Element will be updated by July 2008. Citizens, the Planning Commission or the City Council may propose up to four amendments to the Element each year, and those changes may be adopted by the City Council after public hearings are held. For more up-to-date or detailed information concerning population, housing, land use and development review in San Luis Obispo, please contact the Community Development Department at City Mall, 990 Palm Street (P.O. Box 8100), San Luis Obispo, CA 93401-3249, phone (805) 781-7170, or access the City website @ www.slocin%ore. 1.60 Housing Element Organization. The Housing Element is organized into four chapters: Introduction, Community Factors, Goals, Policies and Programs, and Quantified Objectives. These chapters summarize the demographic, physical, economic, environmental and cultural factors that shape San Luis Obispo's housing needs, and provide the policy and program map the City will follow to meet its housing needs. Given the detailed and lengthy analysis involved in the preparation of the Housing Element, supporting background material has been included as appendices. Appendices are not adopted general plan policy. The appendices provide comprehensive information used to develop the Housing Element, and contain supplementary information on housing, land resources, development constraints and other relevent data. These appendices are:. • Community Profile (Appendix A) • Housing Needs (Appendix B) • Housing Constraints and Resources (Appendix C) • Residential Land Resources (Appendix D) • Review of the 1994 Housing Element Results (Appendix E) 17 San Luis Obispo City Council Draft Housing Element,January 27,2004 • Five-Year Implementation Plan (Appendix F) • Housing Task Force Recommendations (Appendix G) • Summary of Public Comments on the Draft Housing Element (Appendix H) • General Plan Consistency Analysis (Appendix I) • Public Distribution List (Appendix J) • Housing Resources and Outreach Information (Appendix K) • References (Appendix L) • Glossary (Appendix M) Pursuant to the California Environmental Quality Act, an assessment of potential environmental impacts resulting from the Housing Element also has been prepared and is available separately from the Community Development Department. 18 San Luis Obispo City Council Draft Housing Element,January 27,2004 chapteR 2 community factors 2.10 Community Overview San Luis Obispo is a compact urban community blessed with rich ethnic, cultural and historical traditions. Its namesake, Mission San Luis Obispo de Tolosa, founded in 1772, stands as the community's physical, cultural and spiritual center. With an estimated population in 2003 of 44,359 people, San Luis Obispo is the largest city in terms of population in San Luis Obispo County and serves as the County seat. Situated in a valley and framed by rolling hills, the City's setting and visual character are distinctive. The "morros", a series of extinct volcanoes that transect the city, produce a dramatic backdrop and create the City's unique skyline. San Luis Obispo is home to California State Polytechnic University, Cuesta College and Camp San Luis Obispo (California Army National Guard), and is the retail, business, governmental, and transportation hub of the County. In assessing the City's housing issues and needs, many factors were considered These factors became the foundation for the Element's preliminary goals, policies and programs. Preliminary housing goals and policies were then refined through the public review process. An overview of these factors is described below, including snapshots of the City's key demographic, economic and housing characteristics. A detailed analysis of community factors is provided in Appendix A. 2.10.10 Demographic Snapshots ❑ San Luis Obispo has grown at a slow, steady pace since 1980. Looking back over the last 23 years, the City has grown at an average rate of one percent per year, with periods of faster or slower growth reflecting national and statewide economic cycles. For example, in the late 1980s and early 1990s, the City grew at an annual average rate of two percent. This was followed by a much slower rate of growth in the 1990s. Between 1990 and 1999, the City grew at annual average of only 0.3 percent, well below the General Plan's one percent growth target. In the new millennium, the city has grown at an annual average rate of 1.3 percent. ❑ When compared with California, the most ethnically diverse state in the nation, the City and County of San Luis Obispo are not as ethnically diverse. The 2000 Census found that over 84 percent of the City is white, about five percent is Asian, with much smaller percentages of Native Americans, Pacific Islanders, other single races or persons self- identifying with two or more races. Persons of Hispanic or Latino origin are classified separately under the 2000 Census and can be of any race. About 12 percent of the City's population is Hispanic, compared with 16 and 33 percent in the County and State, respectively. 19 San Luis Obispo City Council Draft Housing Element,January 27,2004 ❑ Many segments of the City's population have difficulty finding affordable housing due to their economic, physical or sociological circumstances. These special needs groups may include the elderly, families, single parent households, people with disabilities, very low and low-income residents, and the homeless. ❑ In 1999, City households earned less, on the average, than their county and State counterparts. The median household income (including both family and .non-family households) was $31,926, compared with $42,428 for the County and $47,493 Statewide. This reflects the high percentage of student households in San Luis Obispo. Many students attending California State Polytechnic University (Cal Poly) and Cuesta College are nominally classified as lower income, although often bring significant financial resources through parental support. o While median City household incomes were less than many other areas of coastal California, median City housing costs were higher than both the county and State. Housing costs in San Luis Obispo have risen sharply in recent years while average household incomes have risen slowly or remained steady. A growing disparity between household income and housing costs is forcing many to seek housing outside the City of San Luis Obispo. ❑ San Luis Obispo contains the largest concentration of jobs in the County. During workdays, the City's population increases to an estimated 70,000 persons. 2.10.20 Housing Snapshots ❑ City housing costs have risen dramatically since 1994. Housing cost increases have outpaced household income increases. As a result, in 2003 only about 23 percent of San Luis Obispo residents can afford to buy a median-priced home based on their income alone. ❑ Slightly more city residents rent than own housing. Rental housing costs also have increased, although not as dramatically as for sale housing. ❑ In the last decade, the rate of housing production in San Luis Obispo slightly exceeded the rate of population growth. Between 1990 and 2000, the City added .about 2,200 residents — an increase of just over five percent. During the same period, the City's housing stock grew by about 1,400 units—an increase of about eight percent. ❑ San Luis Obispo's housing market is strongly influenced by Cal Poly and Cuesta College enrollment. At Cal Poly, on-campus student housing is very limited, and is non-existent at Cuesta College. Most of the area's students live off campus, in single family or multi- family rental units in the City of San Luis Obispo. Under City zoning regulations, up to five adult students can live together in a house and share rental costs. Consequently, 20 San Luis Obispo City Council Draft Housing Element,January 27,2004 college students can often out compete non-student households for rental housing in areas that were historically single-family residential neighborhoods. ❑ Just over three quarters of the City's housing stock was built before 1980. Despite its age, the City's housing stock is generally in fair to good condition, with little outward evidence of substandard or blighted conditions. In recent years, illegal garage conversions and "bootleg" second units in low- and medium-density residential neighborhoods, lack of property maintenance, noise and parking have been the focus of citizen complaints and city code enforcement actions. ❑ While San Luis Obispo City appears mostly "built out", significant areas of developable land remain that could help meet existing and future housing needs. A land inventory conducted by the City in 2003 indicated that within city limits, there were about 180 acres of vacant land, plus about 250 acres of"underutilized" land with additional development potential. Outside the existing city limits but within the City's Urban Reserve, there were about 124 acres of vacant land, about 12 acres of underutilized land,plus 641 acres in two residential expansion areas: the Margarita and Orcutt Specific Plan Areas. In 2003,draft specific plans for these expansion areas indicate there is a total development potential of about 1,850 dwellings. 2.1030 Neighborhood Snapshots ❑ Code enforcement, neighborhood compatibility and property maintenance complaints in low- and medium-density residential neighborhoods have increased dramatically in recent years. Since 1994, Complaints received by the Community Development Department regarding building and zoning code violations, garage conversions, substandard housing, high-occupancy residential uses, fence height, trailers, noise disturbances, parking and land use violations have grown by 51 percent. In 2000, the Office of Neighborhood Services was established as part of the Police Department to address primarily parking and property maintenance issues. Since 2000, the ONS has issued over 1,850 citations for property maintenancelneighborhood enhancement violations, and over 8,700 citations for noise ordinanceviolations. ❑ San Luis Obispo became a city in 1856. It has evolved from a small rural village of just over 2,200 people in 1880 to a vibrant "metropolitan" area of over 44,000 residents in 2003. Its diverse neighborhoods reflect that evolution in terms of land use, population density, street width and appearance, applicable development codes and architectural style. The oldest neighborhoods are close to the downtown area, roughly bordered by State Highway 101, the railroad tracks and High Street. The newest neighborhoods are in the south and southwest areas of the City. ❑ San Luis Obispo has a strong "sense of place" It began with the founding of Mission San Luis Obispo De Tolosa in 1772, and before that, was home to a large Chumash village, 21 San Luis Obispo City Council Draft Housing Element,January 27,2004 attracted to the area due to its mild climate and abundant resources. San Luis Obispo has been shaped by persons of many backgrounds, including: Native Americans, Spanish, Mexican, Chinese, English, French, German, Irish, Portuguese, Swiss-Italian, Japanese, Filipino, and many others. The community takes pride in its rich, multi-ethnic and multi- cultural heritage, and its many historic homes and commercial buildings. Architectural and historic preservation are important considerations in many neighborhoods. ❑ San Luis Obispo's neighborhoods traditionally have been made up mostly of single- family housing. Low-density, detached single-family housing is still the City's predominant residential land use by land area. Of the roughly nine square miles of zoned land, about 28 percent is zoned for low-density residential development. By contrast, about 14 percent is zoned for multi-family residential use (Medium, Medium-High, and High density residential uses). 22 San Luis Obispo City Council Draft Housing Element,January 27,2004 ChaPUR 3 Goats, policies ana puoc,Rams 3.10 Overview This chapter of the Housing Element includes the City's Housing Implementation Plan for the period January 2001 to July 2008. The following goals, policies and programs are based on an assessment of the City's needs, opportunities and constraints; an evaluation of its existing policies and programs; and community input from the Housing Element Update Task Force, community groups, public hearings, workshops and correspondence. 3.20 Summary of New Programs Higher housing costs, population growth, and the State's economic recession are making it far more difficult for many households to meet their housing needs today than in the mid-1990s. Consequently, San Luis Obispo's housing strategy has expanded to meet those needs by: • Exempting housing affordable to moderate income households, and housing in the. Downtown Core, from Residential Growth Management Regulations. • Providing incentives to encourage developers to build more affordable compact rental and ownership housing. • Initiating rezoning of several areas suitable for higher density,infill housing. • Establishing a "First-time Homebuyers Program" to assist low- and moderate-income households in purchasing a home. • Using a combination of State and Federal grants, affordable housing fends, density bonuses and other incentives, accommodate development of 4,087 dwellings during the planning period from January 1, 2001 to July 1, 2008. • Amending the City's Affordable Housing Standards to lower rent levels for dwellings intended to be affordable for moderate-income households and individuals. • Using Section 108 Federal guaranteed loan funds and other funding sources, initiate development of a major downtown mixed-use project with both affordable and market-rate housing. • Requiring most new multi-story buildings in the Downtown Core to provide housing above the ground floor. 23 San Luis Obispo City Council Draft Housing Element,January 27,2004 0 Providing special incentives to encourage downtown residential development, and instituting more flexible parking requirements for specified housing developments where alternative parking/transportation strategies exist. 40 Seeking new funding sources to help defray City development review and impact fees for developers of very low-, low- and moderate-income housing. o Reducing obstacles to the production of small residential projects by exempting the construction, remodeling or relocation of most developments of four dwellings or less from Architectural Review Commission review. o Promoting mixed-use development, infill residential development, and more compact, higher density housing where appropriate. This strategy combines requirements and incentives to increase production of both affordable and market-rate housing over the next-four and a half years. Like many small cities with only limited public funds for housing, the City has relied on the private sector to meet a portion of its affordable housing needs. Increasingly, local governments are finding it necessary to assist developers if adequate housing is to be built at prices that citizens can afford. Across the U.S., it has become apparent that the most effective programs involve cooperative public/private efforts to produce affordable housing. This requires that the City take a more active role in planning,funding and promoting affordable housing than has been its practice. This Housing Element update builds upon programs introduced in 1994 to promote affordable housing and expands incentives for affordable housing construction. For example, using Community Development Block Grant funds, the City has established a Housing Programs Specialist position to actively support affordable housing by soliciting grants, loans, and other forms of assistance. 3.30 Goals, Policies and Programs This chapter describes the City's housing goals, policies and programs; which together form the blueprint for housing actions during the seven and one-half year period covered by this Element. Goals, policies and programs are listed in top-to-bottom order, with goals at the top and being the most general Statements, working down to programs, the most specific Statements of intent. Here is how the three levels of policy differ: ❑ Goals are the desired results that the City will attempt to reach over the long term. They are general expressions of community values or preferred end states, and therefore, are abstract in nature and are rarely fully attained. While it may not be possible to attain all goals during this Element's planning period, they will, nonetheless, be the basis for City policies and actions during this period. 24 San Luis Obispo City Council Draft Housing Element,January 27,2004 ❑ Policies are specific statements that will guide decision-making. Policies serve as the directives to designers, decision makers and others who will initiate or review new development projects. Some policies stand alone as directives, but others require that additional actions be taken. These additional actions are listed under "programs" below. Most policies have a time frame that fits within this Element's planning period. In this context, "shall" means the policy is mandatory; "should" or "will" indicate the policy should be followed unless there are compelling or contradictory reasons to do otherwise. ❑ Programs are the core of the City's housing strategy. These include on-going programs, procedural changes, general plan changes, rezonings or other actions that help achieve housing goals. Programs translate goals and policies into actions. Goal 1.1 Safety. Providing safe, decent shelter for all residents. 1.2 Policies 1.2.1 Assist those citizens unable to obtain safe shelter on their own. 1.2.2 Support and inform the public about fair housing laws and programs that allow equal housing access for all city residents. 1.2.3 Maintain a level of housing code enforcement sufficient to correct unsafe, unsanitary or illegal conditions and preserve safe housing. 13 Programs 1.3.1 Provide financial assistance to very-low, low- and moderate-income homeowners and renters for the rehabilitation of approximately 45 rental housing units and 45 single- family or mobile home units using Federal, State and local housing funds. 1:3.2 As staffing and funding levels allow, continue code enforcement to expedite the removal of illegal or unsafe dwellings, to eliminate hazardous site or property conditions, and resolve chronic building safety problems. 1.3.3 Enact a Rental Inspection Program to improve the condition of the City's housing stock. 1.3.4 As funding allows, continue to support local and regional solutions to homelessness by funding the SLO Homeless Shelter and Prado Day Center for Homeless Persons. 1.3.5 Create an educational campaign for owners of older residences informing them of ways to reduce the seismic hazards commonly found in such structures, and encouraging them to undertake seismic upgrades. 25 San Luis Obispo City Council Draft Housing Element,January 27,2004 Goal 2.1 Affordability. Accommodate affordable housing production that helps meet the City's Quantified Objectives. 2.2 Policies 2.2.1 Income Levels For Affordable Housing. For purposes of this Housing Element, affordable housing is that which is obtainable by a household with a particular income level, as further described in the City's Affordable Housing Standards. Housing affordable to Very-low, Low, and Moderate-income persons or households shall be considered"affordable housing." Income levels are defined as follows: Very low: 50% or less of County median household income. Low: 51% to 80% of County median household income. Moderate: 81% to 120% of County median household income. Above moderate: 121% or more of County median household income. 2.2.2 Index of Affordability. The Index of Affordability shall be whether the monthly cost of housing fits within the following limits: ❑ For very low- and low-income households, not more than 25% of monthly income. ❑ For moderate-income households,not more than 30% of monthly income. ❑ For above-moderate income households, no index. These indices may be modified or expanded if the State of California modifies or expands its definition of affordability for these income groups. 2.2.3 For housing to qualify as "affordable" under the provisions of this Element, guarantees must be presented that ownership or rental housing units will remain affordable for the longest period allowed by State law, or for a shorter period under an equity-sharing or rehabilitation agreement with the City. 2.2.4 Encourage housing production that provides affordable housing for all financial strata of the City's population, in the proportions shown in the Regional Housing Needs Allocation, 2001 - 2008. For this Element's planning period, the proportions shall be: very low income, 34 %; low income, 19 %; moderate income, 20 %; above moderate income, 27 %. 23 Programs 2.3.1 Amend the Inclusionary Housing Regulations to require that new residential subdivisions and residential development projects meet the inclusionary requirement 26 ;an Luis Obispo City Council Draft Housing Element,January 27,2004 by: 1) building the required affordable housing on- or off-site, 2) dedicating real property, or 3) rehabilitating units with guarantees the units remain affordable, pursuant to the Affordable Housing Standards, as shown in Tables 2 and 2A, and as further described in the Inclusionary Housing Ordinance. Table 2 Inclusionary Housing Requirement Type of Development Project Residential,5-19 Dwellings Rearre den ' 20 or Commercial mo Build 3%low or 5%moderate Adjust base Build 2 ADUs per acre,but not less o, cost Affordable Dwelling Units requirement per than 1 ADU per project; (ADUs2),but not less than 1 Table 2A ADU per project; Or r y U o or r. pay in-lieu fee equal to 5%of pay in-lieu fee equal to 5%of building building valuation.3 valuation. 0 g Build 5%low-and 10% Build 2 ADUs per acre,but not less as moderate-cost ADUs;but not than 1 ADU per project; e less than 1 ADU per project; Adjust base or o`o or requirement per CL Table 2A pay in-lieu fee equal to 5%of building e pay in-lieu fee equal to 15%of valuation. building valuation. Developer may build affordable housing in the required amounts, pay in-lieu fee based on the above formula, or dedicate real property. 2Affordable Dwelling Units must meet City affordability criteria listed in Goal 1.22. 3"Building Value" shall mean the total value of all construction work for which a permit would be issued, as determined by the Chief Building Official using the Uniform Building Code. 27 San Luis Obispo City Council Draft Housing Element,January 27,2004 TABLE 2A Pcojecf Inclusionary Housing Requirement Density Adjustment Factor-2 (Density Units/Net Average Unit Size.(sq.ft.) Acre) - Up to 1,201-1,500 1,501-2000 2,001-2,500 2,501- >3,000 1,200 _ 3,000 - 3b or more 0 0 .75 1 1.25 1.5 2435.99 0 0 .75 1.25 1.25 1.5 12-23.99 0 .25 1 1.25 1.5 1.75 7-11.99 0 .5 1 1.5 1.5 1.75 -0 0 .5 1.25 1.5 1.75 2 Including allowed density bonus,where applicable. 2Multiply the total base Inclusionary Housing Requirement(either housing or in-lieu percentage) by the adjustment factor to determine requirement. 2.3.2 Maintain a city housing fund to be used to develop affordable housing units and acquire land for affordable housing projects. To qualify for such public assistance, the development of affordable units must include guarantees the units will remain affordable for the longest period allowed by State law. Inclusionary housing in-lieu fees will be placed into this fund. 2.3.3 Review existing and proposed building and planning policies regulations to determine whether there are changes possible that could assist the production of affordable housing but that do not conflict with other General Plan policies. Such periodic reviews will seek to remove regulations that are no longer needed. 2.3.4 Adopt permit streamlining procedures to speed up the processing of applications and construction permits for affordable housing projects. City staff and commissions should give such projects priority in allocating work assignments, scheduling, conferences and hearings, and in preparing and issuing reports. 2.3.5 Review and revise building and planning regulations to encourage "green building technology", and to allow construction of personalized, unconventional housing types that reduce cost and/or energy and materials consumption, provided that residential quality and safety can be maintained. 2.3.6 Pursue alternative funding sources for the payment of City impact fees so that new dwellings that meet the City's affordable housing standards can mitigate their facility and service impacts without adversely affecting housing affordability. 28 an Luis Obispo City Council Draft Housing Element,January 27,2004 :.3.7 To the extent additional funding sources can be identified to offset impacts on the General Fund, exempt dwellings that meet the moderate income, Affordable Housing Standards from planning, building and engineering development review and permit fees, including water meter installation fee. Retain current exemptions for very-low and low-income households. >..3.8 Help coordinate public and private sector actions to encourage the development of housing that meets the City's housing needs. ?.3.9 Assist with the issuance of bonds, tax credit financing, loan underwriting or other financial tools to help develop or preserve affordable units through various programs, including, but not limited to: (1) below-market financing and (2) subsidized mortgages for very-low, low- and moderate-income persons and first-time home buyers, and(3) self-help or"sweat equity" homeowner housing. 2.3.10 Amend Affordable Housing Standards to modify the method for calculating maximum moderate-income rental costs, so that moderate-income rents are proportionately consistent with rental costs for very low- and low-income renters, to the extent allowed by State and Federal law. 2.3.11 Amend development standards to allow second residential units ("granny flats") on most residentially-zoned lots by right; and to allow second residential units on non- conforming lots and in planned developments without the need for a PD zoning amendment, subject to discretionary approval and architectural review. 2.3.12 In conjunction with the Housing Authority and other local housing agencies, provide ongoing technical assistance and education to tenants, property owners and the community at large on the need to preserve at-risk units as well as the available tools to help them do so. Goal 3.1 Mousing Conservation. Conserve the housing stock and prevent the loss of safe, affordable housing and the displacement of current occupants. 3.2 Policies 3.2.1 Encourage the rehabilitation, remodeling or relocation of sound or rehabitable housing rather than demolition. Demolition of non-historic housing may be permitted where conservation of existing housing would preclude the achievement of other housing objectives or adopted City goals. 3.2.2 Discourage the removal or replacement of housing affordable to very low- and low- income households by higher-cost housing unless: (1) it can be demonstrated that rehabilitation of lower-cost units at risk of replacement is financially or physically 29 San Luis Obispo City Council Draft Housing Element,January 27,2004 infeasible, or (2) an equivalent number of new units comparable or better in affordability and amenities to those being replaced are provided, or (3) the project will correct substandard, blighted or unsafe housing; and (4)replacement will not adversely affect a designated historic resource. 3.2.3 Avoid permit approvals, municipal actions or public projects that remove or adversely impact affordable housing, unless such actions are necessary to achieve General Plan objectives and no feasible alternatives exist. 3.2.4 Encourage seismic upgrades of older dwellings to reduce the risk of bodily harm and the loss of housing in an earthquake. 3.2.5 Encourage the construction, preservation, rehabilitation and expansion of residential hotels, group homes, integrated community apartments, and other types of single-room occupancy dwellings. 3.2.6 Preserve historic homes and other historic residential buildings, historic districts and unique or landmark neighborhood features. 33 Programs 3.3.1 When the City finds affordable unit removal is necessary in connection with a municipal project, it shall help displaced residents find affordable replacement housing and assist with relocation costs. 3.3.2 When the City permits private development projects that displace affordable housing, it will require the developer to assist displaced residents find affordable local replacement housing.. Such measures may include: first priority in purchasing or renting new affordable dwellings to be developed on-site, assistance with relocation costs, or other financial measures. 3.3.3 Evaluate, and where necessary, revise building, zoning and fire code requirements which discourage housing and encourage the conversion of housing to other uses. 3.3.4 Using State or Federal grant funds such as Community Development Block Grants, or other funding sources, the City will establish a housing rehabilitation program offering low-cost loans or other rehabilitation assistance to those who cannot afford or obtain conventional financing. The purposes of the program shall be to remove unsafe, unsanitary or illegal conditions, maintain safe housing, and preserve neighborhoods. 3.3.5 To preserve housing in the Downtown Core (C-D Zone) and the Downtown Planning Area, the City will adopt a "no net housing loss" program by amending the Downtown 30 San Luis Obispo City Council Draft Housing Element,January 27,2004 Housing Conversion Permit ordinance. The amendment shall ensure that within each area, the number of dwellings removed shall not exceed the number of dwellings added on an area-wide basis. 3.3.6 Identify residential properties and districts eligible for local, State or Federal listing and prepare guidelines and standards to help property owners repair, rehabilitate and improve properties in a historically and architecturally sensitive manner. 3.3.7 To encourage housing rehabilitation, amend the Affordable Housing Standards to allow a reduced term of affordability for rehabilitated units, to the extent allowed by State or Federal law,but not less than three years. 3.3.8 Establish a monitoring and early warning system to track affordable housing units at- risk of being converted to market rate housing. Goal 4.1 Mixed-Income Housing. Preserve and accommodate existing and new mixed- income neighborhoods and seek to prevent neighborhoods or housing types that are segregated by economic status. 4.2 Policies 4.2.1 Within newly developed neighborhoods, housing that is affordable to various economic strata should be intermixed rather than segregated into separate enclaves. The mix should be comparable to the relative percentages of very-low, low,moderate and above-moderate income households in the City's quantified objectives. 4.2.2 Include both market-rate and affordable units in apartment. and residential condominium projects and intermix the types of units. Affordable units should be comparable in appearance and basic quality to market-rate units. 4.2.3 Very low-income housing developments, such as those developed by the Housing Authority of the City of San Luis Obispo or other housing providers, may be located in any zone that allows housing, and should be dispersed throughout the City rather than concentrated in one neighborhood or zone. In general, 23 dwellings should be the maximum number of very-low-income units developed on any one site. 4.2.4 In its discretionary actions, housing programs and activities, the City shall affirmatively further fair housing and promote equal housing opportunities for persons of all economic segments of the community. 31 San Luis Obispo City Council Draft Housing Element,January 27,2004 4.3 Program 4.3.1 Review new development proposals for compliance with City regulations and revise projects or establish conditions of approval as needed to implement the mixed- income policies. Goal 5.1 Housing Variety and Tenure. Provide variety in the location, type, size, tenure, and style of dwellings to accommodate the wide range of households choosing to live within the City. 5.2 Policies 5.2.1 Encourage the integration of appropriately scaled, special-use housing into developments or neighborhoods of conventional housing. 5.2.2 Encourage mixed-use residential/commercial projects to include live-work and work- live units where housing, offices or other commercial uses are compatible. 5.2.3 Encourage the development of housing above ground-level retail stores and offices to provide housing opportunities close to activity centers and to use land efficiently. 5.2.4 In general, housing developments of twenty (20) or more units should provide a variety of dwelling types, sizes or forms of tenure. 5.3 Program 5.3.1 Review new developments for compliance with City regulations and revise projects or establish conditions of approval as needed to implement the housing variety and tenure policies. Goal 6.1 Housing Production. Construct new housing to meet the full range of community housing needs and to achieve the City's Quantified Objectives. 6.2 Policies 6.2.1 Consistent with the growth management portion of its Land Use Element and the availability of adequate resources, the City will plan to accommodate up to 2,909 dwelling units between January 2001 and July 2008. Cal Poly University intends to provide up to 1,178 housing units on State land during the planning period. 6.2.2 New commercial developments in the Downtown Core (C-D Zone) shall include housing, unless the City makes one of the following findings: 32 ian Luis Obispo City Council Draft Housing Element,January 27,2004 ❑ Housing is likely to jeopardize the health, safety or welfare of residents or employees; ❑ The property's shape, size, topography or other physical factor makes dwellings infeasible. 6.2.3 Provide incentives to encourage additional housing in the Downtown Core, particularly in mixed-use developments. Incentives may include flexible density, use, height, or parking provisions, fee reductions, and streamlined development review and permit processing. 6.2.4 If City services must be rationed to new development, residential projects will be given priority over non-residential projects. 6.2.5 City costs of providing services to housing development will be minimized. Other than for existing housing programs encouraging housing affordable to very-low and low income persons, the City will not make new housing more affordable by shifting costs to existing residents. 6.2.6 Relax open space requirements in Expansion Areas in return for the provision of additional affordable housing units beyond the minimum requirements, provided that such open space is not for the specific purpose of protecting geographic features like hillsides,wetlands,biological resources and creeks. 6.3 Programs 6.3.1 Amend the General Pian and Residential Growth Management Regulations (SLOMC 17.88) to exempt all new housing in the C-D zone, and new housing in other zones that is affordable to very low-, low- and moderate- income households, pursuant to the Affordable Housing Standards. In expansion areas, the overall number of units built must conform to the city-approved phasing plan. 6.3.2 Amend the Zoning Regulations to allow flexible parking regulations for housing development, especially in the Downtown Planning Area, including the possibility of reduced or no parking requirements where appropriate guarantees limit occupancies to persons without motor vehicles or who use alternative transportation. 6.3.3 Amend the Parking Management program to promote housing in the Downtown Core by allowing flexible use of city parking facilities by Downtown residents, where appropriate. Such use may include requirements for parking use fees, use limitations and enforcement provisions. 6.3.4 Specific plans for designated Expansion Areas shall include appropriately zoned land 33 San Luis Obispo City Council Draft Housing Element,January 27,2004 to meet the City's regional housing need for dwellings affordable to very low- and low-income households, including R-3 and R-4 zoning. These plans shall include sites suitable for subsidized rental housing and affordable rental and owner-occupied units. Such sites shall be integrated within neighborhoods of market-rate housing and shall be architecturally compatible with the neighborhood. 6.3.5 Specific plans should designate sufficient areas at appropriate densities to accommodate the types of dwellings that would be affordable in the percentages called for by this Element. Also, specific plans will include programs to assure that the affordable dwellings actually will be produced. 6.3.6 Initiate amendments to the General Plan and rezone commercial, manufacturing or public facility zoned areas for residential use, to promote higher-density, infill or mixed-use housing where appropriate. For example, areas to be considered for possible rezoning include, but are not limited to the following sites (shown in Figure 1): a) Little Italy district and portions of Broad Street corridor b) Mid-Higuera corridor, between Fontana Avenue and Prado Road c) 791/861 Orcutt Road d) Both sides of Ferrini Road, between Cerro Romauldo and Felton Way e) 3730 South Higuera Street f) 1642 Johnson Avenue and 1499 San Luis Drive (rezone vacant and underutilized school district property) g) 1030 Southwood Drive 6.3.7 Support regional efforts to establish a countywide affordable housing fund to be funded through a countywide, dedicated revenue source rather than diverting existing affordable housing trust funds. The City should manage its Affordable Housing funds generated through the Inclusionary Housing Program to assist affordable housing development in the City. 6.3.8 Adopt flexible zoning and subdivision standards to be applied to development in return for the provision of affordable housing unit or mixed-uses. Such flexible standards could include floor area ratios modified for a specific site, reduced lot sizes, reduced setback requirements, increased building height, or increased lot coverage, and should allow planned developments of less than 1 acre where otherwise allowed. 6.3.9 Balance City efforts to encourage residential development by focusing as much on infill development and densification within City Limits as on annexation of new residential land. The City will accomplish this by considering amendment to the General Plan and Zoning Regulations to rezone residential areas to encourage infill and densification, where appropriate. 34 an Luis Obispo City Council Draft Housing Element,January 27,2001 Figure 1 Areas to be Considered for Possible Rezoning `Y d a } f t a V 35 San Luis Obispo City Council Draft Housing Element,January 27,2004 6.3.10 Seek opportunities with other public agencies and public utilities to identify, assemble, develop, redevelop and recycle surplus land, for housing, and to convert vacant or underutilized public, utility or institutional buildings to housing. 6.3.11 Develop multi-family housing design standards to promote innovative, attractive, and well-integrated higher-density housing. Developments that meet these standards shall be eligible for a streamlined level of planning and development review. Developments that include a significant commitment to affordable housing may also be eligible to receive density bonuses, parking reductions and other development incentives, including City financial assistance. 6.3.12 Financially assist in the development of 90 new ownership or rental units affordable to very-low, low- and moderate-income households during the planning period using State,Federal and local funding sources. 6.3.13 Actively seek new revenue sources, including State, Federal and private/non-profit sources, and financing mechanisms to assist affordable housing development and first-time homebuyer assistance programs. 6.3.14 Exempt the construction, relocation, rehabilitation or remodeling of up to four residential units from Architectural Review Commission review. New multi-unit housing may be allowed with."Minor or Incidental' or staff level architectural review, unless the units are located on a sensitive or historically significant site. 6.3.15 Promote the development or rehabilitation of housing as part of large buildings in the Downtown Core. 6.3.16 Initiate amendments to the Zoning Regulations to increase residential density limits in the Downtown Core(C-D Zone). 6.3.17 Assist in the production of long-term affordable housing by identifying vacant or underutilized City-owned property suitable for housing, and dedicate public property, where feasible and appropriate,for such purposes. Goal 7.1 Neighborhood Quality. Maintain, preserve and enhance the quality of neighborhoods, encourage neighborhood stability, and improve neighborhood appearance and function by applying "New Urbanist" design principles to new developments. 7.2 Policies 7.2.1 Within established neighborhoods, new residential development shall be of a character, size, density and quality that preserves the neighborhood character and 36 I an Luis Obispo City Council Draft Housing Element,January 27,2004 maintains the quality of life for existing and future residents. 7.2.2 Higher density housing should maintain high quality standards for unit design, privacy, security, on-site amenities, and public and private open space. Such standards should be flexible enough to allow innovative design solutions in special circumstances, e.g. in developing mixed-use developments or in housing in the Downtown Core. 7.2.3 Within established neighborhoods, infill housing should be located on appropriate sites,but not on sites designated in the General Plan for parks or open space. 7.2.4 Within expansion areas, new residential development should be an integral part of an existing neighborhood or should establish a new neighborhood, with pedestrian and bicycle linkages that provide direct, convenient and safe access to adjacent neighborhoods, schools and shopping areas. 7.2.5 The creation of walled-off residential enclaves, or of separate, unconnected tracts, is discouraged because physical separations prevent the formation of safe, walkable, and enjoyable neighborhoods. 7.2.6 Housing shall be designed to enhance safety along neighborhood streets and in other public and semi-public areas. 7.2.7 Neighborhood layout and house designs should promote walking and bicycling, and should preserve open spaces and views. 7.2.8 High-Occupancy Residential Use Regulations should be amended as necessary to achieve General Plan housing objectives, preserve neighborhood livability and reduce parking conflicts. 73 Programs 7.3.1 Implement varied strategies to ensure residents are aware of and able to participate in planning decisions affecting their neighborhoods early in the planning process. 7.3.2 Identify specific neighborhood needs, problems, trends and opportunities for improvements. Work directly with neighborhood groups and individuals to address concerns. 7.3.3 Help fund neighborhood improvements, including sidewalks, traffic calming devices, crosswalks, parkways, street trees and street lighting to improve the aesthetics, safety and accessibility within neighborhoods. 37 San Luis Obispo City Council Draft Housing Element,January 27,2004 7.3.4 Residential development should promote defensible space and walkable, socially- interactive neighborhoods. Design measures may include providing seating porches, balconies, view windows or similar features. 7.3.5 Continue to develop and implement neighborhood parking strategies, including parking districts,to address the lack of on- and off-street parking in residential areas. Goal 8.1 Special Housing Needs. Encourage the creation and maintenance of housing for those with special housing needs. 8.2 Policies 8.2.1 Encourage housing development that meets a variety of special needs, including large families, single parents, disabled persons, the elderly, students, the homeless, or those seeking congregate care, group housing, single-room occupancy or co-housing accommodations. 8.2.2 Preserve manufactured housing parks and support changes in this form of tenure only if such changes provide residents with greater long-term security or comparable housing in terms of quality, cost, and livability. 8.2.3 Encourage manufactured homes in Expansion Areas by: a) Encouraging developers to create owner-occupied manufactured home parks with amenities such as greenbelts, recreation facilities, and shopping services within a master planned community setting. Such parks could be specifically designed to help address the needs of those with mobility and transportation limitations. b) Establish lot sizes, setback, and parking guidelines that allow for relatively dense placement of manufactured homes within the master planned neighborhood. c) Locate manufactured home parks near public transit facilities or provide public transportation services to the manufactured home parks to minimize the need for residents to own automobiles. 8.2.4 Encourage Cal Poly University and Cuesta College to continue to strengthen student and faculty housing programs to lessen pressure on City housing supply and transportation systems to meet both existing and future needs, consistent with the Cal Poly Student Housing Needs Study recommendations. 8.2.5 Strengthen the role of on-campus housing by encouraging Cal Poly University to require entering freshmen students to live on campus during their first year. 38 an Luis Obispo City Council Draft Housing Element,January 27,2004 .2.6 Fraternities and sororities should be located on the Cal Poly University campus. Until that is possible, they should be located in Medium-High and High Density residential zones. .2.7 Special-needs living facilities should be dispersed throughout the City rather than concentrated in oneAistrict. 3 Programs .3.1 As funding allows, support local and regional solutions to meeting the needs of the homeless and continue to support, jointly with other agencies, shelters for the homeless and for displaced women and children. 0.2 Continue the mobile home rent stabilization program to minimize increases in the cost of mobile home park rents. 1.3.3 Identify sites in specified expansion areas suitable for tenant-owned mobile-home parks, cooperative housing, manufactured housing or other types of housing that meet special needs. 3.3.4 Advocate developing non-dormitory housing on the Cal Poly University campus and refurbishing existing campus housing and its associated programs to make campus living more attractive and affordable. 9.3.5 Work with Cal Poly University Administration to secure designation of on-campus fraternity/sorority living groups. 8.3.6 Jointly develop and adopt a student housing plan and "good neighbor program" with Cal Poly University, Cuesta College and City residents. The program would seek to improve communication and cooperation between the City and the schools, set student housing objectives and establish clear, effective standards for student housing in residential neighborhoods. Goal 9.1 Sustainable Housing, Site, and Neighborhood Design. As part of its overall commitment to quality of life for its citizens, and to maintaining environmental quality, the City encourages housing that is resource-conserving, healthful, economical to live in, environmentally benign, and recyclable when demolished. 9.2 Policies 9.2.1 Residential developments should promote sustainability in their design, placement, and use. Sustainability can be promoted through a variety of housing strategies, 39 San Luis Obispo City Council Draft Housing Element,January 27,2004 including the following: a) Maximize use of renewable, recycled-content, and recycled materials, and minimize use of building materials that require high levels of energy to produce or that cause significant, adverse environmental impacts. b)Incorporate renewable energy features into new homes, including passive solar design, solar hot water, solar power, and natural ventilation and cooling. c)Minimize thermal island effects through reduction of heat-absorbing pavement and increased tree shading. d)Avoid building materials that may contribute to health problems through the release of gasses or glass fibers into indoor air. e)Design dwellings for quiet, indoors and out,for both the mental and physical health of residents. f)Design dwellings economical to live in because of reduced utility bills, low cost maintenance and operation, and improved occupant health. g)Use construction materials and methods that maximize the recyclability of a building's parts. h) Educate public, staff, and builders to the advantages and approaches to sustainable design, and thereby develop consumer demand for sustainable housing. i) City will consider adopting a sustainable development rating system, such as the T program- 9.2.IZ, rogram.9.2.fL Residential site, subdivision, and neighborhood designs should be coordinated to make residential sustainability work. Some ways to do this include: a) Design subdivisions to maximize solar access for each dwelling. b) Design sites so residents have usable outdoor space with access to both sun and shade. c) Adopt street and access way standards that reduce the amount of impermeable surface devoted to vehicular use. d) Use neighborhood retention basins to purify street runoff prior to its entering creeks. Such basins should be designed to be attractive, visual and functional 40 San Luis Obispo City Council Draft Housing Element,January 27,2004 amenities in the dry season. Unsightly, fenced-off retention basins should be avoided. e) Encourage cluster development with dwellings grouped around significantly- sized, shared open space in return for City approval of smaller individual lots. f) Use landscape buffers to separate neighborhoods of all densities from heavily trafficked streets and highways. 9.2.2 Preserve the physical neighborhood qualities in the Downtown Core that contribute to sustainability. Some ways to do this include: a) Maintain the overall scale, density and architectural character of older neighborhoods surrounding the Downtown Core, thereby preserving close-in living environments appealing to people who choose to live close to their jobs. b) Encourage the maintenance and rehabilitation of historic housing stock. 9.2.3 To promote energy conservation and a cleaner environment, encourage the development of dwellings with energy-efficient designs, utilizing passive and active solar features, and the use of energy-saving techniques that exceed minimums prescribed by State law. 9.2.4 Actively promote water conservation to lessen the need for capital-intensive water source development, which could considerably increase the cost of housing. 93 Programs 9.3.1 Educate planning and building staff and citizen review bodies on energy conservation issues, including the City's energy conservation policies and instruct that they work with applicants to achieve the housing goals that conserve energy. 9:3.2 Revise the Energy Conservation Element to address residential energy conservation for both new and existing dwellings. Disseminate this information to the public. 9.3.3 Evaluate present solar siting and access regulations to determine if they provide assurance of long-term solar access for new or remodeled housing and for adjacent properties, and revise regulations found to be inadequate. Goal 10.1 Local Preference. Maximize affordable housing opportunities for those who live or work in San Luis Obispo while seeking to balance job growth and housing supply. 41 San Luis Obispo City Council Draft Housing Element,January 27,2004 10.2 Policies 10.2.1 Administer City housing programs and benefits, such as First Time Homebuyer assistance or affordable housing lotteries, to give preference to persons living or working in the City or within the City's Urban Reserve, and to persons living in San Luis Obispo County. 10.2.2 Cal Poly State University and Cuesta College should actively work with the City and community organizations to create positive environments around the Cal Poly Campus by: a) Establishing standards for appropriate student densities in neighborhoods near Campus; b) Promoting homeownership for academic faculty and staff in Low-Density Residential neighborhoods near Campus; and c) Encouraging and participating in the revitalization of degraded neighborhoods. 103 Programs 10.3.1 Work with the County of San Luis Obispo to mitigate housing impacts on the City due to significant expansion of employment in the unincorporated areas adjacent to the City. Such mitigation might include, for example, County participation and support for Inclusionary Housing Programs. 10.3.2 Encourage residential .developers to promote their projects within the San Luis Obispo housing market area(San Luis Obispo County) first. 10.3.3 Advocate the establishment of a link between enrollment growth and the expansion of campus housing programs at Cal Poly University and Cuesta College to reduce pressure on the City's housing supply. 10.3.4 Advocate that further expansion of State institutions such as the California Men's Colony should include adequate provisions by the State for providing additional housing for new employees. Goal 11.1 Suitability. Develop and retain housing on sites that are suitable for that purpose. 11.2 Policies 11.2.1 Where property is equally suited for commercial or residential uses, give preference to residential use. Changes in land use designation from residential to non-residential will be discouraged. 42 ian Luis Obispo City Council Draft Housing Element,January 27,2004 11.2.2 Prevent new housing development on sites that should be preserved as dedicated open space or parks, on sites subject to natural hazards such as unmitigatable geological or flood risks, or wild fire dangers, and on sites subject to unacceptable levels of man-made hazards or nuisances,including severe soil contamination, airport noise or hazards, traffic noise or hazards, odors or incompatible neighboring uses. 11.3 Program 11.3.1 The City will adopt measures ensuring the ability of legal, conforming non- residential uses to continue where new housing is proposed on adjacent or nearby sites. 3.40 Implementation Tools k variety of Federal, State and local programs and resources are available to help implement the 2ity's housing goals and activities. These include both financial resources, as well as in-kind ncentives that help address housing needs. Table 3 lists the available resources, incentives and 3ther tools that can help address housing needs. Table 3 Resources/Incentives Available For Housm* Activities Program Descri tion Eli ible:Activities Local Resources :ity of San Luis Obispo Affordable In-lieu fees paid by developers to Any expense in support of Housing Fund meet inclusionary housing affordable housing development, requirements. subject to City Council approval and adopted criteria(Res.No.9263, 2001 Series). Development Services Fee Waiver; Residential development projects a Affordable housing projects that meet. City affordable housing a Mixed-use developments with standards for very low- and low- affordable units income households are exempt from a Senior housing projects all planning, engineering and building review, processing and permit fees, water and sewer meter hook-up fees. Projects with a combination of market-rate and affordable units receive the waiver on aper-unit basis. [mpact Fee Waivers Citywide development impact fees a Affordable housing projects are waived for affordable residential a Mixed-use developments with units that: 1) exceed the minimum affordable units required under inclusionary housing o Senior housing projects standards, or 2) are built,owned and 43 San Luis Obispo City Council Draft Housing Element,January 27,2004 managed by the San Luis Obispo Housing Authority,other government agencies, or not-for-profit housing agencies. Density Bonus The City allows an increase in . Affordable housing residential density of at least 25%for projects development projects that reserve at a Mixed-use developments least 20% of the units for low, or with affordable units moderately affordable housing; or . Senior housing projects 10% of the units for very low income; or at least 50% of the units for qualifying seniors. Alternative Incentives When developers agree to construct • Affordable housing very low-, low-, moderate-income or projects senior housing, the City may a Mixed-use developments negotiate an alternative incentive of with affordable units comparable value to the density • Senior housing projects bonus, such as exceptions to development standards, direct financial assistance, or city installation of offsite improvements. Flexible Development Standards A variety of flexible development • Affordable housing standards is available for affordable projects and senior housing, and for the a Mixed-use developments preservation and rehabilitation of with affordable units historic homes and apartments. a Senior housing projects These include easing of parking • Historic homes and standards and building setbacks, apartments height and lot coverage exceptions • Planned residential (with approval of Planned developments Development rezoning), and . Non-conforming residential provisions for restoring non- restoration conforming residential buildings following a fire or other disaster. Grants-In-Aid Funds Grants-In-Aid funds are available a Not-for-profit-social service annually to assist social service and and housing providers housing providers with special, non- recurring costs to augment affordable housing programs. Mills Act Program Reduces property taxes on historic a Historic preservation residential and commercial a Residential rehabilitation properties in return for owner's a Mixed-use historic agreement to preserve, and in some rehabilitation cases,improve the property. Minimum 10 years' participation; up to 10 properties can be added to the program per year. Technical Assistance Technical assistance is available to a Affordable housing help renters, homeowners, housing developments developers, and not-for-profit a Market-rate housing housing developers find,design,fund developments 44 n Luis Obispo City Council Draft Housing Element,January 27,2004 or build affordable housing. • Housingconsumers _ Sta_te:Resources ulti-Family Housing Revenue Cooperate with non-profit housing • Affordable housing projects )nds providers to enable issuance of • Mixed-use developments with multi-family housing revenue bonds affordable units e Senior housing projects ortgage Credit Certificate Federal tax credit for low- and • First-time homebuyer's moderate-income homebuyers who assistance have not owned a home in the past three years. �oposition 46 Funds $2.1 billion bond measure adopted o Affordable housing projects by California voters in 2002 • Mixed-use developments with establishes various housing grants affordable units and loans for affordable housing. a Senior housing projects • Special needs housing [obile Home Park Conversion Funds awarded to mobile-home park • Mobile-home park acquisition rogram tenant organizations to convert and development mobile-home parks to resident ownership. alHFA — California Housing HELP Program and other below- a Low- and moderate-income inance Agency market-rate financing and deferred affordable single- and multi- loans for affordable housing family housing development. aHLIF — California Housing Loan Provides primary mortgage insurance a First-time homebuyers rsurance Fund for hard-to-qualify borrowers, a Low- and moderate- income expanding home ownership homebuyers opportunities. • Workforce housing loans :IEDB — California Infrastructure Provides low-cost financing for • Cities nd Economic Development Bank public infrastructure to support a Private sector housing and economic development. • Non-profits .ow-Income Housing Tax Credit Tax credits available to individuals e Acquisition and corporations investing in low- a Housing rehabilitation income rental housing. Tax credits a New construction are issued through the State and sold to corporations and others with high tax liability, with proceeds used for housing development. Federal Resources Entitlement �ommunity Development Block Grant awarded to the City annually • Section 108 Loan Payments ;wants(CDBG) on a formula basis to fund housing a Historic preservation and economic development for low- a Property acquisition for and moderate-income persons. housing • Housing rehabilitation • Public services and facilities e Code enforcement e Fair housing activities • Economic development HOME Investment Partnership Grant program specifically for a Single-ormold-familyhousin 45 pan Luis Obispo City Council Draft Housing Element,January 27,2004 HOME)Program housing. Designed as partnership acquisition/rehab/construction funding,requires local match funding a CHDO Assistance and one of the best sources of new a Administration housingfundin . Emergency Shelter Grants Grant awarded on an annual formula a Homelessness prevention basis for shelter and services to a Continuum of care homeless persons. • Operating expenses lousing Opportunities for Persons Funds available county-wide for a Rental assistance Vith AIDS(HOPWA) supportive services and housing for a Social services persons with HIV/AIDS. • Housing iistoric Rehabilitation Tax Credit Provides a 10-20%one-time;IRS tax • Rental housing rehabilitation credit on eligible rehabilitation costs a Mixed-use projects for pre-1936 and National Register • Seismic strengthening historic properties. Work must • Ownership housing ineligible follow Secretary of the Interior rehabilitation standards. FedeYW,ReS0urces- Com etitipe_ _ )upportive Housing Grant Grant to improve quality of existing • Housing rehabilitation shelters and transitional housing.. lection 8 Rental Assistance Very-low income families, • Rental assistance for very low individuals, seniors and the disabled, income, elderly and disabled pay 30%of their income toward rent. persons The SLO Housing Authority pays the balance of rent payment. lection 202 Grants to non-profit housing • Acquisition and Rehabilitation developers for supportive housing a New construction for the elderly. . Rental assistance • Support services lection 811 Grants to non-profit developers for a Acquisition supportive housing for disabled a Rehabilitation persons, including group homes, . New construction intermediate-care facilities and a Rental assistance independent-living facilities. Section 108 Provides loan guarantee to CDBG • Acquisition entitlement jurisdictions, enabling o Rehabilitation them to borrow up to five times their o New construction annual entitlement for major housing • Infrastructure or capital improvement projects. o Historic preservation • Economic development Source: City of San Luis Obispo,Community Development Department 46 ;an Luis Obispo City Council Draft Housing Element,January 27,20(X ;hilnteR 4 auanti flee oBjectives 1.10 Overview hate housing law requires that each jurisdiction identify the number of housing units that will be )wilt, rehabilitated and preserved during the Housing Element's planning period. These )rojections are termed "quantified objectives." Quantified housing objectives allow the ,ommunity to evaluate its progress toward meeting key housing needs to help prioritize planning ind funding efforts. They are based on the City's regional housing needs allocation and the Housing Needs Assessment, and are adopted policy. However, San Luis Obispo cannot guarantee these objectives will be met, given limited financial resources, costs to provide public Facilities to serve new development, and the growing, statewide gap between housing costs and incomes. Meeting the City's quantified housing objectives will depend, in part, upon real estate market forces, developers' and lenders' financial decisions and the availability of local, State and Federal funding. 4.20 New Housing Construction Completed Table 4 shows the number of new housing units completed between January 1, 2001 and December 31, 2003. Dwellings completed during this period are credited toward meeting the City's quantified objectives during the seven-and-one-half-year planning period from January 1, 2001 to July 1, 2008. Table 4 Housing Units Completed January 2001 throu December 2003 - Above Unit Type: _--_ .: V Low _Low Moderate. Moderate_ .. Total ._ Single-family 0 0 46 334 380 Multi-famil19 70 185 203 477 TOTALS' 19 70 231 537 857 Source: City of San Luis Obispo,Community Development Department Includes 201 on-campus apartments at Cal Poly State University 47 San Luis Obispo City Council Draft Housing Element,January 27,2004 4.30 New Housing Construction Objectives Table 5 shows the new housing construction objectives for January 1, 2004 through June 30, 2008. It includes all types of housing, both rental and for-sale units, and these are added to the completed housing units from Table 4 to meet the City's quantified housing needs for new construction. Table 5 New Housing Construction Objectives Jan 2004 to July 2008 Above UnitType Very Low Low_ Moderate_ Moderate Sin a-famil 20 283 234 226 1,291 Multi-family 1,351 424 352 340 1,939 Subtotal 1,371 707 586 566 3,230 Units Completed, 1/1/01 thru 12/31/03 19 70 231 537 857 TOTAL 1,390 T77 817 1,103 4,087 Assigned RHNA 1,484 844 870 1,185 4,383 Source: City of San Luis Obispo,Community Development Department 'Given the deep subsidies needed to construct very-low income single-family units, most housing for very-low income expected to be multi-family units. New housing construction objectives include 977 units of student and faculty housing to be developed by the Cal Poly University Foundation,, in addition to 201 apartments developed on campus in 2003. The objectives are based on an assumed construction ratio of single family to multi-family housing of 40:60, and a percent distribution of housing for income groups which is similar to that of the City's RHNA number: Very-low — 34%, Low— 19%, Moderate—20%, and Above Moderate -27%. A reduced objective was set for Very-Low, Single-Family construction given the high cost and deep subsidies needed for this type of housing. To meet this income need, it is likely that virtually all of the units will be higher density, multi-family rental housing. 4.40 Preservation of At-Risk Units Dwellings built with some form of government assistance or subsidy typically must remain affordable to very low-, low- or moderate-income households fora specific period. As the end of the affordability tern nears, an affordable unit is said to be at-risk of conversion to market-rate housing. There are several reasons why government-assisted housing might convert to market- rate housing, including expiring subsidies, mortgage prepayments, or most commonly, expiration of affordability and resale restrictions. A 30-year affordability requirement is common; however, the term varies depending upon the source and terms of funding. 48 an Luis Obispo City Council Draft Housing Element,January 27,2004 tate law requires jurisdictions to identify government-assisted, multi-family housing that is at isk of converting to market rate during the next 10 years. These include units receiving funding nder a variety of government programs, such as HUD Section 8, HUD Section 202, IRS Section 2 (Tax Credit projects), Federal Community Development Block Grants and local programs sing inclusionary housing requirements, in-lieu fees and density bonuses. In addition, urisdictions also must describe measures to prevent at-risk from converting to market rate. Wed on information provided by the City's Housing Authority, local non-profit housing iroviders, and the State Housing and Community Development Department, there are no very- ow or low-income units at risk of losing their affordability restrictions and converting to market ate between January 2001 and January 2011. Nevertheless, Housing Element programs 2.3.12 and 3.3.8, and quantified objectives have been incorporated into the Housing Element to help preserve these affordable units. These programs will establish a monitoring and early warning system to track affordable housing units at-risk of being converted to market rate housing within" ubsequent planning periods (after 2008); and with the Housing Authority of the City of San Luis Obispo and other local housing agencies, provide ongoing technical assistance and education to enants, property owners and the community at large on the need to preserve at-risk units as well is the tools available to help do so. LSO Rehabilitation and Preservation Objectives The City's existing affordable housing stock is a valuable resource that should be preserved and, where necessary and feasible, rehabilitated rather than demolished. By enforcing City building and zoning codes, the safety, quality and durability of existing homes and neighborhoods is ,nhanced, thus maintaining the housing stock's diversity in type, tenure and cost. Often, the primary beneficiaries of preservation and rehabilitation programs are renters and low-income homeowners. Table 6 lists the number of units to be rehabilitated, preserved or financially assisted, and the number of conservation/code enforcement cases during the planning period. . Table 6 Rehabilitation, Preservation, and Conservation Objectives January 2001 to July2008 Very LoW_1 Low Wderate - I Total REHABELITATION • Single-family rehab 10 7 3 20 • Multi-family rehab 30 20 -- 50 • Historic preservation 10 5 5 20 rehab PRESERVATION • At-risk units preserved n/a n/a n/a n/a 49 San Luis Obispo City Council Draft Housing Element,January 27,2004 CONSERVATION/CODE ENFORCEMENT • Code enforcement cases 1 150 1 50 1 25 7 225 FINANCIAL ASSISTANCE • 1st-time homebuyer 0 25 25 50 proms • Affordable housing fund 50 1 25 25 100 Source: City of San Luis Obispo,Community Development Department 4.60 Quantified Objectives Summary During the Housing Element's seven and one-half year planning period from January 2001 to July 2008,policies and programs will accommodate a net increase of up to 4,087 dwellings. This goal is based on anticipated water supplies and land available and suitable for residential use. The objectives seek to develop housing that meets affordability standards for the income groups in the same proportion as the RHNA allocation,.and to emphasize the production of multi-family, higher density housing, where appropriate. A key component is new housing to be developed by Cal Poly University on and adjacent to the campus on State land, using University Foundation funding. Table 7 Quantified Ob'ectives S92001 - 2008 Incoime Level New _ Rehabilitation Financial Conservaton2 . Constructioni._ _ Assistance Very Low 1,390 50 50 150 Low 777 32 50 50 Moderate 817 8 50 25 Above Moderate 1,103 -- -- -- Totals 4,087 90 150 225 Source: City of San Luis Obispo,Community Development Department Includes 1,178 dwellings developed on State land for Cal Poly University students,faculty and staff 2Not included in summary totals. Although the quantified objectives are theoretically achievable, they are not specific development quotas. The City of San Luis Obispo intends to use the financial, planning and administrative resources at its disposal to accomplish the objectives, but cannot guarantee that these construction goals will be achieved given limited financial resources, economic uncertainty, independent marketing decisions regarding housing development, and the present gap between 50 n Luis Obispo City Council Draft Housing Element,January 27,2004 Busing cost and incomes. Satisfaction of the quantified objectives will hinge largely upon ivate development decisions and the City's ability to leverage additional Federal, State or local nding to meet very-low, low- and moderate income housing needs. 51 n Luis Obispo City Council Draft Housing Element,January 27,2004 1ppendix A :omuaunity Profile p understand San Luis Obispo's housing needs, an overall profile of the community is essential. ;atistical information provided in this appendix, derived mainly from the 2000 Census, forms e basis for the goals, policies and programs in Chapter 3, and for establishing quantified )using objectives in Chapter 4, as required by State law. Social, economic and housing iaracteristcs are analyzed to determine how these factors affect housing needs, costs and ✓ailability. Population Trends and Characteristics an Luis Obispo is one of seven cities located within San Luis Obispo County, and is the largest c terms of population. As shown in Table A-1, the City's estimated population is 44,359 ,alifornia Department of Finance,January 2003). In January 2003, about 17 percent of County ;sidents lived in the City of San Luis Obispo. Between 1990 and 2000, the City grew by 2,216 ersons, an increase of five percent. As the result of a nationwide economic slowdown in the arly 1990s, San Luis Obispo's population growth rate declined significantly, mirroring county nd Statewide trends. During the 1990s, city population growth stabilized at an average annual rowth of 0.5 percent, while County and State population growth rates slowed to an annual verage of about 1.4 percent. City growth rates in the 1980s slightly exceeded the targeted two percent, and fell below the one percent growth rate anticipated for the 1990s and beyond. 3etween 2000 and 2003, State population estimates (California Department of Finance) show the '-ity's population increasing by 1,332 persons, an average annual growth of about one percent. knalysis of U.S. Census data and Department of Finance population estimates indicates that copulation growth in the City primarily has been due to net migration to the housing market area. Che General Plan Land Use Element (LUE) includes policies to accommodate an eventual City copulation of 57,700. At a one percent annual average growth rate, the City's anticipated residential capacity would be reached by the year 2022. wring the 1980s, the City's annual population growth rate averaged a little over two percent, while the job growth rate was about three percent. During the same period the County's population grew by about 3.5 percent annually, while the job growth rate averaged about 3.8 percent. In 1991, the City population was stable or declined slightly, while the overall County population increased about two percent. San Luis Obispo Council of Governments projections show the County's population as a whole growing at a little more than one percent annually between 1990 and 2020. State officials predict that the State's population will grow by almost 30 million new residents, averaging about 1.65 52 San Luis Obispo City Council Draft Housing Element,January 27,2004 percent population growth annually from 2000 to 2020. Federal officials estimate an annual average growth rate of about 0.9 percent nationwide during the same period. Table A-1 Population Growth, 1980 2000 San Luis Obispo City, County and State of California . 1980" 1990 Change 2000 Change Population Population 1980-1990 Population 1990-2000 No.of " % No.of %. ersons persons cit, 34,252 41,958 7,706 22 44,174 2,216 5 Count, 155,435 217,162 61,727 40 246,681 29,519 14 State 1 23,770,855 29,760,021 5,989,166 25 33,871,648 4,111,627 14 Source: U.S.Census 2000 The slowdown in City population growth that began in the early 1990s continued into the firs three years of the new decade. Economic factors at the national and State levels slowed job an( population growth in many areas, including San Luis Obispo. In addition, lower costs of lanc and development in north and south San Luis Obispo County areas compared with the City o San Luis Obispo and beach communities contributed to higher population growth rates in thosi areas. As part of its regional planning functions, the San Luis Obispo Council of Government (SLOCOG) develops and publishes regional population, employment and housing forecasts Table A-2 shows the projections for city, county and State populations from 2000 to 2008. Sae Luis Obispo City's population growth rate is expected to peak in 2006-2007, and then to stabilize at a slowly declining rate until build out, anticipated in 2022. 53 San Luis Obispo City Council Draft Housing Element,January 27,2004 Table A-2 Population Projections, 2001 2008 San Luis Obispo City, County and State of California Projected Population 2001 2002 2003 2004 2005. 2006 2007 2008 Annual Orowth City 43,008 43,438 43,872 44,311 44,754 45,202 , 45,654 46,110 Lo County 253,399 256,946 260,543 264,191 267,890 271,640 275,443 279,299 1.4 State 35,078.9 35,667.2 36 276.2 36,874.9 37,4715 38,030.9 .38,588.3 1 39,145.7 1.3 (X1000) Source: San Luis Obispo Council of Governments,U.S.Census and California State Department of Finance a)Age Composition San Luis Obispo's age profile is shown in Tables A-3 and A-4. When compared with the County and State, San Luis Obispo has significantly lower percentages of teens and children, and adults in the primary childbearing years of 25-44. The City's percentage of seniors 60 years or older is slightly smaller than in the County, but reflects the State's overall percentage for this age group. Due to the concentration of young adults attending Cuesta College and Cal State Polytechnic University, San Luis Obispo's component of young adults ages 20 — 24 is almost three times larger than the county as a whole, and almost four times larger than this age group's percentage of the State's total population. As discussed in Appendix B, this demographic trend has important implications for the San Luis Obispo area housing market in terms of demand, housing type and tenure, and demand. Students comprise an increasingly larger proportion of City residents, while the percentage of middle age, "prime working age" persons in the City has declined since 1990. 54 San Luis Obispo City Council Draft Housing,Element,January 27,2004 Table A-3 Age Distribution, 2000 San Luis Obispo City, County and California State Age Categories in years,by Percent of Total Population Under 20 26-44 25 44 45;49 60 or Older City 22 26 24 14 14 County 26 9 27 19 19 State 30 7 32 17 14 Source: U.S.Census 2000 Another measure of City age dynamics is reflected in the pre-primary school enrollment figures for 1990 and 2000. Table A-4 shows the population over three years of age and enrolled in either . pre-school or kindergarten. The percentage of the total population enrolled in pre-primary school was stable in San Luis Obispo City between 1990 and 2000, while the County and State showed small increases during this period. The local school distract has experienced an overall decrease in school enrollment for Kindergarten through grade 12 during this decade. Table A-4 Pre-Primary School Enrollment, San Luis Obispo City, County and California State, 1990 and 2000 Jurisdiction Percent of Total Population over three years and enrolled in Pre-School�or Kindergarten 1990 " 2M. City 3 4 County 6 8 State 6 11 Source: U.S.Census 2000 b) Race and Ethnicity As shown in Table A-5, San Luis Obispo City and County are less diverse racially and ethnically than the State as a whole. Most San Luis Obispo residents are white and of non-Hispanic origin; however, the ethnic composition of both the City and County is slowly changing. Since the 1990 Census, the County's Hispanic population grew from about 17 percent of the white population to about 22 percent of the white population. The Hispanic population is projected to be the fastest 55 San Luis Obispo City Council Draft Housing Element,January 27,2004 growing ethnic group in this decade. Table A-6 shows projected County population by race or ethnicity for 2001 through 2010. The Hispanic population is not distributed evenly throughout the County. In 2002, the percentage of Hispanic or Latino persons ranged from a low of less than seven percent in the City of Pismo Beach, to the highest percentage of 88 percent in the unincorporated town of Oceano. Just under 12 percent of San Luis Obispo City's population is estimated to be of Hispanic or T atino origin (2003 UCSB Economic Forecast Project, San Luis Obispo County Outlook). Table A-5 Racial and Ethnic Composition, City and County of San Luis Obispo, State of California, 2000 Percentage of Total Population Racial/Ethnic White Black Native Asian Pacific Other two or Group American Islander more City 84 1.5 0.6 5.3 0.1 4.8 3.7 County 84.6 2 0.9 2.7 0.1 6.2 3.5 State 59.5 6.7 1 10.9 0.3 16.8 4.8 Source: U.S.Census 2000 Table A-6 Projected Change in Racial and Ethnic Composition by Percent, 2001-2010 San Luis Obis o County Year Total White Black Native Asian/Pacific Hispanic' American Islander No. of % of No. of % of No. of % of No. of % of No. of Persons total Persons total Persons total Persons Total Persons % 2001 262,123 208,693 79.6 5,309 0.02 1,741 <.01 7,807 0.03 38,573 14.7 2002 269,272 213,855 79.4 5,461 0.02 1,757 <.01 8,155 0.03 40,044 14.8 2003 276,438 218,995 79.2 5,615 0.02 1,777 <.01 8,502 0.03 41,549 15 56 San Luis Obispo City Council Draft Housing Element,January 27,2004 2004 283,400 224,001 79 5,752 0.20 1,796 <.01 8,828 0.03 43,023 15. 2005 290,076 228,924 78.9 5,922 0.20 1,809 <.01 9,074 0.03 44,347 1 2006 296,834 233,781 78.7 61110 0.20 1,820 <01 9,338 0.03 45,785 1 2007 303,806 238,657 78.5 6,269 0.20 1,834 <01 9,642 0.03 47,404 2008 1 310,878 243,609 78.3 6,445 0.20 1,856 <.01 9,940 0.03 49,028 2009 317,827 248,376 78.1 6,602 0.20 1,880 <.O1 10,236 0.03 50,733 2010 324,741 253,097 77.9 6,770 0.20 1,888 <01 10,527 0.03 52,459 1 Source: California Department of Finance *Persons of Hispanic origin may be of any race 2. Employment Trends Due to its centralized location, early settlement history and transportation links via the Southern Pacific Railroad and State Highways 101, 1 and 227, San Luis Obispo historically has served as the County's governmental, retail and cultural hub. City and County economies historically were based largely on agricultural activities. As shown in Table A-7, professional and managerial occupations accounted for 39 percent of San Luis Obispo's jobs in 2000, followed by sales and office jobs, and services with about 29 and 20 percent of the total jobs,respectively. Retail sales, tourism, education, government, and design and technology businesses are also important drivers of San Luis Obispo's economy. Table A-7 Occu ations of San Luis Obis o City, Countyand State Residents, 2000 City County State Occupation Category # % # % # Management, professional and related 8,595 39 37,581 34.3 5,295,069 36 occupations Service occupations 4,354 19.7 20,573 18.8 2,173,874 14.8 Sales and office occupations 6,315 28.6 27,793 25.3 3,939,383 26.8 Farming, fishing and forestry 191 0.9 2,281 2.1 196,695 1.3 57 San Luis Obispo City Council Draft Housing Element,January 27,2004 Construction, extraction and 1,2203 5.5 10,732 9.8 1,239,160 8.4 maintenance Production,transportation,material 1,399 6.3 10,709 9.8 1,874,747 12.7 moving Total Employed civilian population 22,057 100 109,669 100 14,718,928 100 16 years and older' Source: U.S.Census 2000. 'Numbers may not total 100% due to rounding. The City's total work force (civilian employed persons 16 years or older) was estimated at 22,057 in the 2000 Census. In 1990, the total workforce was 21,067, reflecting an increase of 990 persons, or 4.6 percent, during the decade. San Luis O_bispo's economy is relatively stable, owing to the large number of public sector employees, and private sector employers that receive government funds in the City and nearby unincorporated County, including the County of San Luis Obispo, California State Polytechnic University, Cuesta College, California State Department of Forestry, California Department of Transportation, California Army National Guard, San Luis Coastal Unified School District and the City of San Luis Obispo. Large private sector employers include P.G.&E., Cal Poly Foundation, Sierra Vista Regional Medical Center, French Hospital,Economic Opportunity Commission and Madonna Inn. Unemployment, a common measure of economic health, has declined in San Luis Obispo County since 1993, reflecting robust, sustained job growth in the County and City of San Luis Obispo. Nevertheless, the area's economy is not immune from State and national economic forces. Due to a national economic slowdown, countywide job growth declined from 2001 to 2003 in all sectors except agriculture, and large city employers downsized, reducing their workforces by over 1,000 employees in 2002. In summary, the City's economy is expected to remain strong with slow, steady job growth and low unemployment. However, personal income in the 2000s is expected to grow more slowly than in the previous decade (UCSB Economic Forecast Project, 2003 San Luis Obispo County Economic Outlook). 3. Household Characteristics Household formation and characteristics are key factors shaping housing need. Following is an analysis of household size, growth, income, tenure and household trends. By definition, a "household" consists of all the people occupying a dwelling unit, whether or not they are related. For example, a single person living in an apartment, four students living in an apartment, and a couple with two children and an unrelated tenant living in the same dwelling are all considered households. a) Household Formation and Type As shown in Table A-8, the 1990 Census identified 16,952 occupied housing units in the City of 58 San Luis Obispo City Council Draft Housing Element,January 27,2004 San Luis Obispo compared with 18,653 in 2000, an increase of 10 percent. It is interesting to note that while the number of households increased during this period, average household size declined by almost three percent, as shown in Table A-9, bucking the county and State trends of slightly increasing density. In part, this may be due to the fact that very few multi-family dwellings were built during the 1990s, and multi-family housing typically has a higher average number of persons per household than does detached or attached single family housing. Table A-8 Number of Households, 1990 — 2000 San Luis Obispo City, C ty and State of California No.of No.of Change- Households hangeHouseholds in Households in 1990 2000 city 16,952 18,653 1,701 10 Com 80,281 92,739 12,458 El .5State 10,381,206 11,502,870 1,121,664 .8 Source: U.S.Census, 1990 and 2000 The declining household size is another reflection of the aging of the City's residents and the relatively high cost of housing. As homeowners age and become "empty nesters", they often cannot afford to "shift down" and buy smaller housing that better meets their needs and budget. In San Luis Obispo, it is not uncommon for a three- and four-bedroom house to be occupied by one or two persons. As average households grow smaller, the existing housing stock accommodates fewer people, further exacerbating housing needs, particularly for families and large households. Table A-9 Household Size, 1990 —2000 San Luis Obispo City, C nty and State of California Average No.of Average No.of Change persons per persons per household in household in April 1990 January 2000 City 2.388 2.322 -0.066 -2.8 County 2.533 2.547 0.014 0.55 State 2.794 2.875 0.081 2.89 Source: California Department of Finance and U.S.Census 2000 59 San Luis Obispo City Council Draft Housing Element,January 27,2004 Changes in household types clearly reflect community transformation since 1990. As shown'in Table A-10, the percentage of City households occupied by single persons has grown by almost 18 percent, while during the same period, the percent of households with married couples or families has decreased by about 11 percent. The number of single parent households and non- family households with two or more persons has remained relatively unchanged. The City has about twice as many non-family households with two or more persons as the County, and almost three times as many as that number in California as a whole. This ratio reflects the City's high concentration of student households and the difficulty faced by many couples and families in finding affordable housing in San Luis Obispo. Table A-10 Households by Type, Percent of Total Households 1990 —2000 San Luis Ob' o C!!Z, Coun!j and State of California Household Type,Percent of Total 1 Person. Change Single with Change .Non-fandly,2 or Change 'Married- Change dependents more -copples, fames:_ 1990. 2000.' __ 96_ 1990 2000 % _. . . _1990 _ _2000 . . % 1990 2000 city 28 33 17.8 10 10 0 27 26 -3.7 35 31 -11.4 ECoun 24 26 8.3 12 13 8.3 11 11 0 53 50 -6 State 23 24 4.3 16 17 6.3 8 8 0 53 51 -3.8 Source: U.S.Census 2000. Percentages may not total 100%due to rounding. b) Household Income The U.S. Census differentiates between a "household" and a "family." As used here, the tetra "family" means two or more related persons living together as a unit. This may include single parents, children and extended family members (e.g., grandparents). A "household" includes unrelated persons (e.g., single persons, roommates, and unmarried persons who live together), as well as households falling under the "family" definition. Table A-11 shows U.S. Census figures for median household and family incomes in the City, San Luis Obispo County, State and other selected California counties. Despite significant growth in personal income in the last decade, San Luis Obispo City and County median household incomes continue to lag behind other Central Coast counties and the Los Angeles area. Moreover, Household and family income growth has not kept pace with rapidly escalating 60 San Luis Obispo City Council Draft Housing Element,January 27,2004 housing costs. This disparity between income and housing costs helps explain why San Luis Obispo frequently ranks among the most expensive housing markets in the nation. Table A-11 Median Household and Family Incomes, 1989 and 1999 San Luis Obispo City, County, State of California and selected California Counties* Median Median Change Median Median Change in Household Household in Income Family Family Income Income, Income, Income, Income, 1989 1999 1989 1999 ($) ($) ($) % ($) ($) ($) % City 25,982 31,926 5,944 23 39,769 56,319 16,550 42 County Of 31,164 42,428 11,264 36 37,086 52,447 15,361 41 S.L.O. Santa 35,677 46,677 11,000 31 41,289 54,042 12,753 31 Barbara County Monterey 33,520 48,305 14,785 44 36,223 51,169 14,946 41 County Los 34,965 42,189 7,229 21 39,038 46,452 7,414 19 Angeles County California 35,798 47,493 11,695 33 40,559 53,025 12,466 31 Source: U.S.Census, 19990 and 2000 *Figures for a four-person family or household. San Luis Obispo City households tend to have lower incomes and pay a larger portion of their income for mortgages or rent than San Luis Obispo County residents as a whole. Moreover, median household incomes in the City have grown more slowly since 1989, relative to median household incomes in the County. In 1989, the City's median household income was $25,982, or about 83 percent of the countywide median. In 1999, the City's median household income was $31,926,or about 75 percent of the County median household income. Another income measure is per capita income, as shown in Table A-12. In 1989, the per capita income in the City was $14,760, compared with a per capita income in the County of$15,237. For the same year, the per capita income for California residents as a whole was $16,409. 61 San Luis Obispo City Council Draft Housing Element,January 27,2004 Table A-12 Per Capita Incomes, 1989 and 1999 San Luis Obispo City, Coun and State of California Per Capita Income, Per Capita Income, Change ($) 1989 City 14,760 20,386 5,626 38 County 15,237 21,864 6,627 43 State 16,409 22,711 6,302 38 Source: U.S.Census, 1990 and 2000 The State of California defines four income categories for the purposes of determining housing affordability and need in communities. These categories are as shown in Table A-13. This method is consistent with definitions of very low-, low- and moderate-income households as used in some Federal and most State housing programs; however, HUD (U.S. Department of Housing and Urban Development) applies different standards for Community Development Block Grant, Section 202 and other Federal grant programs. Table A-13 State Income Categories Income Category %.of County Median Income Very Low Income 50% or Less Low Income 51% to 80 % Moderate 81% to 120% Above Moderate 121% or Higher Source: California State Department of Housing and Community Development Between 1989 and 1999, household incomes in San Luis Obispo increased significantly, following trends at both regional and statewide levels. Table A-14 shows the estimated number of households in the City of San Luis Obispo within each of the State income categories. The table indicates that in 2000, over one-third of the City's household fell into the low- and very low-income categories, while over one-half of the households were in the above-moderate category, with annual incomes of over $57,600. Only 10 percent of the City's households fell into the moderate category, probably reflecting the difficulty of finding affordable housing for 62 San Luis Obispo City Council Draft Housing Element,January 27,2004 sale to this income group. Table A-14 Households by State Income Categories, 1999 San Luis Obispo City Income Categories #of Households % of Total Households Very Low (<$24,001) 6,631 29 Low ($24,001-38,400) 1,154 6 Moderate ($38,401-57,600) 1,789 10 Above Moderate ($57,600+) 9,082 55 Total 18,656 100 Source: Extrapolation from 2000 Census for Income,All Households,and 2000 City Affordable Housing Standards. Table A-15 compares the City, County and State by the numbers of households below poverty level by type. Household "poverty threshold" is a measure established by the Federal government that takes into account family size, number of persons under 18 years old and income. For example, the poverty threshold in 1999 for a single person was $8,500, for a couple was $10,869, and for a family of four was $17,184. Poverty thresholds are not adjusted for regional, State or local variations in the cost of living or earnings. Very-low and low-income households often require subsidies, combined with below-market rates or sales prices, to afford housing in relatively high-cost areas such as San Luis Obispo. Table A-15 Households Below Poverty Level by Household Type, 1999 Married Male Female Non-Family Total' Couple Households Households Families #of % #of % #of % #of % #of % persons persons persons persons persons City 213 4.7 78 1.7 264 5.8 3,974 87.7 4,529 100 2N=18,656 County 2000 18.2 399 3.6 1,592 14.5 6,955 63.5 10,946 100 N=92,732 State 407,637 1 29.9 88,216 6.4 350,138 25.7 514,293 37.8 1,360,284 100 N=11,512,020 Source: U.S.Census,2000. Totals may not add to 100%due to rounding. 1 Universe: households in 1999 with income below poverty level. 2"N'refers to the total number of households by jurisdiction. 63 San Luis Obispo City Council Draft Housing Element,January 27,2004 According to the 2000 Census, the percentage of City households with incomes below the poverty threshold is about twice that of the County or the State. In 1999 about 24 percent of the City's households had incomes below the Federal poverty threshold, compared with about 12 percent for both the County and the State. Non-family households comprise about 88 percent of the City's households below the poverty threshold, and of these, about 24 percent consisted of persons under 25 years of age, with households of persons 65 years or older making up about 26 percent of City households below the poverty threshold. 4. Housing Inventory and Market Factors a) Housing Stock Profile and Population Growth the last decade, the City's housing stock grew more slowly than the population. Both housing and population growth slowed markedly in the 1990s compared with the 1980s. The 1990 U.S. Census counted 17,877 housing units in the City, with a vacancy rate of 5.5 percent. By 2000 the City's housing stock grew to 19,340 units, with a vacancy rate of 3.6 percent, an increase of 1,463 units. This is a housing growth rate for the 1990s of just over eight percent, or an annual average of about 0.8 percent. By contrast, in the 1980s the housing stock grew by 3,500 units, an average annual increase of 350 dwellings, or 2.42 percent. Between 1990 and 2000, the City's population grew from 41,958 to 44,148, an average annual increase of 219 persons, or 0.52 percent. In the 1980s, the City added about 7,700 persons, an average annual increase of 770 persons, or 2.25 percent. 64 San Luis Obispo City Council Draft Housing Element,January 27,2004 Figure A-1 Housing and Population Growth, 1980-2010 City of San Luis Obispo 7.no 8.00 7.D00 I7 Housing Units Added i8000 C Persons Added { j 5.0004,000- . 3,500 3447 '9.852 3,000- 2,000- .0002 000 ! 1,40 r. 1.000 1980.1990 18902000 2000-2010 Source: U.S.Census 2000 and City of San Luis Obispo,Community Development Department 65 San Luis Obispo City Council Draft Housing Element,January 27,2004 Table A-16 shows the net change in the number of dwellings due to completed construction between 1995 and 2002, a period that cuts across a relatively strong housing development cycle in the late 1990s, followed by a marked economic slowdown by 2000. During this period, an average of 101 dwellings was built each year and 27 units were lost due to fire, demolition or conversion to another use. Multi-family dwellings accounted for about 14 percent of all new dwellings, compared with slightly over one-half of all new dwellings in the 1980s. This dramatic reduction in multi-family projects (apartments and condominiums) has exacerbated the City's shortage of affordable housing. Multi-family housing typically provides a wider variety of housing costs and types than detached, single family housing. Yet most of the City's new housing since 1995 has been single-family detached houses. Table A-16 Residential Development, 1995 - 2002 Net Chang_ a Due to Completed Construction (number=of dwellin S):. Single Family, Multi-family Total Annual Growth Rate' Year Market Rate Below Market Rates Below Non- for the year for three Market' Market' exempt years units 1995 50 0 -4 20 26 0.14% 1996 83 0 10 0 93 0.50% 1997 138 0 13 0 151 0.81% 0.48% 1998 132 0 10 0 142 0.76% 0.69% 19994 64 4 -9 0 55 0.29% 0.62% 2000 73 4 -14 41 14 0.07% 0.31% 2001 82 0 22 3 101 0.52% 0.29% 2002 69 0 25 0 94 0.48% 0.36% Total 691 8 53 64 744 n/a n/a Notes: 'Based on California Department of Finance figures for total number of dwellings at the beginning of the year. 'Under General Plan policy,very-low and low income units not included in Residential Growth Rate. 3Classification as to single-family or multi-family differs from previous reports,to conform to State and Federal housing- type definitions. °Not reflected in the 1999 numbers are about 24 existing dwellings,mostly single-family,that were annexed as part of the Fuller Road Area. Negative number indicates the demolition or relocation of a dwelling outside the City. Source: City of San Luis Obispo,Community Development Department 66 San Luis Obispo City Council Draft Housing Element,January 27,2004 b)Unit Type San Luis Obispo's existing housing stock includes a wide range of dwellings, including "Victorian-style," single-family houses near downtown, mobile home parks, duplexes, detached single-family housing, condominiums and large, high-density apartment complexes close to the Cal Poly University campus. Many of the City's older neighborhoods contain a mix .of single houses, houses with attached and detached secondary units, and small duplexes or triplexes. Table A-17 summarizes the composition of the City's housing stock for 1990 and 2000. Table A-17 Composition of Housing Stock by Unit Type, 1990 and 2000 City of San Luis Obis o 1990 2000 Unit Type #of Units.- % of Totaf A of Units Total Single-Family Detached 8,242 46 8,962 47 Single-Family Attached 1,123 6 1,210 6 Multi-Family(2-4 units) 2,227 12 2,347 12 Multi-Family(5+units) 4,755 27 4,821 26 Mobile Homes,Other 1,530 9 1,531 9 Total 17,877 100 18,871 100 Source: Department of Finance Population and Housing Estimates,April 1990 and January 2000 As shown in the table, about 53 percent of San Luis Obispo's housing stock is categorized as single-family, with 38 percent in the multi-family classification and nine percent consisting of mobile homes. The distribution of unit types changed little during the decade, with single-family detached homes showing a slight percentage increase. c) Unit Size Unit size is commonly described in terms of the number of bedrooms in a residence. Table A-18 summarizes the City's housing stock by number of bedrooms. Just over one-third of the City's housing stock consists of two-bedroom units, with studio/one-bedroom units and three- bedroom units each accounting for about one quarter of the total housing units. Four-bedroom and larger dwellings comprise about 13 percent of the housing stock. Under the City's Affordable Housing Standards, estimated occupancy is based on the number of bedrooms in a unit, as follows: 67 San Luis Obispo City Council Draft Housing Element,January 27,2004 • Studio unit: one-person household • One-bedroom unit: two-person household • Two-bedroom unit: three-person household • Three-bedroom unit: four- and five-person household • Four-bedroom unit: six-person household It is interesting to note that unit size shifts markedly from owner-occupied to renter-occupied housing. For example, the City's housing stock provides a sizeable proportion of housing units with three or more bedrooms to accommodate larger households. As shown in the table, however, most of these larger units are ownership units. Less than one quarter of the City's rental housing stock has three or more bedrooms. Due to the relatively small proportion of rental housing with three or four bedrooms and the high demand for student housing, it is very difficult for families with four or more persons to secure rental housing. According to the 2000 Census, the City has only 181 units with five or more bedrooms, or less than one percent of the housing stock. Table A-18 Number of Bedrooms by Tenure, 2000 Ci of San Luis Obispo Housing Size. 0 and 1 2 bedrooms 3 bedrooms 4+bedrooms, bedroom Tenure Total. #of % of #of' . % of #of % of #of. % of Units Total Units Total Units Total Units Total Owner- 7,795 410 5 2,386 31 3,481 45 1,518 19 occupied Renter- 10,858 4,420 41 3,942 36 1,586 15 910 8 occupied Total 18,653 4,830 26 6,328 34 5,067 27 2,428 13 Source: U.S.Census 2000 c) Tenure Tenure refers to whether householders rent or own their dwelling. Most city residents are renters. Almost 24,000 persons, or 56 percent of the population, rent in San Luis Obispo, a significantly higher proportion than in the County and State. The proportion of renters and homeowners has not changed significantly since 1990, even though most new constriction since 1990 has been single-family housing. This may be explained, in part, by increased density in city rental housing. As rents increase, higher density allows renters to hold individual rental costs down. Also, in many older neighborhoods, many single-family houses have been converted to 68 San Luis Obispo City Council Draft Housing Element,January 27,2004 rental housing due to the strong demand for available rentals. Such conversions improve the availability of rental housing, particularly for non-family households, but at the same time they reduce the availability of older, for-sale housing often sought by first time homebuyers, couples, and families. d) Vacancy Rates The housing vacancy rate is one measure of general housing availability. A low vacancy rate — ess than five percent, for example — suggests that households will have difficulty finding ousing within their price range. Conversely, a high vacancy rate may indicate either a high umber of housing units that are undesirable for occupancy, a high number of seasonal units, or oversupply of housing. By maintaining a "healthy" vacancy rate of between five and eight nt, housing consumers have a wider choice of housing types and prices to choose from. As acancy rates drop, shortages generally raise housing costs and limit choices. Since 1990, the City's vacancy rate has remained at just over five percent; however, in 2001- 2003, State Department of Finance figures show the rate dropped steeply to 3.46 percent. By comparison, during the same period the County of San Luis Obispo vacancy rate has hovered at around l 1 percent, dropping to about 9.3 percent during the first three years of the new decade. The City's consistently low vacancy rate reflects the high demand for rental housing near college campuses (Cuesta College and Cal Poly University). e) Age of Housing Stock Housing age is one measure of housing stock condition and the need for rehabilitation. Older units often do not meet current building or zoning standards, and.without proper maintenance, are more likely to need major repairs (e.g., new roof, plumbing and electrical repairs). Generally, dwellings over 30 years of age fall into this category, and for purposes of the Housing Element, the number of older dwellings is an indicator of the need for housing rehabilitation assistance. Table A-19 shows the age of the City's housing stock by tenure. Table A-19 Age of Housing Stock by Tenure, 2000 City of San Luis Obispo Tenure: Year Built #of Units % of Units* Rental Owner:-: Vacant Before 1940 2,193 11.3 1,292 783 118 1940-1949 1,045 5.4 676 361 8 1950-1959 2;587 13.3 1,330 1,187 70 69 San Luis Obispo City Council Draft Housing Element,January 27,2004 1960-1969 3,035 15.6 1,659 1,265 111 1970-1979 5,245 27.1 3,502 1,599 1980-1989 3,436 17.7 1,722 1,581 133 1990-1994 934 4.8 430 475 29 1995-1998 649 3.3 164 485 0 1999-March 216 1.1 83 59 74 2000 Totals 19,340 100 10,858 71795 687 Source: U.S.Census 2000. *Does not total 100%due to rounding. According to the 2000 Census, about 47 percent of the City's housing stock was built before 1970, and about 91 percent was built before 1990. By contrast, about 33 percent of the County's housing stock was built before 1970, and 83 percent of County housing was built prior to 1990.. Both jurisdictions reflect a slowdown of housing production in the 1990s. Despite its high proportion of pre-1970 housing, the City's housing stock generally appears to be in good condition. A City inventory of vacant, underutilized and blighted properties conducted in 2003 revealed approximately 44 residential properties with exterior signs of serious disrepair, building condition or safety problems. The inventory was in all neighborhoods of the city; however, it was limited to a visual inspection of the exterior street elevations and a portion of the side elevations of housing units. It is likely that the number of substandard or dilapidated housing units is much larger, based on the age of the housing stock. In terms of tenure by year of construction, Census data indicate that the City's older housing stock accounts for about 78 percent of the occupied rental housing. About 67 percent of the owner-occupied housing was built before 1980. g) Housing Condition Another measure of the City's housing stock is housing condition. Housing is considered substandard when conditions are below the minimum standards of living as defined by Section 1001 of the Uniform Housing Code. Households living in substandard housing may be exposed to health or safety threats, which, in turn, could adversely affect the safety and quality of life of neighborhoods. Such households are considered in need of housing assistance to correct any serious health or building safety problems, such as structural, plumbing, mechanical or electrical problems, and the presence of unhealthful conditions or materials, e.g. asbestos and lead-based paint. In addition to structural problems (sagging roofs, walls or porches, lack of or failing building 70 San Luis Obispo City Council Draft Housing Element,January 27,2004 foundation, termite infestation, etc.), the lack of certain basic facilities may also indicate substandard conditions. According to the 2000 Census, there were 56 units in the City that lacked complete plumbing facilities. Of these, 48 were renter occupied. For Census purposes, complete plumbing facilities included: (1) hot and cold piped water; (2) a flush toilet; and (3) a bathtub or shower. All three must be located inside a housing unit to be recognized as having full plumbing facilities. According to the Census; 307 units lacked complete kitchen facilities, and of these, 278 units were renter-occupied. There were 148 units with no heating source, and 122 units that relied on eating oil, kerosene,coal or wood for heating. ased on City inventory, Census information, code enforcement and the age of units, it is stimated that 2,000 multi-family dwellings are substandard and in need of major repair or habilitation, or about 18 percent of the City's multi-family housing. Additionally, 1,000 single- family dwellings are estimated to be substandard and in need of major repair or rehabilitation, comprising about 13 percent of the City's single-family housing stock. h) Sales Costs and Rents The cost of rental and owner-occupied housing is generally higher in San Luis Obispo than in most of the surrounding communities. The 2000 Census indicates the median gross rent in 2000 was $724, compared with $719 countywide, and $747 Statewide. Similarly, the median value for owner-occupied homes in the City was $278,000, compared with $230,000 countywide and $211,500 Statewide. Since 2000, rental and ownership housing costs have risen sharply. According to San.Ldis Obispo Multiple Listing Service data for the second quarter of 2003, the median-priced house in the City of San Luis Obispo costs $4427500, while in the County, the median-priced house costs $378,120. In the same quarter in 2000, these prices were $256,500 and$221,500, respectively. This shows a 75 percent increase in median home sales prices in San Luis Obispo in just three years. Table A-20 Single Family Housing Values, 2000* City and County of San Luis Obisj2o City County P-Hee Range($) #of Units . % ofTotal #=of Units Wof Total Less than 100,000 1,127 14.4 6,350 11.1 1009000— 199,999 1,307 16.7 18,898 33.1 200,000—2499999 1,388 17.8 8,751 15.3 250,000—299,999 1,309 16.7 7,217 12.6 71 San Luis Obispo City Council Draft Housing Element,January 27,2004 300,000-399,999 1,647 21.1 7,870 13.8 400,000-499,999 609 7.8 3,687 6.4 500,000-7499999 .333 4.2 2,580 4.5 750,000 or more 75 0.9 1,639 2.8 Totals 56,992 100 7,795 100 Median value $230,000 $278,000 Source: U.S.Census 2000. *For specified,owner-occupied housing Eldsting and New Housing Sales Price Trends Following a trend throughout much of California, and particularly the Central Coast of Californi (from Ventura County to San Luis Obispo County), San Luis Obispo City has experienced a steep increase in existing and new home prices since the late 1990s. During the early to mid- 1990s, housing costs in San Luis Obispo stabilized or showed a slight drop. A strong economy in the late 1990s pushed housing costs up, with increased employment, higher Cal Poly enrollment and greater housing demand. Since 2000, despite a nationwide economic slowdown, the local and regional housing demand remains strong, buoyed by record low mortgage interest rates and the San Luis Obispo area's attractiveness to retirees from both Southern and Northern California. In this decade, home sales prices are expected to continue to rise, although at a slower pace than in the period from 2000-2003. Table A-20 lists the values of owner-occupied housing in San Luis Obispo City and County in 2000 based on homeowners' Census responses. Almost half of the City's homes were valued at below $250,000,compared with about 60 percent of homes in the County. In 2003, home values and sales prices for attached and detached single family housing rose dramatically, making it difficult to find any housing for sale under $300,000. Although the total price of a home is an important indicator of affordability, the primary affordability determinant is the monthly payment. Lenders typically require homebuyers to demonstrate that the total monthly loan payment, consisting of loan principal, interest, taxes and insurance will not exceed 30 percent of gross monthly household income. Table A-21 compares the monthly median income and median housing costs in San Luis Obispo City, County and the State. As shown in Table-21, a mortgaged median-priced house would require a household to spend about one quarter of its income on housing costs, while renters of a median-priced unit would spend considerably more — about 41 percent of household income. Given that most city residents are renters, this suggests that overpayment for rental housing is common in San Luis Obispo. Ownership housing costs vary widely within the City, depending upon location, size, amenities, length of ownership, and condition. Census data indicate the most affordable areas in terms of housing value are Downtown, South Street and Laguna Lake areas. 72 ian Luis Obispo City Council Draft Housing Element,January 27,2004 Table A-21 Median Monthly Owner Cost and Median Gross Rent As a Percentage of household Income, 1999 Ci and County of San Luis Obispo, State of California Median Owner Cost,Percent of Household Median Renter Cost, Income Percent of Income Without With Mortgage Mortgage City 24.7 10 41.4 ounty 26.5 10 30.8 tate 25.3 10 27.7 Source: U.S.Census 2000 Rental Costs The 2000 Census reported that the median contract rent for all rental units in the City was $747 per month. Table A-22 shows the range of contract rents by unit type. Table A-22 Dwelling Units by Rent Cost and Number of Bedrooms, 2000 Cit of San Luis Obispo Range Studio 1-Bedroom 2-Bedroom 3+Bedrooms Total % of Total $0-$499 442 586 460 451 1,939 18.0 $500-$749 781 1,533 953 420 3,687 34.1 $750-$999 122 499 1,442 247 2,310 21.3 $1000 or 89 338 878 1,316 2,621 24.3 more No Cash 0 30 169 44 243 2.3 Rent Total 1,434 2,986 3,902 2,478 10,800 100% Source: U.S.Census 2000 Table A-22 shows that slightly over half of the rental units reported were in the $500 - $999 range, with the balance split between the higher and lower ranges. Table A-23 provides a 73 San Luis Obispo City Council Draft Housing Element,January 27,2004 snapshot of the range and average rents for a mix of rental housing types, including multi-family, detached and attached single-family units. Rental costs were derived from commercial rental property listings dated July 9, 2003, and included a total of 45 rental properties. Table A-23 Range and Average Rent Costs, July 2003 Cit of San Luis Obispo Studio 1 Bedoom 2-Bedroom 3-Bedro6m Range $600 - 675 $750 -$925 $925 -$1600 $1375 —$1950 Average $644 $838 $1,227 $1,706 Source: City of San Luis Obispo,Community Development Department Affordability Gap Analysis A disparity between monthly housing cost and monthly income is referred to as a housing affordability gap. Housing affordability is determined by its cost and by the occupant's income and other sources of purchasing power. All types of housing involve both initial or "move-in" costs and continuing costs, such as rent or mortgage payments and maintenance. Although there is no universally accepted definition of"affordability", it is sometimes described in terms of what portion of household income should be spent on housing. According to the U.S. Department of Housing and Urban.Development(HUD), the California Department of Housing and Community Development (HCD) and many lending institutions, households should spend no more than 30 percent (25 percent for very-low and low-income households) of their gross monthly income on housing. It is not uncommon, however,for households to spend more than 30 percent of monthly income for housing. The costs of home ownership and renting can be analyzed by comparing a household's ability to pay for housing, based on HUD's most current median income and current rent and sales costs. Table A-24 compares the percentages of households spending 30 percent or more of their monthly income on housing in the City, County and State. These figures indicate that renters pay a substantially larger share of their income for housing than do homeowners. Moreover, renters in San Luis Obispo City pay a larger share of their income for housing than do renters in the County or the State. 74 San Luis Obispo City Council Draft Housing Element,January 27,2004 Table A-24 Comparison of Housing Cost as a Percentage of Gross Monthly Income,1989 and 1999 San Luis Obispo City and County, State .Jurisdiction % owner-occupied households % renter-occupied _paying 30% or more of income 'households paying 30% for,housiitg _, or more for housing 1989 1999 __ .1989 1999 City 26.6 27.3 62.3 60.9 County 30.8 31.7 50.8 48.4 State 29.4 31.2 45.6 42.3 Source: 1990 and 2000 U. S.Census According to the 2000 U.S. Census, among the City's renter households earning $20,000 to $35,000 annually, 59 percent paid 30 percent or more of their income for housing. By comparison, 55 percent of similar households in the County and 54 percent Statewide paid 30 percent or more of their income for housing. Interestingly, Census shows the percentage of renter households spending more than 30 percent of their income on housing has declined at the State, County and City levels since 1989, while the percentage of homeowners paying over 30 percent of their income for housing has increased- This ncreasedThis may be due, in part, to improved economic conditions in the late 1990s that raised many renter household incomes faster than rents, allowing renters to purchase housing. Among homeowners, overpayment appears less prevalent but is still a factor affecting housing opportunities. Homeowner cost figures in Table A-24 tend to understate housing costs for many homeowners, however, because they include all ownership units, including those that are owned free and clear, or those with very low mortgage payments. For example, of City households earning $35,000 to $50,000 annually, 42 percent paid more than 30 percent of their income for housing. In the County,44 percent of households paid 30 percent or more of their annual income for housing. Statewide, the percentage increases to 47 percent. Table A-25 identifies the affordable rents and purchase prices by income category in July 2003, based on a 30 percent maximum housing cost as a percentage of annual income. For ownership housing, maximum affordable housing cost includes mortgage principal and interest payments and an assumed 1.25 percent cost for taxes and homeowners' insurance. A 10 percent down payment and 5.75% mortgage interest rate is assumed. In 2003, mortgage interest rates have 75 San Luis Obispo City Council Draft Housing Element,January 27,2004 reached record 30-year lows. As mortgage rates increase, the affordability gap will become more pronounced. Rental Units A comparison of the average rent costs in Table A-23 with the maximum affordable rent costs shown in Table A-25 indicates that in 2003, average rent for a studio apartment was affordable for a very-low income household, while average rent for a one-bedroom apartment was affordable for a low-income household. In both instances, however, the analysis assumes the renter is at the upper income limit and has sufficient resources to pay the typical first and last month's deposit. Moreover, the limited size of a studio unit (approximately 450 square feet) is suited to a two-person household at best. A very-low-income family or household of three or more persons is essentially "priced out" of San Luis Obispo's rental market, and a low-income family of four or more persons generally cannot afford suitable rental housing. The average two- and three-bedroom rental unit is affordable for moderate- and above-moderate income families and households. Table A-25 Maximum Affordable Rent and Purchase Price by Income Category, July 2003 City of San Luis Obispo Income Category Annual Income' Maximum Estimated Maximum Affordable Rent Affordable Purchase Payment2 Price Very Low L<50%) $17,301 - $28,850 $721 $108,037 Low (51 -80%) $28,851 - $46,150 $1,154 $172,896 Moderate (81 - 120%) $46,151 -$69,250 $1,731 $259,629 Above Moderate (>120%) >$69,251 >$1,731 >$259,629 Median $57,500 -- -- Based on HUD income limits for a four-person household,San Luis Obispo County,March 2003 2Calculated as 30%of income divided by 12 months. 3Assumes 10%down payment,a 5.75%mortgage interest rate, 1.25%taxes and insurance and 29%front ratio. Source: City of San Luis Obispo,Community Development Department Ownership Units According to the UCSB Economic Forecast Project and California Association of Realtors, the median selling price of a home in San Luis Obispo City in 2002 was $367,700, up 66 percent from the 1999 median sales price of $221,300. During the same period, the median sales prices of homes in San Luis Obispo County rose from $185,600 to $313,800 (69 percent), and the State home sales prices rose from $217,600 to $313,100 (44 percent). That rapid rise in home prices has continued in 2003, as mortgage interest rates have dropped to 30-year lows, expanding the 76 an Luis Obispo City Council Draft Housing Element,January 27,2004 iurchasing power of homebuyers and further contributing to housing demand. According to ocal realtors, a large number of homebuyers in San Luis Obispo are from outside San Luis )bispo, primarily Southern California and the San Francisco Bay Area. Retirees and so-called `baby boomers" nearing retirement age are attracted to the Central Coast and are buying homes and property with equity from selling properties in more urbanized areas. knother component of San Luis Obispo's strong housing market are the parents of Cal Poly niversity students who buy property initially to provide housing for their children as rental using, with possible future use as income property or for retirement. As a result, San Luissp bio's real estate market, perhaps more than ever before, is driven by demand and prices from tside the area. As home prices have risen with increased demand, overall job growth has been gnant or has declined since peaking in 1997, and on the average, County incomes have grown owly. For example, according to State figures, average salaries in San Luis Obispo County tween 2001 and 2002 grew by a mere 1.6 percent for all employment sectors. As a result, sidents have found it increasingly difficult to find affordable housing, even for what would be „onsidered "starter housing" or `fixer uppers." Those on fixed incomes cannot afford to "trade down" for smaller housing and allow recycling of these homes for families. Table A-25 indicates that only above-moderate income families and households can afford a median-priced home in the City, and suggests that housing ownership is out of reach for all but about 23 percent of San Luis Obispo households earning $75,000 or more per year. This is particularly true for first-time homebuyers, single-parent families, lower-income persons engaged in service or agricultural industries, and those on fixed incomes. 5. Summary and Conclusions Appendix A describes the demographic factors affecting San Luis Obispo's housing.market in 2003. They are: • Population and household growth. Population growth has slowed significantly since the 1980s. The City's population grew by about 7,700 persons during the 80s, or just over two percent per year. During the 1990s, the City added about 2,200 persons, at an average rate of half a percent annually. By 2008, the San Luis Obispo Council of Governments estimates a City population of 46,110, while the City General Plan anticipates a population of 50,446, with an average annual growth rate of about one percent. • Household size. The City's average household size declined slightly during the 1990s. The percentage of households occupied by single persons grew by almost 18 percent, while the percent of households with married couples or families decreased by about 11 percent. The number of single-parent and non-family households with two or more persons remained essentially unchanged. 77 San Luis Obispo City Council Draft Housing Element,January 27,2004 • Household income. Despite significant growth in personal income during the last decade, San Luis Obispo City and County median household incomes continue to lag behind other Central Coast counties and large urban areas to the north and south. In 1999, 24 percent of City households had incomes below poverty level — about twice that of the City and State. • Age distribution. Compared with the County and State, San Luis Obispo has significantly lower percentages of teens and children, and adults in the primary childbearing years of 254. Persons 60 years or older comprise a slightly smaller percentage of the City's population than in the County, but reflect the State's overall percentage for this age group. The City's percentage of young adults ages 20 - 24 is almost three times larger than the county as a whole, and almost four times larger than this age group's percentag of the State's total population. During the 1990s,pre-school and kindergarten enrollmen was stable, while overall elementary school enrollment declined. • Ethnicity. About 16 percent of City and County of San Luis Obispo residents are non- white,compared with about 40 percent of the State's population. • Employment. Unemployment has declined in San Luis Obispo County since 1993. However, job growth slowed from 2001 to 2003 in all employment sectors except agriculture. Large city employers downsized, reducing their workforces by over 1,000 employees in 2002. The City's economy is expected to continue to remain strong in the decade, however, with slow, steady job growth and low unemployment, but personal income is expected to grow more slowly in the 2000s than in the previous decade. • Housine Unit Size. Just over one-third of the City's housing stock consists of two- bedroom units, with studio/one-bedroom units and three-bedroom units each accounting for about one quarter. of the total housing units. Four-bedroom and larger dwellings comprise about 13 percent of the housing stock. It is interesting to note that unit size shifts markedly from owner-occupied to renter-occupied housing. • Housing Affordability. Many people who live in San Luis Obispo overpay for housing, and many who work here cannot afford to live here. This is particularly true for first-time homebuyers, single-parent families, and lower income persons engaged in service or agricultural industries. For example, a very low-income family or household of three or more persons is essentially "priced out" of San Luis Obispo's rental housing market, and a low-income family of four or more persons generally cannot afford rental housing with two or more bedrooms. The average two- and three-bedroom rental unit is affordable for moderate- and above-moderate income families and households. Only above- moderate income families and households can afford a median-priced home in the City, suggesting that ownership housing is out of reach for all but about 23 percent of San Luis Obispo households earning$75,000 or more per year. 78 San Luis Obispo City Council Draft Housing Element,January 27,2014 Appendix B Mousing Needs Appendix B describes housing needs relative to various segments of the population, including groups with special housing needs. Several factors will shape the type and amount of housing demand or "need" in San Luis Obispo. The main factors driving housing need during the tanning period are: • Population and job growth, both in the City and.in the County; • Increased rate of household formation due to smaller households; • Inability of very low-, low- and moderate-income working adults to find suitable affordable housing near jobs; • Growth of special needs groups such as the elderly, single-parent households, households with disabled persons, and the homeless. Analysis of the City's demographic factors suggests that while all but above-moderate income households will continue to have difficulty finding suitable affordable housing, the largest gap between housing supply and need will be for low and moderate-income working people. First- time homebuyers' assistance and incentives for multi-family housing will be critical tools in addressing these needs. 1. Regional Housing Needs Assessment Under State law, each city and county is to develop programs designed to meet its share of the region's housing needs for all income groups, as determined by the region's council of governments. The State Department of Housing and Community Development (HCD) identifies housing needs for all regions of the State. Councils of governments then apportion the regional housing need among their member jurisdictions. The Regional Housing Needs Allocation (RHNA) process seeks to ensure that each jurisdiction accept responsibility, within its physical and financial capability to do so, for the housing needs of its residents and for those people who might reasonably be expected to move there. State housing law recognizes that housing need allocations are goals that jurisdictions seek to achieve; however, they. are not intended as production quotas. The allocations are included in each jurisdiction's Housing Element so that plans, policies and standards may be created to help meet housing needs within the Housing Element's planning term. a) Existing Housing Needs That part of the RHNA process concerned with existing housing needs includes two subcategories: overpayment and overcrowding. 79 San Luis Obispo City Council Draft Housing Element,January 27,2004 Households Overpaying for Housing Overpayment refers to households paying more than 30 percent of their gross income to secure adequate shelter. It is most common among very low- and low-income households, although in high-cost housing markets such as San Luis Obispo, even moderate- and above-moderate income households often pay more than 30 percent of their incomes to secure adequate housing. However, high housing costs impact lower-income households most acutely because lower- and fixed-income households must use a disproportionately higher percentage of their incomes for housing and typically have the least financial flexibility. For these individuals, the eventual result may be a series of financial problems leading to housing deterioration, as limited fun must be used for more immediate needs, or the result may be an entire loss of housing. For the community, it could mean overcrowding as households seek to maximize income to mee housing costs, a visible decline in housing conditions and appearance, neighborhood parkin shortages and other related problems. Overpayment for rental housing has been a continuing problem in San Luis Obispo. The 1990 Census indicated that in 1989, 62 percent of renter households paid more than 30 percent of their income for housing, while 20 percent of owner households paid more than 30 percent. Countywide, very low- and low-income households also have a higher incidence of overpaying for housing, with many paying more than one-half of their incomes for housing, a level referred to by HUD a"severe cost burden." Census 2000 indicates that in 1999, 61 percent of the City's 10,858 renter households, or about 6,600 households, overpaid for housing. The figures also show that of the City's 4,243 homeowners with home mortgages, 37 percent, or 1,550 households, overpaid for housing. This translates into an estimated 8,150 San Luis Obispo households paying more than 30 percent of their gross income for housing. For some, overpaying is a choice to secure housing of a certain type, location or quality. For many others, it is a necessity to meet basic housing needs. However, in San Luis Obispo, overpayment figures may be misleading. On one hand, the percentage of households overpaying may significantly understate the problem, since high housing costs force many to seek affordable housing outside the City. Those unable to afford any housing in San Luis Obispo are not reflected in the figures. Conversely, the numbers may overstate the problem in that many San Luis Obispo renters are students. Most student households, including families headed by students, are nominally in the lower income categories but have buying power due to parental support, loans or savings that is not reflected in their current income levels. Nevertheless, rising housing costs and relatively slow income growth are well documented, affirming that overpayment is a serious and ongoing problem in San Luis Obispo. Overcrowdina High housing prices often force lower-income households to accept smaller housing units, 80 San Luis Obispo City Council Draft Housing Element,January 27,2004 resulting in overcrowding. Overcrowding can have serious housing and neighborhood consequences. It places additional demands on housing facilities, neighborhood parking, community infrastructure and services, and can eventually contribute to deterioration of the housing stock and the neighborhood. The U.S. Census defines an overcrowded unit as one occupied by 1.01 persons or more per room (excluding bathrooms). Historically, overcrowding has not been a problem in San Luis Obispo. The 1990 Census figures showed that City and County overcrowding rates for renter-occupied units were both relatively low compared with statewide figures-- 10 and 11 percent, respectively, compared with 20 percent Statewide. Only one percent of the City's owner-occupied units were overcrowded, compared with three percent in the County of San Luis Obispo and six percent Statewide. Table B-1 compares overcrowding figures for the City and County of San Luis Obispo and the State of California in 2000. Census data indicate that the percentages of overcrowded rental units in the City and County have declined since 1990, from 10 and 11 percent to 7.5 and 10.1, respectively. City and County figures for overcrowding remain relatively low compared to the State. In San Luis Obispo, among the 10,858 renter households in 2000, an estimated 814 households were overcrowded For owner-occupied housing, San Luis Obispo has significantly fewer people per room than either the County or State, with almost 99 percent of households averaging one person or fewer per room. About 100 of the City's 7,795 owner-occupied households were overcrowded. Table B-1 Residential Overcrowding in the City and County of San Luis Obispo, and State of Califo 2000 _ Percent of all renter-occupied housing. Percent of all owner occupied units,by number of occupants per housing units,by number°of room _occu is er room 1.00 person 1.01- 1.50 1.51 1.00 person -A1- 1:50 1.51 or.fewer_._ rsons + or fewer persons+` City 92.6 3.3 4.2 98.7 0.6 0.7 County 89.9 4.8 5.3 97.1 1.5 1.3 State 76.1 8.5 15.4 91.4 4.3 4.3 Source: U.S.Census 2000 Another measure of residential overcrowding is the number of persons per occupied housing unit, or average household size. In 1990, the U.S. Census showed an average of 2.39 persons per occupied rental housing unit in the City of San Luis Obispo, compared with 2.53 and 2.79 in the County and State, respectively. According to Census 2000, average household size in the City 81 San Luis Obispo City Council Draft Housing Element,January 27,2004 declined slightly from 1990 levels. Table B-2 compares average household size between the City, County and State in 2000. Table B-2 Average Household Size by Tenure, in the City and County of San Luis Obis o, and State of California 2000 Renter-Occupied _ Owner-Occupied . Average - city 2.19 persons 2.37 2.27 County 2.41 2.55 2.49 State 2.78 2.95 2.87 Source: U.S.Census 2000 Overcrowding has been a concern due to students or other groups of unrelated adults sharing housing in low- and medium-density (R-1 and R-2) residential neighborhoods. Concerns centered on the fact that most detached houses in R-1 and R-2 neighborhoods were not designed to accommodate groups of adults, and that high occupancies can adversely affect persons living under crowded conditions, reduce neighborhood parking, contribute to noise and privacy conflicts, and can result in an overall reduction in the quality of life for City residents. In response to these concerns, the City Council adopted an ordinance in February of 1990 that requires households with six or more adult occupants in the R-1 and R-2 zones to secure approval of an administrative use permit and meet standards related to parking, floor space per individual, and number of bathrooms. b) Housing Needs for 2001—2008 In San Luis Obispo County, the San Luis Obispo County Council of Governments (SLOCOG) is charged with allocating the region's assigned housing needs among seven cities and the unincorporated County areas. The numbers supplied by the State's Department of Housing and Community Development (HCD) are "goal numbers" and are not intended as production quotas. State law recognizes that a jurisdiction's ability to meet regional housing needs within the planning period may be constrained by several factors. Government Code Section 65583 States: ..It is recognized that the total housing needs identified pursuant to subdivision(a)(i.e., through the Regional Housing Needs Allocation, or RHNA process) may exceed available resources and the community's ability to satisfy this need within the content of the general plan requirements outlined in Government Code Sections 65300-65307. Under these circumstances, the quantified objectives need not be identical to the total housing needs." Jurisdictions must accommodate the RHNA numbers in their Housing Elements or explain why their quantified housing objectives differ and identify actions the jurisdiction will take to remove constraints to achieving the RHNA number. These numbers apply to the planning term from January 2001 to July 2008. Each jurisdiction's total need is broken down by income group. These needs are then included in each jurisdiction's housing element as residential growth 82 San Luis Obispo City Council Draft Housing Element,January 27,2004 "targets" for which the jurisdiction tailors its plans, policies and standards to be accomplished within the planning tercet. On January 8, 2003, the San Luis Obispo Council of Governments approved San Luis Obispo County's Regional Housing Needs Plan incorporating the State's Department of Housing and Community Development (HCD) housing need determination of 18,035 new units for the SLOCOG region. The Regional Housing Needs Plan was approved by HCD on March 11, 2003. The approved Regional Housing Needs Plan is shown.in Table B-3. Table B-3 Regional Housing Needs Plan For the County of San Luis Obispo January 2001 - J!& 2008 HOusin Need Allocation Very Low Low Moderate Above Income Income .-Income Moderate: _ Totals** Units T %* Units % Units 9c" , Units ` °10 Units Arroyo 310 26 223 19 259 22 400 134 1,192 6.6 Grande Atascadero 345 25 254 19 304 22 L5634 1,359 7.5 Grover 178 26 142 21 166 24 29 686 3.8 Beach Morro Bay 185 31 122 20 129 22 27 599 3.3 Paso Robles 627 28 467 21 520 23 .29 2,266 12.6 Pismo 150 28 102 19 105 20 174 33 531 2.9 Beach San Luis :1,484 34 844. 19 870 20 1,185 : 27 " 4,383 24.3' Ob' . . Unincor- 1,029 18 778 11 929 13 4,283 61 7,019 38.9 orated Co I 1 _ Totals 4,308 2,932 3,282 -- 7,513 - 18,035 100 Source: San Luis Obispo Council of Governments *Percent of jurisdiction's total units **Percent of total County housing need. Total may not equal 100%due to rounding. A jurisdiction's housing need allocation is the number of additional dwellings necessary to accommodate expected growth in the number of households, and to: I) replace expected demolitions and conversions to non-residential use, 2) achieve an ideal vacancy rate (five to eight percent) that allows adequate housing choice, and 3) avoid concentrating lower-income housing in areas that already have disproportionately high proportions of lower income households. Total housing need is broken down by household income categories used in State and Federal 83 San Luis Obispo City Council Draft Housing Element,January 27,2004 programs: very-low, low, moderate, and above-moderate income. As shown in Table B-3, San Luis Obispo's allocation is 4,383 dwellings, almost one quarter of the County's total housing need allocation. 2. Special Housing Needs Certain segments of the population may have more difficulty finding decent, affordable housing due to their specific circumstances. In San Luis Obispo, this may include elderly persons, large families, female-headed households, the disabled, homeless and farm workers a) Elderly Persons Census 2000 shows that the City's proportion of seniors continues to increase. In 1980 the percentage of City residents 65 years of age or older was 11.-5, and by 1990 that figure increased to 12.2 percent. In 2000, 12.3 percent, or roughly 5,400 city residents, were 65 year of age or older,compared with 14.5 percent in the County and 10.5 percent Statewide. Elderly persons may need regular medical care, special residential access features, home medical equipment or trained medical care, transportation and opportunities to socialize. Those with moderate- or above-moderate incomes can usually afford to accommodate those needs. However, many elderly citizens have fixed or low incomes and do not own a home. They must compete for rentals with other small households that may have greater financial resources, or may have the potential for greater income in the future. Those low-income, elderly people who do own homes may have difficulty affording property maintenance costs, or meeting special accessibility or mobility needs such as ramps, handrails, door widths, counters and cupboard height and design. Due to limited mobility or health issues, elderly people may have a more difficult time meeting their personal needs, such as shopping, health or other errands, making their housing locations especially important. According to Census figures, 1,152 elderly San Luis. Obispo residents — almost a quarter of city residents age 65 or older — have physical disabilities, self-care or mobility limitations. Table B-4 Elderly Mobility and Disability Status, 2000 City of San Luis Obispo Disability_ % of Total % of Total and bility Statim Male. Pea of ersons.>65Persons _ . _ . ears of Totals - Total #of 2,041 39.9 3,079 60.1 5,120 (100%) persons >65 ears of age Physical 187 3.6 253 4.9 440 (8.5%) disability 84 San Luis Obispo City Council Draft Housing Element,January 27,2004 only Mobility 89 1.7 128 2.5 217 (4.2%) limitation only Self-care 0 0 0 0 0 limitation only two or more 167 3.3 328 6.4 495 (9.7%) limitations, including self-care limitations Totals 443 8.6 709 13.8 1,152 (22.4%) Source: U.S.Census 2000 Elderly residents who own their homes are in relatively good positions financially. Given the high cost of housing in the area, some could sell their homes for a profit and use it for a smaller apartment or condominium, or fora residential care facility if needed. However, seniors on fixed incomes with few assets have a more difficult time securing housing. Based on requests to the City's Housing Authority for housing affordable to the elderly, there is a clear need for more subsidized elderly housing in the City. With the aging of the so-called "baby-boom" generation born in the 1950s, and with longer life expectancies, the need for suitable housing and related services is expected to grow. According to Census 2000, 233 elderly San Luis Obispo citizens had incomes below the poverty threshold. Residential Care Facilities San Luis Obispo has a limited number of residential care facilities and special housing geared toward the elderly. Residential care homes may also serve youths, adults, the disabled and those in drug and alcohol recovery programs. In 2003 the City had 44 facilities providing housing for special needs groups. Table B-5 summarizes special needs housing and residential care facilities in San Luis Obispo in 2003. 85 San Luis Obispo City Council Draft Housing Element,January 27,2004 Table B-5 Special Needs Housing and Residential Care Facilities, 2003 City of San Luis Obis o T .ofFacilit TotalNumberof Facilities Total Ca acit /Persons Group homes/shelters 6 115 Adult residential 2 22 Disabled- 6 280 L e failies 16 595 Elderly 12 1,338 Drug and alcohol 2 10 Total 44 2,360 Source: City of San Luis Obispo,Community Development Department b) Large Families According to the Census, 1,052 households; or about six percent of San Luis Obispo's households, consist of "large families." Large families are defined as households with five or more persons, at least two of which are related by blood, marriage or adoption. Large families are included as a special needs group because they typically require larger dwellings with more bedrooms than typically needed by most households. Large families require dwellings with six or more rooms, and of these, three or more are probably bedrooms. According to the 2000 Census, the City's housing stock contained about 6,000 large dwellings with six or more rooms, or 31 percent of the housing stock. Large families face the dual challenge of finding an adequately sized dwelling at a cost that they can afford. These families often have the largest affordability gap in securing housing among the special needs groups. This is especially true for renter households, since most of the City's larger dwellings are owner occupied. Of the City's roughly 7,500 dwellings with three or more bedrooms, two-thirds are owner occupied. The remainder, about 2;500 large, rental housing units, is often priced for the student housing market. On a per-person rental basis, a three-bedroom house can often generate larger rents than if it were rented to a single family. In 2000, over half of the large rental units were priced at $1,000 or more per month. For low-income residents, the maximum affordable rent in 2000 was $783, and for moderate-income residents it was $1,675. It is evident from the Census that there is a sufficient number of large dwellings to accommodate the numbers of large families in the City. However, data also show that lower-income households are priced out of both the ownership and rental housing markets for that type of housing. Moderate-income families may be able to afford rental costs for large dwellings; however, a tight student-housing market makes it more difficult for families to secure large dwellings. Large low- and moderate-income families will continue to be one of the most 86 San Luis Obispo City Council Draft Housing Element,January 27,•2004 seriously affected housing consumer groups in the City. Market-rate housing options for this segment of the population are mostly overcrowded, multi-family units or poorly maintained single-family houses. The production of more on-campus, student apartments could help to make available more rental housing suitable for large families. Table B-6 Large Households by Tenure, 2000 City of San Luis Obispo Number of Persons in Unit Owner Occupied Renter O0ccu ied. . Total Five 360 382 742 Six 126 131 257 Seven or More 18 35 53 Total 504 548 1,052 Percent of Total 2.7 2.9 5.6 Households Source: U.S.Census 2000 Universe: Occupied housing units,N=18,653 c) Female-Headed households In 2000, females headed seven percent of the City's households, or an estimated 1,309 households with no husband present. By comparison, about 8.9 percent of county households and 12.2 percent of State households are female-headed. Female-headed households are included as a special needs group because of their low rate of homeownership, lower average incomes and relatively high poverty rates. This group's housing needs are similar to those of the elderly in that affordability,limited income and access to services are key concems. Female-headed households have space needs similar to two-parent households, but are at a distinct disadvantage in competing for suitable housing with the financial resources of only one adult. Often, the single parent must settle for a small dwelling that does not meet the household's needs,or must spend a disproportionately large share of the household's monthly income on housing and child care. Housing close to employment, schools and services tends to be more desirable and therefore more expensive. In their search for affordable housing, families are often forced to trade the convenience of proximity for affordability. As the distance between work, school, daycare and the grocery store is increased, so is the time spent connecting the stops, leaving less time for the family to spend together,a particularly difficult situation for single-parent families. Table B-7 shows the number of female-headed households in 2000. Of the total female-headed households, 264 were listed as having incomes below the poverty level. 87 San Luis Obispo City Council Draft Housing Element,January 27,2004 Table B-7 Female-headed Households, 2000 Cit of San Luis Obispo Household Type Total Percent of Total Households Female-headed households (with own 688 3.7 children under 18 ears) Female-headed households (without 621 3:3 own children under 18 ears) Totals 1,309 7.0% Source: U.S.Census 2000 Universe: All city households Affordable housing needs of female-headed households can be addressed through rent assistance, low- and moderate-income housing production, shared equity/down payment assistance and group housing. Housing opportunities also can be improved through city policies calling for the provision of affordable childcare, and by locating family-oriented housing developments close to major employment areas,transportation facilities and shopping. d) Disabled Persons As shown in Table B-8, about 14 percent of City residents reported some type of disability on the 2000 Census. Access and affordability are two major issues that may limit housing choices for disabled people. This group is included as having special housing needs because the disabled often need facilities not typically provided in conventional housing. Depending on the disability, special accommodations may include specially designed interior features and accessibility provisions outside the unit. California Administrative Code Title 24 sets access and adaptability requirements for the physically handicapped, and these apply to most new residential and commercial developments. The regulations require special architectural features to meet the needs of disabled persons, including access ramps, accessible restrooms and appropriately designed interior features. These requirements do not apply to single-family residential construction. 88 San Luis Obispo City Council Draft Housing Element,January 27,2004 Table B-8 Persons Reporting Mobility or Self-Care Limitations, 2000 City of San Luis Obispo Mobility Self-Care Mobility and %Of Limitation Limitation Self-Care Population Only Only limitation Total =42,174 Persons 16-20 460 0 33 493 1.2 Persons 21-64 2,969 12 341 3,322 7.9 Persons 65+ 1,504 0 495 1,999 4.7 Totals 4,933 12 869 5,814 13.8 Source: U.S.Census 2000 Universe: Civilian non-institutionalized population>five years. Convalescent homes and assisted residential-care facilities provide limited medical care in an institutional setting. They usually accommodate older residents and others who do not need acute medical care but who cannot live independently. Since 1994 several new residential carelassisted living facilities have been built, catering mainly to elderly and disabled persons. These range in services from apartments for relatively independent living in a group setting to residential care facilities with full, onsite support services, including personal and medical care. As shown in Table B-5, San Luis Obispo has residential care facilities, apartments or group homes that can accommodate about 1,618 elderly or disabled residents. Other adults, who need less medical attention than is provided by a convalescent home, are accommodated by an increasing number of small group homes (discussed below). Those with multiple or severe disabilities, usually both physical and mental, require group living arrangements where care and supervision can be provided. San Luis Obispo has one large facility with about 90 occupants and one smaller facility for infants and young children. The demand for such accommodations is expected to grow at about the same rate as the overall population. Sites for large facilities of this type are limited in number, although moderate-sized and smaller facilities could be accommodated in many residential areas throughout the City. Persons with mental or physical disabilities who do not need medical supervision but are not able to live independently can usually be accommodated in large or small group homes. Small residential care facilities typically accommodate between six and 12 people, and provide beds, meats and 24-hour assistance by caregivers. According to AIDS Support Network of San Luis Obispo, there are an estimated 75-100 persons in San Luis Obispo suffering from HIV/AIDS and related illnesses. Those suffering from 89 San Luis Obispo City Council Draft Housing Element,January 27,2004 HIV/AIDS have specific supportive housing needs. The main housing problem for this group is housing affordability, since in many cases, the HIV/AIDS patient can no longer hold down a job. Mobility also is an issue, as a large percentage of this group is dependent upon public transit. There are 12 apartments in San Luis Obispo (two facilities) exclusively for this group, able to accommodate up to 24 persons, plus another eight units available through the City of San Luis Obispo Housing Authority (with a capacity for 16 people), as available. HIV/AIDS patients also live in public housing for very low- and low-income persons, through the Housing Authority of the City of San Luis Obispo. Those recovering from alcohol and other drug dependencies and those making the transition from institutional environments to more independent living can benefit from sheltered and supervised accommodations, or "transitional housing." San Luis Obispo has two such facilities with about 10 occupants. Demand for additional facilities of this type can be met through houses for six or fewer residents and additional medium-sized facilities. Under the City's Zoning Regulations, such facilities are deemed "Adult Residential-care Facilities" and, provided they are State- licensed, are permitted in all residential zones. Demand for such facilities is expected to grow at about the same rate as the overall population. e)Homeless Persons The homeless population in San Luis Obispo appears to be increasing, in part because of increased visibility and changes in the make up of the homeless population. Historically, most homeless people were young or middle-aged men, often with little education or with alcohol or drug dependencies. However, in the last decade, homelessness in San Luis Obispo has become more visible. Steeply rising housing costs, reductions in public assistance and other economic changes have increased the number of homeless to include families with children and adults with disabilities or chronic health problems. The growing shortage of rental housing affordable to very low- and low-income households further limits housing options for persons on the brink of homelessness. Homelessness is inherently difficult to quantify because it is often a transitional situation dependent upon a household's or individual's changing economic condition or location. Lacking permanent housing, homeless persons are often missed in census surveys and other community inventories. While no formal surveys have been done on the number of homeless people living in San Luis Obispo, it is possible to derive an estimate from the above service data. While small homeless facilities recently have been established in North and South County, San Luis Obispo remains the center of homeless services and facilities for the County. According to the Economic Opportunity Commission of San Luis Obispo County (EOC), there are an estimated 3,000 to 4,000 homeless persons in San Luis Obispo County, or about 1.2 percent of the County's population in 2000. The two largest facilities providing homeless services in the County are located in San Luis Obispo: 1) the Maxine Lewis Memorial Homeless Shelter, a 49-bed shelter that provides showers, clothes, evening meals, client mail and phone 90 San Luis Obispo City Council Draft Housing Element,January 27,2004 services year-round, plus an additional 30 beds provided off-site through the Interfaith Coalition for the Homeless, and.2) the Prado Day Center, which supplies lunch for an average of 83 people each day and other services to over 90 people daily, with children comprising about 10 percent. The magnitude of the homeless problem is evident from the number and range of services provided. During 2002 the Homeless Shelter served 980 different people and provided 25,920 bed-nights of shelter. Each bed-night included a hot meal for the homeless guest, while an additional 6,578 meals were served to people who were not staying at the shelter. On the average, 70 people receive shelter nightly, and an additional 18 persons are given a free evening meal. At the Prado Day Center, 958 homeless people were served, with a total of 30,547 homeless services provided during 2002. The Day Center provides a supportive environment for individuals and families needing life services and a home base during the day. Clients have onsite access to showers, phones, mail, daytime meals (through Peoples' Kitchen), laundry and a range of public and private service providers, including job counselors. Information provided by the San Luis Obispo Police Department and the Parks and Recreation Department indicates that an unknown number of homeless people are living in cars, campers, city creeks and open space areas and do not avail themselves of the homeless shelters. Homeless service providers require that to receive services at the shelters, homeless persons must sign in and must not be under the influence of drugs or alcohol. For these and other reasons, many homeless people in San Luis Obispo remain invisible in terms of their numbers and the services provided to them. By comparison, in 1992,the SLO Homeless Shelter provided services to 861 different people and an additional 581 others were served meals only. A total of 18,077 bed-nights of shelter were provided in FY 1992, and 41,190 meals served. Another 779 others were provided with social services through the Prado Day Center, with 4,435 units of service provided(client contacts for a variety of referral,informational and advocacy purposes). Transitional housing gives homeless people a stable environment while they seek employment or learn life skills towards self-sufficiency. In the last decade, San Luis Obispo has spent its entire 15 percent of CDBG public services funds each year on homeless services, yet existing facilities cannot fully meet the need for shelter or services. Some of the unmet service and shelter needs will be met by faith-based organizations and other service groups locally and in North and South County that have begun to offer homeless support services, using both public and private funding sources and volunteer staffs. The County's Consolidated Plan 2000 targets a Continuum of Care approach for addressing homelessness on a regional basis. Each community, through the San Luis Obispo Urban County Community Development Block Grant (CDBG) program, is encouraged to provide a range of homeless services, including outreach and assessment, basic emergency shelter, emergency services, counseling and case management and transitional and permanent housing. In 2003, however, total funding available for public services (15 percent of total CDBG funding) 91 San Luis Obispo City Council Draft.Housing Element,January 27,2004 countywide is approximately $388,000 annually. This amount is not adequate to meet the countywide need for homeless operating expenses or capital improvements. f) Farm workers The City of San Luis Obispo is in the County's central coastal agricultural region. San Luis Obispo City is, for the most part, urbanized with only a few small farms still engaged in. agricultural production. According to the 2000 Census, about 0.9 percent of the City's labor force over 16 years of age work in the agriculture, forestry, fishing and hunting industries, or approximately 181 persons. Since less than one percent of the City's labor force works in agriculture, it follows that few farm workers actually work or live in the City. The primary factors with regard to farm worker housing are affordability, proximity to jobs and bi-lingual services for predominantly Spanish-speaking residents. High housing costs make it extremely difficult to meet farm worker housing needs in San Luis Obispo. A 1993 study on farm worker housing in San Luis Obispo prepared by the People's Self-Help Housing Corporation indicated that while there was some need for farm worker housing in the City, the strongest needs for farm worker housing were in other, more predominantly agricultural areas such as Paso Robles, Shandon, Nipomo and Arroyo Grande. In 2003, about 33 acres remain in agricultural use within the City. The most intensive agricultural activity in the San Luis Obispo area is located in the Edna Valley,just south of the City. In the last decade, this area has experienced a rapid increase in wine grape production and has generated a need for additional farm worker housing. While the majority of farm worker housing needs will continue to be met in North and South County areas closer to large farms, vineyards and ranches, there is still a need for an estimated 100 to 200 housing units suitable for farm worker families in San Luis Obispo during the planning period. This need may be met through the development of additional very low income public housing, mixed-, low- and moderate-income housing through the Inclusionary Housing Program, and First-Time Homebuyer Assistance to provide gap loans and/or grants for low- income families hoping to purchase housing. g) Students Cal Poly University and Cuesta College students comprise more than one quarter of the City's population, and strongly influence the housing market. Although often grouped into low-income categories statistically, many students can spend more on housing than income data suggests because of parental support or larger household sizes. By pooling their housing funds, groups of students can often afford more expensive housing than non-student households.. This contributes to higher rents in San Luis Obispo than in other parts of the County. Student housing preferences sometimes result in competition and conflicts with other segments of the City's population. About 3,800 students live on the Cal Poly University campus in 92 San Luis Obispo City Council Draft Housing Element,January 27,2004 dormitories or apartments. Student housing complexes close to Cal Poly University have, since the late 1990s, experienced high occupancy rates, prompting many students to seek alternative housing arrangements outside the immediate campus area. Many students choose to find apartments or condominiums elsewhere in the City, and increasingly, students choose to share houses in single-family neighborhoods. The presence of students renting houses in neighborhoods sometimes leads to complaints from surrounding property owners due to lifestyle conflicts,parking congestion, noise and property maintenance concerns. According to Cal Poly University, in 2003 about 17 percent of its students live in campus residence halls, about 38 percent live in student-oriented apartments and fraternity houses within a mile of campus. The other 45 percent, including married and graduate students, either find housing elsewhere in the City of San Luis Obispo or in other communities throughout the County. In fall 2002, about 12,300 Cal Poly students, or two-thirds of the University's total enrollment of 18,453, lived in the City. According to Cuesta College, approximately 3,263 students, or 33 percent of total enrollment, made San Luis Obispo home in fall 2002. Hence, an estimated 15,600 college students live in San Luis Obispo and comprised about 35 percent of the City's January 2003 population Student lifestyles — and thus, housing needs — often differ from those of non-student households. Most Cal Poly students are young adults, have cars, many have part-time jobs, and most have classes any time from early morning to late at night. To meet these needs, student-oriented housing often includes: 1) a larger number of parking spaces in proportion to bedrooms than is required for "traditional" family housing; 2) individual study areas; 3) proximity to Cal Poly or transit; and 4)easy access to food services, laundromats and recreational facilities. Cal Poly University and Cuesta College students are, on the average, relatively affluent, and many can afford housing that meets their needs. However, large apartment complexes in the City designed specifically for students experienced higher than normal vacancy rates in the early- to mid-1990s as many students chose instead to live in detached houses. Coming from family homes, many young students prefer the appearance, space, flexibility and freedom offered by detached houses, often located in "single-family neighborhoods." To afford rent, three or more students often live together and share costs. This means that homes designed to meet the needs of families are increasingly occupied by several unrelated adults. Because the homes were not designed to meet student needs or lifestyles, conflicts with the neighborhood residents sometimes arise. Common complaints are: 1) that there are too many cars on the rental property or parked on the public street; 2) that renters cause excessive noise and hold activities, including parties, until late at night; and 3) that the homes and grounds are not well maintained. The Cal Poly Master Plan anticipates significant growth through 2008-2009, when the student headcount is anticipated to reach 18,800 students, an increase of just under 2 percent. To help meet expanding enrollment, Cal Poly opened 200 four-bedroom, on-campus apartments in fall 2003, and plans to build up to 900 apartments for a fall 2006 opening. In addition, 72 faculty/staff housing units are slated for development adjacent to the campus in 2004-2005. These additional units should help reduce pressure on the City's rental housing market. And 93 San Luis Obispo City Council Draft Housing Element,January 27,2004 while these new apartments will help to address housing needs generated by Cal Poly enrollment growth during the planning period, they will not address the existing shortage of student housing. Student housing will continue to be a major housing need in the City. h)Fraternities and Sororities Another important concern is meeting the housing needs of student fraternities and sororities. "Greek" houses are allowed in medium-high- and high-density residential zones, with a Planning Commission use permit. In 2003, there are six sororities and 18 fraternities that hold fraternal events and maintain a presence in San Luis Obispo. Of these, all of the sororities and 14 fraternities occupy fraternal "houses" owned or rented by the organizations. These organizations have about 1,300 members, and of these, about 250 to 300 members live in fraternal housing. According to Cal Poly officials, it is likely that up to four fraternities and two sororities will be seeking fraternal housing in the City within the planning period. A decade ago, in 1993, 17 fraternities and sororities had use permits for houses within the City Limits, housing approximately 430 students. Approximately 1,550 (down from 2,500 in 1993) Cal Poly students belong to sororities or fraternities, or about nine percent of the student body. Student interest in joining fraternal organizations, especially sororities, appears to be on the upswing. As part of Greek activities, many Cal Poly fraternities and sororities actively participate in beneficial university and community programs and events. In addition, they often host meetings, recruitment activities and social events that can have a negative impact on their neighbors. For example, on-street parking is affected, and noise and traffic levels often increase due to frequent visits by non-residents attending fraternal activities. When Greek housing is located close to non-student housing, compatibility conflicts sometimes arise. There are few large sites available that could accommodate a new fraternity or sorority and still satisfy parking and group meeting needs without posing neighborhood conflicts. Conflicts between these organizations and other citizens are common -- partly because there has never been a shared community consensus on a plan to guide the University, fraternities and sororities, neighbors and the City in meeting this need. The solution may be, at least in part, to identify appropriate locations for additional Greek housing on or near the Cal Poly campus. For several years, various committees have devoted themselves to creating a "Greek Row" -- an area large enough to house a number of sororities and fraternities in one place. The concept has wide support in the community,but the possible locations all have drawbacks. A Community Housing Task Force that included students, members of Cal Poly administration, the Mayor and other citizens and City staffers identified several alternative locations for a Greek Row. Among those Were Cal Poly land, the Hathway neighborhood and conversion of existing student complexes such as Mustang Village. The City intends to encourage "Greek housing" on the Cal Poly University campus, and until that can be accomplished, or in R-3 and R-4 zones. A future Cal Poly Village, a new on-campus residential complex expected to house up to,2,700 students, may provide new opportunities to establish Greek housing. 94 San Luis Obispo City Council Draft Housing Element,January 27,2004 i) "Shared" households San Luis Obispo encourages a variety of housing types to meet varied lifestyles and needs. Many people are looking for alternative ways to limit the amount of income they spend on housing. U.S. Census figures for 2000 show that more unrelated adults are sharing houses than ever before. In San Luis Obispo, the percentage of non-family households (households with one or more non-relatives) is 45 percent, up 14 percent from 1990. In addition to saving money, sharing a house also provides the benefits of companionship and security. There appears to be substantial community interest in shared-housing opportunities such as cooperatives or co-housing. Co-housing allows residents to live in their own private spaces and share centralized dining, meeting and recreation facilities and services. Co-housing started in Denmark in the 1960s and has been gaining popularity in this country. Some of the obstacles to providing co-housing in the City are the availability of sites, public acceptance of and the possible need for exceptions to current standards to develop such a project. 3. Conclusions Three general categories of housing needs are discussed in this section: existing needs, growth needs and special needs. These are summarized in Table B-9. Table B-9 Summsiry of Housing Needs Ci of San Luis Obispo 2001=2008-Growth Needs(RHNA) Special`Needs Groups Very-Low income 11484 Elderly 51400 its households Low—income 844 Disabled persons 51814 units Moderate-income 870 Large households 19052 units Above Moderate 1,185 Female-headed 19,309 income units households TOTAL 49,383 Farm worker 100-200 households Greek housing 6 (sites) Overpaying Households. Overcrowding Renters 69600 Renters 814 Owners 19550 Owners 100 95 San Luis Obispo City Council Draft Housing Element,January 27,2004 11 TOTAL 89150 TOTAL 914 The main findings of the needs analysis are: • Ovetvavment. In 2000, 44 percent of all City households overpaid for housing. Among low-income households (<$35,000/year), 52 percent of owner households overpaid and 78 percent of renters overpaid for housing. • Overcrowdina.. Overcrowding appears to have declined in San Luis Obispo since 1990. About eight percent of rental units are overcrowded, and just over one percent of owner- occupied units are overcrowded. • Large Families. In 2000, about five percent of City households, or 897 households, were "large families" with five or more members, at least two of which were related. Large dwellings, with six or more rooms, make up about one-third of the City's housing stock, or 6,000 units. The majority of these units are owner-occupied. • Female-headed Households. Female-headed households comprise seven percent of the City's 18,656 households, or about 1,300 households. Of these, about one-half include children under 18 years of age. • Regional Housing Needs. San Luis Obispo's assigned regional housing need for the planning period January 2001 —July 2008 is 4,383,broken down by household income group as follows: Very Low -- 1,484 units; Low -- 844 units; Moderate -- 870 units; and Above Moderate-- 1,185 units. 96 San Luis Obispo City Council Draft Housing Element,January 27,2004 Appendix C Housing Constraints and Resources 1. Governmental Constraints Governmental constraints are the policies, standards, requirements, actions or fees imposed by local, State or Federal governments to guide land use and development. Their purpose is to ensure that communities are well planned, and to protect the health, safety and well being of all residents. In achieving these ends, government rules may serve to constrain the construction rate, amount or design of new housing. State law requires that governmental constraints on housing be addressed in the Housing Element, with the goal of removing or modifying such constraints where possible to encourage suitable housing. Within the City of San Luis Obispo, local building and zoning regulations are the primary regulatory tools guiding development. Some regulations, such as the Uniform Building Code and the California Environmental Quality Act, are State- mandated policies and standards implemented at the local level. Although State and Federal agencies do play a role in the imposition of government constraints, these agencies are generally beyond the influence of local government and are not analyzed in this document. a) Land Use Controls General Plan By State law, all California cities must have a general plan to guide land use, transportation, housing and other important facets of the community. The general plan is the foundation of all local land use controls, and embodies the community's vision for an environmentally sound, life- sustaining future. Seven mandated elements,or chapters, make up the general plan, plus optional elements adopted by the jurisdiction to address special community concerns. Among these elements, the land use element identifies the location, nature, distribution and character of land uses in the City. To implement the General Plan, the City uses a number of planning tools including Zoning Regulations, Specific Plans, Subdivision Regulations, Community Design Guidelines, Historic Preservation Program Guidelines and Parking and Driveway Standards. Property owners, developers, architects and others use these standards in designing new housing developments. The standards help explain the City's requirements and expectations, and are used by the City when reviewing development proposals. Policies outlined in the Land Use Element stipulate the amount, type and location of housing. They also help establish the prevailing housing patterns and population density. Residential zones account for over 40 percent of total zoned land area within City limits. The San Luis 97 San Luis Obispo City Council Draft Housing Element,January 27,2004 Obispo General Plan provides for four residential zones, plus nine zones where housing is allowed with special approval. Table C-1 shows the land use zones that allow housing, their existing acreage-and the ranges of density allowed. Table C-1 Land Use Categories Allowing Residential Uses Cit of San Luis Obispo Zone Description Acres in 2003 Max.Allowed Density,Density Units/Net:Acre R-1 Low-density Residential 1,672 7 R-2 Medium-density Residential 497 12 R-3 Medium-high-density 166 18 Residential R4 High-density Residential24 172 _ C-C Community Commercial 912 36 C-D Downtown Commercial 45 36 (formed "C-C"zone) C-R General Commercial 166 36 GN Neighborhood Commercial 51 12 C-T Tourist Commercial 205 12 C-S Commercial Service 461 123 M Manufacturing 186 12 O Office 169 12 GOS Conservation/Open Space 1,812 one dwelling/five acres A Density Unit is equivalent to a two-bedroom dwelling. Other sized dwellings: Studio dwelling,OS DU;one- bedroom dwelling,0.66 DU;three-bedroom, 1.5 DU;four or more bedrooms,2.00 DUs. Net acre refers to site area minus dedicated right-of-way. 2Community Commercial is a new zone in 2003,and consists of large shopping centers. 3 I combination with Mixed-Use (MU) overlay zone, up to 24 DU/acre allowed. 12 DU/acre considered likely average density achieved. General Plan policies encourage infill development to avoid sprawl, and also designate major residential expansion areas outside city limits and within the Urban Reserve, the City's anticipated urban limits at build out. The policies seek to balance residential development with open space preservation and availability of urban services. According to the General Plan Land 98 San Luis Obispo City Council Draft Housing Element,January 27,2004 Use Element, a total of 24,300 dwellings is anticipated within the City by the year 2022, accommodating approximately 57,200 persons. As of January 2003, the State Department of Finance reported 19,558 dwellings in San Luis Obispo, housing a total of 44,359 persons. b) Zoning Regulations and Development Standards Zoning Regulations implement the City's General Plan land use policies. They establish specific development standards, allowable land uses, performance standards and the permit process necessary for the City's orderly development. Zoning regulations control development by regulating allowed uses, and by development standards that set density, building setbacks, building height, lot area and parking requirements. The regulations apply equally to mobile homes, manufactured and site-built housing. Table C-2 summarizes residential zoning development standards for San Luis Obispo. ' The standards are comparable to other communities' requirements and ensure a quality living environment for all households, regardless of tenure or income group. Secondary Residential Units Secondary residential units, or "granny flats", are permitted on legal, conforming lots in any residential zone. Such units allow property owners to provide modest, affordable studio units by right on legal, conforming residential lots. Also, several exceptions or variance procedures possible in the "planned development" and "specific plan" zones allow flexibility in site planning and building design to encourage the development of housing for special needs groups, and to provide density bonuses for projects which include affordable housing which meets or exceeds City standards. Table C-3 lists some of-the City's Flexible Development Standards to encourage housing. Energy Conservation Compliance with Title 25 of the California Administrative Code on the use of energy efficient appliances and insulation has reduced energy demands resulting from new residential development. The City's Energy Conservation Element, Subdivision and Zoning Regulations promote energy-conserving design and placement of buildings, and Pacific Gas and Electric offers public information and technical assistance to developers and residents on ways to conserve energy in the home. City policies encourage alternative building designs that conserve energy through passive and active solar features,"green" building technology and appropriate use of landscaping to help reduce heat gain,preserve solar access, and provide windbreaks. 99 0 c ti c m (r w w W FA a � 3z z Z z z Z a a a y z > r7 �Q s 0 c C 4.1 w 'y E � e 6� ,C �'• 7 C_ N v O o ` c p N N .. -rj' N N N N N N "C r- e �E E E£ E E E E~ o ca c b m m ca c cc ca o ,� &n co s W V) V5 CIO U) � w a $ u C0� p a s �i nyi N .0 W N N 0= X 0 0 0 0 o c W N � w O o � � C" m O O ... is C4 N Nom. O O O O ' ' N w aim O oC tn oO > v� c v n in in 4.) �" vi U q� N N M M M V'1 M M M M a IMilYil N A .0 y 8F s° Lk t` 8i 8° tRo U aai Y! d O O h h to in vn v1 O `�d M y a cc � U � o ca w GL' - .E Q .a U o 6 S g S E coc `o TA $'s en � T 7 T O �- u e E v a y mad r- C C C dO ._ O..o C r O• �• '� •w O 1A W G CQcr O M e°euro uu90 s ° m000 yaj O RI m c ? 3 am .w. N � 7 C . u �'•' �. CIOm�i m � ocu9E � o uOacia`, m N � o w a s CQ d 3 c o o 'm o `^ c 5 a>i 9 3 _ u a_ u cc 00 r- m c o eci E u c 3 — y r L •'O O C .� T e � � �' u y. x°03 ' ' m b 3 3 •u c '9 � � o � � c `� 'u o E M CL. CC be 3 u g ° 0. C E E � oU u mm'_ '4L y `o cUS o R ° � E ° O • •rl !O O T �.. 7 ` C C N u 0 •3 m w -ST N O y y a> m eA3 � , 'b ► c� g3m = yflCu - T9Op E i' Hrc w � ac+ cC N r is •pC � �' C ¢O7 O C y� b y �, w _ > 3 > CL O N C aiy U 3. G um'.�a > ca Cr X 'm T �_ w •O O > C O 'L' n"' y T., o �i S :E c o •uo iv �i °' ,°u° E ° = E `z' w •o •E ° L: Q ] ��yy bo u EQ ►� .• y iC E rJ u m O C y•> 7 T c •° 'O m•� C a7 j�. c Loo u T L w •- E ab C � N `o � u � vu � � 8 �n � � � wa aEcUEz N 'Eps w E or m A C a r pp L U N w to C m > ay to U � 3 p = m � � •° � � 3 c C R yy u 'F N u m C FL` a 3 C E _ C-1z Z Zr- f� v F� rLi1 a C m Mixed Residential and Commercial Uses Mixed residential and commercial uses are encouraged to allow for more housing in areas close to jobs and employment centers, to exploit affordable infill housing opportunities and to promote a compact, pedestrian- and transit-friendly urban structure. Dwellings are permitted in all commercial zones with either a conditional use permit or Mixed-Use (MU) rezoning, including office, service-commercial/light industrial and manufacturing zones. The application of an "MU" overlay to any other zone allows the property owner to combine multiple uses, including both residential and commercial sites. Application of the MU zone is a rezoning action. Establishing new mixed uses requires use permit approval. In 2003, the City revised its zoning regulations to allow livetwork apartments in the C-S zone, and work/live apartments in either the C-S or M zones. Previously,only caretaker quarters were allowed in these zones. Parking Requirements San Luis Obispo's car parking requirements are shown in Table C-2. The type and number of car parking spaces varies by zone. Flexible parking requirements and design standards allow developers to reduce parking by up to 30 percent for mixed-use developments. Flexible standards also allow variety in parking locations, layouts and design in order to promote more efficient and attractive use of residential sites. Bicycle and motorcycle parking also is also required for multi-family housing at the rate of one motorcycle plus one bicycle space per 20 car spaces. Parking requirements indirectly constrain housing, especially in the Downtown Core where parking is very limited. Because the Zoning Regulations require that parking be provided on the same site as the use, this reduces the amount of land available for residential development. While excessive parking requirements can unduly constrain housing, insufficient parking can adversely affect residents' safety, quality of life and neighborhood compatibility. The City's standards seek to establish a balance by allowing flexible requirements that can be tailored to specific site conditions where necessary. Much of the City's Downtown Core was developed in the late 19`h and early 2e century when automobile parking was not required. Many parcels in the C-D and C-R zones lack onsite parking. The Downtown Core is the most intensively developed area of the City, and development standards encourage 100 percent site utilization and a mix of commercial, residential, cultural and governmental uses. In the C-D.zone, parking is half of what is required for residential use in other zones, and may be met by locating parking off site, within 500 feet of the use, or by paying a fee in lieu of providing parking. The long-term strategy has been to build public parking facilities on the edges of Downtown to encourage infill and intensification, use of public transit and a more "pedestrian friendly" Downtown Core. The C-D zone allows the highest density housing in the City. However, housing is difficult to build, in part, because of the difficulty in providing parking. Downtown hotels (Anderson Hotel, Granada Hotel, Wineman Hotel, Blackstone Hotel) were developed with little or no parking, San Luis Obispo City Council Draft Housing Element,January 27,2004 while providing housing for tourists or residents without cars. 2000 Census figures show that about seven percent of San Luis Obispo householders did not own a car. For those without cars, or those who use cars infrequently, Downtown provides an alternative housing choice near schools, shopping, nightlife,jobs and services. For those who do need cars, the possibility exists for shared use of private or public downtown parking facilities. For example, some parking may be available for rent in Downtown public parking facilities during evenings, when times of peak parking demand do not coincide. Additional flexibility to allow very low or no parking requirements for residents without cars and with adequate guarantees tied to occupancy, could help expand this important housing resource. Subdivision and Grading Regulations Subdivision regulations determine how land is subdivided and set requirements for facilities such as public streets and utility lines that serve the new subdivisions. Specific requirements for materials and construction are adopted as policy by the City, according to recommendations by the City Engineer. Special limits and requirements are often set by the City Council when approving individual subdivisions. The minimum lot size in residential zones is 6,000 square feet, with minimum widths of 50 or 60 feet; however, exceptions to lot size and dimensions are possible with City Council approval. As a special type of attached, ownership housing, the Condominium Regulations set minimum standards for open-space, recreation, laundry facilities, solar heating and storage that are higher than those applied to rental housing. The City's Grading Regulations set limits and procedures for earth moving, generally to prevent mass recontouring and erosion and to assure stable building sites. Lot Size. Lot sizes and established neighborhood patterns influence the types of housing within a community. Historically, most residential lots in San Luis Obispo ranged in size from 5,000 to 7,500 square feet, with about 6,000 square feet being common in newer subdivisions. The subdivision of land into parcels of 6,000-10,000 square feet, regardless of allowed density, has encouraged the development of low-density, detached housing. Reducing the minimum lot size is often recommended as a means of increasing housing density and thereby reducing cost. It does not necessarily follow, however, that small lots will result in more affordable housing. There are many coastal resort communities in California with high-priced cottages on small lots. In high-density residential areas, small lots may encourage the construction of detached, rather than multi-family housing. Large parcels in medium-high and high-density residential zones offer the best opportunities to encourage affordable housing. Larger parcels in San Luis Obispo, even in low-density residential zones, are suitable for apartments and condominiums. San Luis Obispo allows relatively small lots of 6,000 square feet in all residential zones, and has the second highest residential density of the County's cities (after Grover Beach) with about 4,500 persons per square mile. It remains, however, one of the most expensive housing markets in the County. Clearly, market demand strongly influences housing costs. And while the City's lot pattern has been established in most areas, lot patterns in expansion areas are yet to be determined, allowing the opportunity for a mix of residential densities and lot sizes. 103 San Luis Obispo City Council Draft Housing Element,January 27,2004 Land is a major component of housing costs in San Luis Obispo. In many of the City's older neighborhoods, lot sizes of less than 6,000 square feet are common. While many housing consumers prefer single, detached houses on 6,000-square-foot or larger lots, there also appears to be a market for smaller, detached homes on relatively small (e.g. 4,000 to 4,500 square feet) lots. Reducing lot areas, with a concomitant reduction in house size, is one strategy to reduce housing costs for those desiring "starter housing," such as working couples and small families just entering the housing market. In 2003 such development would require approval of a variance or a planned development (PD)rezoning. c) Specific Plans As the name implies, specific plans guide the development of a defined area to implement the general plan. Such plans can vary widely in terms of geographic area covered, degree of specificity, and land uses addressed. As shown in Table C-4, the City has four expansion areas Table C-4 Estimated Housing Capacity in ExImnsion Areas, 2003 Expansion Area Dwellin .Units Orcutt 979 Margarita 868 Edna-Islay West 54 Minor Annexation Areas and Cal Poly 2,091 TOTAL 3,992 (Foothill Saddle,Luneta,CDF,Highland,Miossi,Alrita,Maino,Cal Poly,and other residential areas). Includes approximately 900 student apartments on the Cal Poly Campus. that, when annexed and fully developed, could potentially add 3,091 dwellings, plus student apartments being developed on the Cal Poly University campus. Most of the City's large residential developments will be located in designated expansion areas located outside the 1993 City limits but inside the Urban Reserve Line. Figure C-1 shows the location of future residential areas outside the 1994 City limits. City policies require the preparation of specific plans for each of the major expansion areas, with provisions for phased housing development. Each area's phasing will be determined, in part, by the affordability of the dwellings, and by other public benefits such as open space. The specific plan area committed to producing the largest number of dwellings affordable to very low- or low-income residents generally will be developed first. 104 1 • . ..1 / t1 . 7 1 21 M I M1 1 11 I 1:11 : l 7 11 :•: ME Nil 1. 1 1 i • 1 1 1I f� t��,:Y �_:•. ., _ III *I;-, ��+� •ra1���1♦�1`3.1 � 1 • 1 r.I�'V1 ��IL�• • 1 4 _ 41, li.�♦ j = ��` ( . "��• • 1 11 : 1 t1A1!.7a' 1 1 . . 1 •n i •"-1 77fTl 0 11 • 1 •. L' . 1 • 1 1 1 11 . � :11 1 Y 1 1 • 1 1 1 . 1 • : .• 1 • 1 1 1 11 R. •'. : 11 . 1 1 1 '1. • • 1- • 1 1 •_ • 1 i 1 • 1 1 i. 1 11 • • 1 1 1 11 1 • 11 • . • 1 " • 1 • _ 11 • 1 • 1 H 1 • • • of - 1 1 1 1 • :1 • 1 . • • • 1 • 1 San Luis Obispo City Council Draft Housing Element,January 27,2004 Area, and directed staff to proceed with preparation of a Specific Plan and Environmental Impact Report. A major issue emerging in planning for future residential development in the southern part of the city is how additional elementary school enrollment will be accommodated,if a school cannot be located in either the Margarita Area or the Orcutt Area, under policies adopted by the independent Airport Land Use Commission. d)Residential Growth Management Regulations Quantified objectives anticipate the construction of 2,909 in-city dwellings during the planning period. Of these, 53 percent, or about 2,170 units will be for very-low and low-income households following the percentages of housing affordability in the City's RHNA number. Very-low, low, and moderate income dwellings are exempt from the residential growth regulations, as are infill housing, second dwelling units, and other residential development outside designated Expansion areas. Figure C-2 General Plan Anticipated Housing and Population Growth City of San Luis Obispo Table 2: -4aticiipated City Population Growth 60,Wse aua 57MD 4�,�oa �. 50,000 17 Apvmdmai3e 40,000 Maximum Number 30,000 of OweL�i:tgs zt. 23IQ 13Anticipid 20,000 Number of Pecoe 10,000 (1) 0 1992 1997 2002 2007 2012 2017 2022 Source: City of San Luis Obispo General Plan Land Use Element Estimated urban reserve capacity:57,700(2) Notes: (1)Includes residents of group housing. (2)Includes Cal Poly campus residents,who are inside the urban reserve but who were outside the City limits in 1994. The Residential Growth Management Regulations will not prevent the City from achieving its quantified objectives because they do not set a numeric cap on all housing. New housing for very low-, low-income residents, and housing growth outside of expansion areas (such as infill and intensification) are not regulated. Figure C-2 shows the housing and population growth anticipated in the General Plan. General Plan policies promote a balance of land uses to create a healthy, sustainable and resilient 106 San Luis Obispo City Council Draft Housing Element,January 27,2004 economic basis, protect the natural environment and promote housing that can accommodate all income groups. The General Plan States that population growth should not increase more than one percent per year, averaged over a 36-month period, until it reaches a buildout population of 57,200 persons in 2022. To accomplish this objective, the City amended its Residential Growth Management Regulations in 2000. The new regulations emphasized development phasing in major annexation areas as the means to manage long-term residential growth. The regulations include a phasing plan showing the number of new dwellings to be built in residential expansion areas during three-year intervals. The plan is reviewed annually to allow for revisions and to respond to changes in construction cycles. Revisions would allow allocations to be shifted among areas, or the phasing intervals could be modified to better achieve housing goals. Table C-5 shows the phasing plan adopted in 2002. The phasing plan will be updated in 2003-2004 to reflect the status of the major expansion areas. As of January 2004, residential construction in the Margarita and Orcutt areas has not yet begun. In 2003 plans for the Margarita and Airport areas are nearing completion with approval expected in 2004. Plans for the other major residential expansion project, the Orcutt Area, is in the early stages of preparation. Housing construction in the Margarita Area is likely to start in 2005, with the Orcutt Area expected to follow no sooner than 2008. Expansion areas that provide the most affordable housing and other community benefits, such as open space protection, will receive development priority. Table C-5 Major Expansion Areas Phasing Plan, 2002 Source: City of San Luis Obispo,Community Development Department,August 2002 Nous: Number of Dwellings Permitted(a,b) Calendar years: 2002- 2005- 2008- 2011- 2014- 2017- 2020- 2004 2007 2010 2013 2016 2019 2022 Total Assumed Demolitions 40 -30 -30 -30 -20 -20 -10 -180 Assumed New in-city(c) 110 100 100 100 100 100 100 710 Allowed Dalidio 0 180 0 0 0 0 0 180 Allowed Irish Hills North 80 0 0 0 0 0 0 80 Allowed Irish Hills South 86 0 0 0 0 0 1 0 86 Allowed Orcutt 70 90 215 235 30 0 0 640 Allowed Margarita 1 264 235 310 1 303 1 0 0 0 1,112 Assumed Other annexations 1 20 30 30 1 30 1 30 30 30 200 Calculated Interval total: 590 605 625 638 140 110 120 2,828 Average annual%change(d) 1.00 1.00 1.00 0.99 0.22 0.17 0.18 0.69 (e) (a)Dwellings affordable to residents with very low or low incomes,as defined in the Housing Element,are exempt. 107 San Luis Obispo City Council Draft Housing Element,January 27,2004 (b)This is a simple count of dwellings and isnot meant to reflect the Zoning Regulation's method for calculating fractional dwellings. (c)Includes the incorporated area in 1994 and certain annexations during 1994- 1998(Stoneridge;Prefumo Homes; and the El Capitan,Goldenrod and Fuller Road parts of the Edna-Islay Specific Plan,which has its own growth management provisions). (d)A calculated result:dwellings permitted(new construction minus demolitions),divided by three,divided by the total number of dwellings projected to be in the city at the middle of the interval,times 100;assumes that the maximum amounts are achieved in previous intervals. (e)A calculated result the compound.growth rate that over 24 years would result in the total net increase. The Airport Land Use Plan The San Luis Obispo County Airport has a major influence on the.community, particularly the southern part of San Luis Obispo's urban area where most of City's residential growth is planned. Under State law, a countywide, independent Airport Land Use Commission (ALUC) adopts a plan identifying land uses that are compatible with present and future airport noise and safety conditions. The area subject to this Airport Land Use Plan (ALUP) extends beyond the City's designated airport specific plan area, and includes land under City and County jurisdiction. Proposed specific plans and amendments to the General Plan and zoning must be referred to the ALUC for a compatibility determination. The ALUC uses its plan as a basis for those determinations. A four-fifths vote of the City Council and certain findings are required for the City to override a finding of incompatibility. The City's General Plan calls for consistency with the Airport Land Use Plan. In June 2002, the ALUC adopted major amendments to its 1970s-vintage plan. The amendments significantly reduced the number of residential units that could be built in the areas subject to the plan. In most areas, the plan limits residential density to six dwellings per acre, well below densities targeted by City plans. For example, the number of units planned for the Margarita Area had to be reduced from 1,100 dwellings to 870 dwellings. Following the ALUC's action, the City began to amend the Airport, Margarita and Orcutt Expansion Areas to reflect the amended ALUP, and also amended the Zoning Regulations (as part of the proposed commercial zoning update). According to State law, the City also must make its General Plan conform to the amended ALUP, or create a special override. That task is expected to extend through 2004. The main issues are anticipated to involve infill housing, uses that concentrate on young or elderly occupants (such as schools and residential care facilities), and the provision of level, open areas that can serve as emergency landing sites. Density Bonus The Affordable Housing Incentives allow a residential density bonus of at least 25 percent for developers who build five or more dwellings with at least 20 percent of those units sold or rented. at prices affordable to low- or moderate-income people, or at least 10 percent of the units for those in the very-low income category. Housing developments with at least 50 percent of the units targeted for persons 62 years or older also qualify for a density bonus. Additional incentives, including density bonuses greater than 25 percent, are available on a negotiable basis in return for adding a higher percentage of affordable units. 108 I San Luis Obispo City Council Draft Housing Element,January 27,2004 Secondary Dwellinz Units In 2003, in response to changes in State law, the City adopted new standards for secondary residential .units, or "granny flats." The new law requires local governments to allow these secondary units administratively, without a public hearing or discretionary approval.. Additionally, the bill requires cities to create standards that will prevent adverse impacts on historic resources. Cities may, however, create a detailed set of property development standards including, but not limited to, parking, height, setback, lot coverage, architectural review, maximum size and standards to prevent adverse impacts on historic preservation sites. San Leis Obispo's secondary dwelling units (SDU) ordinance modifies or eliminates the previous use permit requirement and discretionary review for SDUs, and allows attached or detached SDUs on any legal, conforming and residentially zoned lot. Under the new provisions, SDUs require only one parking space, and are reviewed by the City's planning staff to ensure architectural compatibility. SDUs must conform to applicable zoning regulations such as height, yards, parking and building coverage, and are.limited to a maximum floor area of 450 square feet. Performance standards to ensure neighborhood compatibility also were included in the amended SDU regulations. SDUs are. treated as an additional unit but are not taken into consideration when calculating total allowed density on a site. Beginning in 2003, SDUs are charged developmentimpact fees as a"multi-family dwelling." Manufactured and Modular Housing.Mobile Homes and Mobile Home Parks Manufactured, modular and mobile homes offer economical alternatives to conventional, "stick- built" housing. Manufactured homes are those built entirely in a factory under Federal building codes administered by the U.S. Department .Housing and Urban Development (HUD). Manufactured homes are then transported to the site as single- or multi-section homes and installed on site. On-site additions, such as garages, decks and porches, add to the attractiveness of the homes and must be built to local building codes. Modular housing describes factory-built homes manufactured specifically to the State, local or regional construction code requirements wherever the home will be located. As with manufactured housing, the modular homes are transported to their sites and installed. Mobile home is the term used for factory-built housing produced before June 15, 1976, when the HUD construction codes took effect. Other types of manufactured housing include panelized and pre-cut homes, in which factory-built homes are shipped to the site in panels or as pre-cut"kits"for site assembly. Industry advances in quality and design, as well as affordability, dramatically increased the popularity of these housing types in the late 1990s. In 2000, according to the Manufactured Housing Institute, 22 million Americans (about eight percent of the U.S. population) lived fulltime in 10 million manufactured homes. In 2001 the industry shipped over 193,000 homes from 275 manufacturing facilities nationwide. A manufactured home can cost anywhere from one-third to one-half the cost of a conventional house. Architecturally, manufactured homes include details and features that make the homes compatible with most residential neighborhoods 109 San Luis Obispo City Council Draft Housing Element,January 27,2004 and communities. In 2003 California Department of Finance figures show that San Luis Obispo had 1,501 mobile homes, or about 7.6 percent of the City's housing stock. Mobile homes, placed on permanent foundations and located outside mobile home parks, and manufactured (modular) housing are treated the same as conventional site-built housing under the City's zoning, subdivision and architectural review requirements. Therefore, all residentially zoned land is available for some type of manufactured housing. Mobile-home parks are allowed with use-permit approval in all residential zones. The City has few areas suitable for new, large mobile-home parks or for the expansion of existing parks. However, expansion areas could accommodate mobile home parks once they are annexed. e)Architectural Review Architectural review is required for all residential developments, except individual built, single- family dwellings. The exception for single-family dwellings does not apply: (1) when architectural review is required as a condition of a subdivision, use permit or other discretionary entitlement; (2) when a developer proposes to construct three or more units; (3) when the City's Community Development Director determines the site is sensitive as set forth in the procedures document ("sensitive sites" shall include, but not be limited to, open space zoning areas designated by resolution of the planning commission, architectural review commission or council); (4) where the scale or character of a proposed dwelling contrasts significantly with adjacent or neighboring structures; and (5) where any required parking spaces that are covered are converted to another use and replacement parking is proposed. San Luis Obispo has adopted Community Design Guidelines that describe the community's expectations and preferences for the quality and character of new developments. The Guidelines encourage design variety and innovation, and are intended to preserve San Luis Obispo's distinctive character and sense of history. Depending upon the type and scale of the project, architectural review can add, on the average, from two to four months of review time, including study, public hearings and revisions. The additional holding time, from a development standpoint, adds to development costs (interest costs, design/architectural fees, construction delays) that are then passed through to housing buyers. For large residential projects, this cost impact on an individual dwelling is lessened; however, on small projects, the cost can be a significant factor in the overall purchase price of a home. Most of the City's neighborhoods are an eclectic mix of architectural styles and character. In many cases; small residential infill projects of four units or less can be integrated into neighborhoods, on lots already zoned for residential use, without posing significant architectural design or compatibility issues. The housing would need to comply with all zoning standards, including setbacks, building height and lot coverage.. By exempting small residential projects from architectural review, the City could help reduce development costs and improve the economic feasibility of constructing small detached or attached dwellings. On historic 110 San Luis Obispo City Council Draft Housing Element,January 27,2004 I properties, or where site constraints such as creeks, steep hillsides or lot shape required special consideration, architectural review of the "sensitive site" may be appropriate. To help reduce development costs, this Element calls for an amendment to the Municipal Code to exempt small residential projects (four or less dwellings not on a sensitive site) from Architectural Review Commission review. Most of these developments would be eligible for less costly and time- consuming staff level architectural review. f)Building and Zoning Code Enforcement Code enforcement focuses mainly on zoning or building code violations that adversely affect public health or safety, and on preserving neighborhoods. The code enforcement program includes education, mitigation and prosecution issues, and has two components: 1) building and zoning code.enforcement, and 2)neighborhood services. In addition to ensuring that new development is designed and constructed in conformance with City standards for quality and safety,,the Community Development Department also ensure that property and land uses conform to those standards over time. The Department enforces the City's land use, development, building and sign regulations through its Code Enforcement Program. The Code Enforcement Coordinator is responsible for the resolution of any violations. Table C-6 summarizes Code Enforcement complaints received in 2001.. The program is complaint-driven and handles about 400 cases per year. Upon receipt of a complaint, a building inspector makes a preliminary site visit to verify the existence of a violation, and informs the Code Enforcement Coordinator about conditions at the site. If a violation exists, a "Notice of Violation" is issued and the necessary steps are taken to resolve the problem. More complicated cases are set for abatement proceedings or, in some cases, criminal prosecution. Complaints about neighborhood overcrowding and illegal construction have accounted for the majority of City building and zoning code enforcement cases. The illegal conversion of garages, sheds, attics and shops to rental housing has contributed to substandard housing, parking violations, property maintenance complaints and other housing concerns. The City notifies property owners in writing of specific conditions that must be addressed, and provides clear direction on how to correct the violations. City staffers work with property owners to determine whether the illegal construction can be upgraded and remain in place, or if steps are necessary to remove any illegal or unsafe construction. Of these enforcement actions, less than one percent actually resulted in displacing the current occupant. 111 San Luis Obispo City Council Draft Housing Element,January 27,2004 Table C-6 Code Enforcement Cases, 2001 City of San Luis Obispo TYPES OF COMPLAINTS Number of Cases Garage Conversion 31 Substandard Housing 30 High-Occupancy Residential Use 9 Other 98 Signs 112 Converted Living Space 10 Home Occupations 15 Fence Height 12 Animals 2 Trailers 0 Noise 4 Fraternities/Soronnes 4 Use In Wrong Zone 3 Building Code Violations 68 No Building Permit 78 TOTAL COMPLAINTS RECEIVED 476* Source: City of San Luis Obispo,Community Development Department. *Established cases may have multiple complaints. Neighborhood Services. In 1999 the Office of Neighborhood Services (ONS) was established. It is administered through the San Luis Obispo Police Department, and enforces Noise Regulations, residential parking districts and Property Maintenance Standards. These standards preserve the quality, character and condition of neighborhoods, and address the following issues related to residential and neighborhood preservation: screening of storage and recreational vehicles, front yard paving, use and maintenance of roofs, fencing, maintenance of buildings or grounds and graffiti. In 2002 the ONS issued 2,777 noise violations and 504 notices for property maintenance violations. Through public information, community and educational programs, ONS works to improve communications between students and other neighborhood groups, and sponsors special 112 San Luis Obispo City Council Draft Housing Element,January 27,2004 neighborhood events, such as Good Neighbor Day and Neighborhood Cooperation Week. The SNAP (Student-Neighborhood Assistance Program) and WIN (Working to Improve Neighborhoods) Programs engage community volunteers, neighborhood groups and city staffers in a working partnership to preserve and enhance neighborhoods. Construction Codes San Luis Obispo's construction codes are, with few exceptions, uniform codes enacted by the State legislature and used throughout the State. They set forth health and safety standards for structures,plumbing, electrical and fire prevention. The cost of meeting State construction codes — laws intended to make new housing safer, stronger, more energy efficient and resistant to fire and earthquake hazards — is ultimately passed on to housing consumers. In the long term, many building standards can reduce ongoing housing costs through lower utility bills and reduced insurance premiums. In some cases,San Luis Obispo has adopted more stringent construction codes than mandated by the State. Local Building Code amendments that could affect housing cost include the following: 1. Seismic Strengthening of Unreinforced Masonry (URN) Buildings. There are 126 unreinforced masonry buildings in San Luis Obispo, many of them historic. Of these, 10 include dwellings. All URM buildings have undergone structural analyses as required by State law. City regulations require all URM buildings to be seismically strengthened by 2017. Strengthening involves improvements to building foundations, walls and roofs to resist catastrophic damage and loss of life during an earthquake. Such improvements can be expensive, ranging in cost from $50-$65 per square foot in 2003. Construction permit and planning fees for URM replacement buildings are waived, and fees spent on seismic analysis are credited toward architectural review, plan review or building permit fees for URM strengthening projects. Pursuant to Council Resolution No. 8663 (1997 Series) establishing an incentive program for URM strengthening, City offered to provide technical assistance in forming a"voluntary assessment district" to assist financing of URM improvements and fire sprinkler installation. Due to a lack of sufficient property owner interest, the volunteer assessment district approach was not implemented. URM strengthening or replacement costs may exceed property owners' financial capacity and/ or force closure of buildings that do not generate sufficient income to support the improvement costs. Affordable downtown housing may be particularly vulnerable in this regard Additional financial assistance and/or incentives may be necessary to meet the 2017 deadline and to preserve or provide affordable downtown housing. The City intends to seek State and Federal grants as part of its 2003-2008 housing program initiatives to address this important issue. 2. Construction in the downtown commercial fire zone must be of 5/8-inch Type X gypsum wallboard, unless the building is equipped with an automatic fire extinguishing system 113 San Luis Obispo City Council Draft Housing Element,January 27,2004 throughout. Additional material cost of the wallboard is not significant. 3. Due to expansive soils in the San Luis Obispo area, all residential foundations and slabs must meet more stringent requirements,unless a soils report is provided to show that such upgrades are not needed. The estimated cost for the foundation upgrade is approximately $2,500 per dwelling. 4. Wood shake and shingle roofing materials are prohibited, unless the material is listed as a Class A Assembly. Adopted by ordinance in 1983,this law is intended to reduce fire hazards and the potential for loss of life and property from a major fire in the City. The ordinance differs from State and County regulations in that they allow wood-shake roofing that meets a minimum Class-C rating. Additional constriction costs,if any, would depend on the builder's choice of a roofing material. 5. An automatic fire extinguishing system is required in all new buildings except most buildings that are 1,000 square feet or less. Initially adopted in 1990, the ordinance requiring fire sprinklers in all residential occupancies is intended to reduce fire hazards to life and property, to allow development where fire-flow, access or setback deficiencies might otherwise preclude it, and to reduce ongoing public costs of fire suppression. The fire sprinkler requirement adds about $3.00 per square foot to the cost of construction, or $6,000 for a 2,000-square-foot home. The added cost of fire sprinklers may be offset or recovered in the long-term since: 1) Most insurance companies have reduced homeowner fire insurance rates for homes with fire sprinklers. 2) Fire sprinklers add value to a home, and all or a portion of the costs can be recovered upon resale. 3) During development, additional cost-saving allowances are made for buildings with fire sprinklers (e.g.,longer distances between fire hydrants serving a development; reduced vehicle access requirements). 4) Fire-flow requirements are reduced by 50 percent, allowing the use of existing water mains in most cases. This allows infill development where infrastructure deficiencies might have otherwise prevented it. Site Improvement Requirements The City may require on- or off-site improvements such as streets, utilities, traffic signals and landscaping as a condition of use permit, variance, subdivision or other land-use approval. Dedication of right-of-way, public transit facilities, easements or access rights also may be required. These improvements add costs that are usually passed on to the housing consumer. 114 San Luis Obispo City Council Draft Housing Element,January 27,2004 This Housing Element includes policies which require the City to consider and minimize the costs of imposing additional requirements on housing projects beyond those required by State law, or necessary for public health, safety or welfare, and to periodically evaluate these requirements to determine if they are necessary to protect the public's health, safety or welfare. Americans with-Disabilities Act The Fair Housing Act of 1998 and the Americans with Disabilities Act (ADA) are Federal laws intended to help provide safe and accessible housing. The City is responsible for enforcing State accessibility regulations (California Building Standards Code, Part 2, Title 24) when evaluating new construction. Accessibility requirements of the California Building Code are similar to Federal regulations and mandate that new developments be designed to ensure full accessibility and use by the physically disabled. Single-family houses are exempt from these regulations. Compliance with building code requirements may increase the cost of multi-family housing production and rehabilitation. However, these regulations provide minimum standards that the City must comply with in order to ensure safety and the appropriate levels of accessibility in new developments. Difficult compliance situations may be reviewed by a city advisory body appointed by the City Council to consider such matters. Non-conformin¢Uses and Structures Some dwellings are subject to premature deterioration and demolition because of their legal,non- conforming status. A legal, non-conforming use or structure is one that was established with permits, but is no longer allowed and could not be replaced under the current zoning regulations. Examples include housing as a principal use in a.manufacturing zone. Traditionally, lenders and insurance carriers avoid lending or insuring project improvements for such non-conforming dwellings. An estimated 175 dwellings are considered non-conforming because of their location in the manufacturing or service-commercial zones. Housing Element programs address this issue by encouraging the conservation of non-conforming housing, and through programs that enable low- income homeowners to rehabilitate substandard housing through low-interest loans or grants. g) Processing and Permit Procedures The development review process adds time and costs to a building project. The City's development review procedures are designed to protect public health and safety, to simplify and expedite the review process whenever possible, and to ensure that new development meets State and local development standards within time limits set by State law. The Permit Streamlining Act requires final City action within three months of adopting a .negative declaration or categorical exemption for a project, and within six months of the date a final Environmental Impact Report (EIR)is certified fora project. 115 San Luis Obispo City Council Draft Housing,Element,January 27,2004 For most minor or relatively simple items which are exempt from environmental review, such as administrative use permits, minor or incidental architectural review, minor subdivisions, and lot line adjustments; the processing time from submittal to final action lasts approximately four to six weeks. In San Luis Obispo, architectural review is required for multi-family projects and residential subdivisions. More complex planning items requiring initial environmental studies such as architectural review of new commercial, industrial and residential projects, conditional use permits and variances (Planning Commission), planned development/rezoning or standard subdivisions typically require eight to 12 weeks. The City's most complex planning items include general plan amendments, rezoning, annexations and zoning regulations text amendments. Any development project that requires an EM can take six months or longer from the date an application is filed to final City action. Development review procedures, such as public notices, hearings and environmental reviews,are mandated by State law and also add to the time needed for the approval of new housing projects. Since 1994 the City has revised its zoning and subdivision requirements to simplify and speed up development approvals. For housing developers, time is money. Efforts to reduce the time required to process development applications can result in lower costs to the housing consumer. Examples of permit streamlining actions the City has taken include: • House relocation no longer requires a conditional use permit. • Demolition or relocation of most buildings 50 years or older, but not historically listed, no longer requires Cultural Heritage Committee historic significance review. • Minor housing additions, remodels and seismic retrofits may be approved by City staff as"minor or incidental" architectural review. h) Development fees Application and permit fees Local governments levy fees and assessments to cover the cost of processing development applications and permits, and to cover the cost of services. These fees help ensure high-quality housing development and the provision of adequate public facilities and services. Development fees are typically passed through to the consumer in the form of higher rents or sales prices for new housing. Consequently, City fees :increase development costs and affect housing affordability. One method of evaluating whether San Luis Obispo's fees are excessive or pose barriers to housing development is to compare its fees to those in other nearby jurisdictions. In 2003 the City surveyed development fees for the County's seven cities, and for San Luis Obispo County. The City also compared fees that the various jurisdictions would charge for a commercial development and two residential development scenarios: a new.2,000-square-foot house with a 500- square-foot garage, and a 10-lot, single-family residential subdivision. The survey showed that for most development fees, San Luis Obispo is significantly higher than the other county jurisdictions. Development fees are summarized in Table C-7, and comparative 116 San Luis Obispo City Council Draft Housing Element,January 27,2004 development fees are shown for the development scenarios in Figure C-3. In most cases, City development fees assume full cost recovery for actual costs to deliver the planning, building and engineering services. Development review fees are updated annually, based on changes in the Consumer Price Index. Survey results show that San Luis Obispo development fees are generally higher than those of other jurisdictions in San Luis Obispo County. However, the City waives most development fees for affordable housing. City policies already exempt very low- and low-income housing from most development review and permit fees. Housing Element Program 2.3.6 and 2.3.7 call for the City to seek additional funding sources to help offset development-related City fees for residential projects that include affordability guarantees for very-low, low- and moderate-income households. Table C-7 Com arative Developwent Fee Summary, 2003' Fees Charged Arroyo Atascadero Grover Morro Paso Pismo San Luis SLO Grande Beach Bay Robles Beach Obispo county Annexation/ Cost+24% 2.500 3,000 Cost: 7,243 Prezoning +cost hrl . Appeals to 195 200 150 50%fee 100 500 0 484 Council/Board Architectural 415 362 2,187 Review Full Architectural 220 851 Review,Minor or Incidental Certificate of 650 150 513 200 1,239 796 Comnliance Cotulominium 2.205 1,075 4•000 3,593 Conversion +hrly fee EIR Contract 15%of EIR 25%of Cost Cost+ 25%of +hrly fee +hrly fix EIR +hrly fee 30% IHR +hrly fee +hrly fee Environmental 15%of 312 1,500 520 11994 25%of Review/Initial EIR EEK Stud +hrly fee +hrly fee General Plan 1,370 850 613 1,000 800 6.000 5 4,000 Amendment +cost +cost note; Historic 0 Preservation Review CHC Lot Line 800 325 398 539 200 1,140 600 AdJustment Lot Merger 605 55 41 188 Planned 1,155 512 1,200 3,295 6,783 Development Permit/Rezoning PD Amt 1.155 482 600 1+405 Specific Plan— 4,000 Residential 117 San Luis Obispo City Council Draft Housing Element,January 27,2004 Specific Plan 1,155 Cost 800 Cost 5,825 4.000 Amendment +24% +hrly fee note Std 550 200 4,223 400 Abandonment Tentative Parcel 1,000 865 521 1,282+ 1.300 1,800 5,321+ 2,200 map 102 per 177 per lot note' lot Tent.Parcel Map 1,000 50% 2.070 Amendment Tentative Tract 1,000 865 521 1,5394- 1,300 1,805+ 6,898+ 2,900 map 205 per 115 per lot 177 per lot note lot Use Permit, 150 190 295 235 656 Administrative Use Permit, 1;205 550 548 1,200 2,503 1,450 'or M.0 ot ban LAas VDispo,Commumty Development attment Notes: 'Table does not list all planning fees. Only those fees applicable to residential development are included. Fees have been rounded. 245%of full cost of time and materials 'With Initial Study 118 San Luis Obispo City Council Draft Housing Element,January 27,2004 ]Figure C-3 Comparison of Development.Fees for a 2,000-Square-Foot, Single-Famili House, 20031 57.005 58.000 AM- sol, Mso AMSCOM Mop Glenda Poo Robles Pismo Beed GM8r Beean coumy of SLA MM. Bey Sen LuhOdepo Sen LuL9 Ob180b 1 2 Source: City of San Luis Obispo,Community Development Department ISan Luis Obispo 1 shows fees existing in April 2003;San Luis Obispo 2 reflects fee increase that took effect July 2003. Development fees include planning application fees, building plan check and permit fees, and Fire Department and Public Works Department plan check and inspection fees. For a 2,000- square foot-house with a 500-square-foot garage and a construction value of $168,000, development fees in San Luis Obispo in July 2003 totaled $7,496, or about 4.4 percent of construction value. For the 10-lot, single-family residential subdivision, development fees totaled $110,864, or 6.6 percent of construction valuation. By comparison, development fees for the same hypothetical developments in the County of San Luis Obispo were$3,531 and$32,590, respectively,plus hourly costs. Development impact fees Like many California cities, San Luis Obispo levies impact fees to help pay for the public costs of new development. San Luis Obispo policies State that existing residents should not bear the costs of new development. Impact fees ensure that new development pays its fair share of the cost of constructing the water and sewer facilities, streets and other improvements necessary to serve it. Impact fees are based solely on the capital costs attributable to new development. In 119 San Luis Obispo City Council Draft Housing Element,January 27,2004 2003 the impact fees and approximate costs are shown in Table C-8. Table C-8 Residential Development Impact Fees per Dwelling Unit,July 2003 City of San Luis Obispo Impact Fee S ecific Plan Area Surcharge Development IDU* Citywide Airport, Dalidio, Irish Rills Orcutt Type Margarita, Madonna, and Edna- McBride Islay** Water Single-Family 1.0 $8,259 $ 764 -- — -- Multi-Family 0.8 6,607 611 — -- — Mobile Home 0.6 4,955 458 -- — — WasteWater Single-Family 1.0 $3,314 1 $746 1 $212 $376 $1,730 Multi-Family0.8 2,651 583 170 301 1,384 Mobile Home 0.6 1,988 448 1 127 226 1,038 Transportation Single-Family 1.0 $1,491 — — — -- Multi-Family 1.0 1,323 -- — -- — Source: City of San Luis Obispo,Community Development Department *EDU means Equivalent Density Units,multiplied times impact fee. **Water surcharge does not apply in Edna-Islay Area i) Infrastructure The City is committed to living within its resources, while planning to meet the future resource needs of its citizens. Residential development requires that adequate roads, drainage, water, sewer, fire protection and other public services be available. Generally, the developer provides facilities within or next to the development site, while the City is responsible for the facilities that serve a larger area. For example, the City provides arterial streets, a sewer treatment plant and main collection pipes, and water reservoirs, a treatment plant and main pipes. When an area is subdivided, the subdivider installs local roads and utility lines. Historically, the costs of extending municipal services to support new development were offset by utility customers and taxpayers. Like many cities, San Luis Obispo requires developers to pay for the increased capacity of citywide facilities needed to serve new development. The developer's costs for installing public facilities within a development and for funding citywide facilities are passed on to occupants of the new housing units. 120 San Luis Obispo City Council Draft Housing Element,January 27,2004 Most sites within the City have streets and utility lines nearby, so they can be developed without significant extensions. However, expansion areas at the edge of the City will need service extensions. A specific plan is required for each major expansion area, and a development plan for each minor expansion area. These plans will address phasing of development and services, subject to availability of additional water resources. Increased water service capacity and transportation network improvements are needed before housing can be built in major expansion areas. The Land Use Element requires that before land is annexed to accommodate new development, the City should adopt a plan for how the necessary public services and utilities will be financed and provided. For major expansion areas, actual development can occur only when the City is able to provide adequate services for the annexed area as well as for existing and potential development elsewhere within the City. Water Sources The City of San Luis Obispo utilizes three water supply sources to meet the community's water demand. Santa Margarita Lake (also referred to as Salinas Reservoir), Whale Rock Reservoir and groundwater. The adopted safe annual yield from these three sources for 2003 is 7,510 acre-feet. To achieve the planned build-out population, the City's projected water demand is 9,096 acre- feet per year (afy). An additional 1,806 acre-feet is needed to achieve the City's planned build- out population of 57,200 persons. Table C-9 shows water available for new residential development in 2003, based on present per capita water demand for all uses and safe annual yield. Table C-9 Water Available for Residential Development, 2003 City of San Luis Obis o Year Population Present Water Demand Safe Annual Yield Water Available in .@ 145 gped 2003 for Allocation 2003 44,359 72N a f. 7,510 of 306 a.f. Sw= City of san Llis Obispo Utftm' Department lindudes reductions due to siltation to daze According to Water Management Element Policy 8.1.3, one-half of the water available for new development will serve intensification and infill development within existing City limits as of July 1994, and 153 acre-feet is available to serve development in expansion areas. One of the Council's major goals is to secure additional long-term water supplies to meet future population needs. The City is proceeding with the Water Reuse Project, which has the potential to be accomplished soonest. Projected water deliveries will begin in late 2004. Following initial construction, recycled water will offset approximately 130 acre-feet per year of current potable water used for irrigation. The project has a total potential yield of 1,200 acre-feet per year. Possible new water.sources that the City is actively pursuing are summarized in Table C-10. 121 San Luis Obispo City Council Draft Housing Element,January 27,2004 Table C-10 Possible New Water Sources, 2002 - 2022 City of San Luis Obispo Source Earliest Date Potential Added Available3 Yield Dwellings' Water Reuse 2004 130 273 Water Conservation 2005 340 714 Additional Groundwater 2006 500 1,050 Additional water 970 afy 2,037 potentially available in planning period Balance of Water Reuse 2008 1,070 2,247 Nacimiento Pipeline 2008 3,380 7,098 Salinas Reservoir 2010 1,650 3,465 Expansion Desalination 2008 n/a n/a TOTALS -- 7,070 14,847 Source: City of San Luis Obispo,Utilities Department City is pursuing multiple water projects through preliminary design stages. Not all will be implemented. Implementation will depend upon feasibility,needs and cost. 2130 acre-feet available initially through recycling to augment potable water supply; additional amounts passible up to 1.200 afy,depending upon use of recycled water in Margarita/Airport areas. 'New water sources dependent upon funding availability. `Amounts in acre-feet per year. One acre-foot equals 325,851 gallons. 50ne acre-foot will serve three dwellings per year in San Luis Obispo;assumes 70% of new sources used for residential development,30%for commercial uses. Wastewater Treatment(Sewer) The City's current wastewater treatment facility has a design capacity of 16 million gallons per day (mgd). According to the City's Utility Department, this is adequate capacity to meet current needs, plus residential growth anticipated during the planning period. The City is planning for a major plant upgrade in 2008, which will expand water treatment capacity to handle the General Plan anticipated growth,or a population of 57,200 by the year 2022. 122 San Luis Obispo City Council Draft Housing Element,January 27,2004 j) Public Services Police and Fire In 2003, Police Department staffing level is slightly below the standard set by the City of San Luis Obispo, as measured by the percentage of available time for sworn officers to respond to calls. The standard calls for a minimum 30% of sworn officers to be available at any given time. According to San Luis Obispo Police Department, the percentage of available time has averaged 25 percent for the previous quarter, and while Cal Poly University is in regular session, typically stays below the 30 percent standard. According to the National Fire Protection Association, the ratio of emergency services personnel (firefighters and emergency medical services) should not be less than 1/1,000 residents to maintain public safety. San Luis Obispo's peak emergency service population, due to daytime employment (including Cal Poly University) is estimated to be 70,000 persons, requiring 70 firefighter/EMT personnel to meet the desired service ratio. The maximum number of city firefighters/EMTs is 45, or a daytime service ratio of about 0.6 emergency personnel per resident. Increased residential development will increase the demand for emergency services and raise city costs for police and fire services. Community needs for increased police and fire services resulting from residential growth will be met through, development impact fees, environmental impact mitigation imposed at the time of development,or through user fees. k)Schools Grade school enrollment in San Luis Obispo has declined in recent years. San Luis Coastal Unified School District's enrollment in San Luis Obispo schools, as of June 2003, is 4,317 students. Enrollment is down by 176 students from last school year. According to District studies, new residential development generates 0.65 school child per dwelling. The District estimates that one or possibly two additional school sites will be needed to serve planned residential growth in the southern part of the City. The Margarita and Orcutt.Area Specific Plans are expected to include potential elementary school sites. Due to district budget constraints, new dwellings will have serious adverse consequences for school staffing, facilities and programs unless new development adequately mitigates the adverse impact on school facilities. 2. Non-governmental Constraints a) Land Costs Landis the second largest component in the cost of new housing, accounting for over 20 percent of development costs. Because land costs are so high, it is difficult to build affordable housing if the project involves purchasing land at today's prices. Land costs directly affect the cost of housing. In tum, land values are determined by a number of factors. In terms of residential constraints, the most important of these is land availability and permitted residential density. As 123 San Luis Obispo City Council Draft Housing Element,January 27,2004 land becomes scarcer, its price increases. Other factors being equal, the more residential units allowed, the higher the land value. In 2003 the cost of an undeveloped, average-size, single-family residential lot in San Luis Obispo was estimated by members of the Board of Realtors multiple listing service to be between $250,000 and $375,000, depending on its size and location. By contrast, in 1992 the cost of a typical single-family residential lot in San Luis Obispo ranged from $140,000 to $200,000, an increase of about 88 percent when compared to the 2003 figures. The average land cost per square foot for 10 vacant, single-family (R-1 zone) lots sold in San Luis Obispo in 2002 was $31, and ranged from a low of about $17 to a high of $41 per square foot. In 1993 the cost for undeveloped land suitable for housing ranged from $8 to $12 per square foot. The situation for vacant, multi-family zoned residential land is similar. Between 2000 and 2003, sales prices for vacant land suitable for multi-family housing ranged from $8 to $43 per square foot, averaging about$23 per square foot. Buoyed by record-low interest rates, the demand for residential real estate has continued to be very strong since 2000, despite a slowdown in other city and county economic sectors. Land suitable for residential development within City limits and in expansion areas adjacent to the City is typically priced to reflect its "highest and best use." b) Construction Costs Technological advances in home building have increased efficiency and reduced the proportional costs of labor and materials. Nationally, labor and materials accounted for 69 percent of the cost of a new home in 1949. By 1989, that percentage had dropped to 53 percent (National Association of Home Builders). Reduced construction costs have, however, been more than offset by increased land costs. According to the City's building official, the construction value of an average Type V - wood frame residential construction in 2003 is $83 per square foot, up from $64.80 per square foot in 1993. For a typical, 1,850-square-foot detached house with a garage on a standard-sized lot in San Luis Obispo, total development cost in 2003 -- including land, construction, and city fees—is approximately $354,275. Estimated land cost accounts for 53 percent of the total cost, construction about 43 percent,and city fees around four percent. b) Availability and cost of financing Mortgage interest rates significantly affect housing affordability. As interest rates increase,fewer buyers can afford to purchase a home. As rates decrease, the number of potential homebuyers increases. In 2003 mortgage interest rates fora conventional, 30-year fixed loan range from 5:50 to 5.9 percent, and 15-year and adjustable rate mortgages are 515 percent and 4.75 percent, respectively. 124 San Luis Obispo City Council Draft Housing Element,January 27,2004 A wide variety of loan packages and terms are available, making financing accessible for most homebuyers with good credit and moderate- to above-moderate incomes. Although low interest rates in 2003 have made housing more affordable than in recent years, the necessary down payment still can pose an insurmountable obstacle — particularly to first-time homebuyers. Lenders typically prefer a 20-percent down payment on a mortgage loan. Prospective buyers who might be able to support an 80-percent loan, often do not have the financial resources to make the required down payment. A median-priced home in San Luis Obispo costs $442,500 (SLO Board of Realtors, May 2003), requiring an $88,500 down payment to get into a new house. Lenders will sometimes loan up to 90 percent of the asking price, but an applicant's credit is much more closely scrutinized, and monthly payments and monthly income requirements are significantly higher. Consequently, financing can pose a major obstacle for first-time or moderate-income homebuyers,even for those who might otherwise qualify for a conventional loan. Interest rates are determined by national economic policies and conditions, and there is little that local governments can do to affect interest.rates. Cities may,however, offer interest-rate buy- downs,gap financing or other programs to expand home ownership opportunities for low-and moderate-income and first-time homebuyers. Although mortgage interest rates have remained relatively low since 2001,rates can change quickly. In mid-2003 interest rates are rising slowly and appear likely to return to more normal levels as the national economy rebounds in 2004. d)Insurance Costs Insurance costs have become an important constraint to building affordable housing. Construction liability insurance, needed by builders and required by lenders, has become difficult to obtain in California and when available, is extremely expensive. According to the Homebuilders Association of the Central Coast, liability insurance costs can equal about two percent of a unit's selling price, or$6,000 for a$300,000 condominium. In part, insurance cost increases resulted from unprecedented construction defect litigation, particularly in California, in the 1990s. Most of that litigation focused on residential condominiums_. Condominium construction, a major type of new housing in San Luis Obispo in the 1980s, is one of the most effective approaches for providing higher-density, ownership housing for moderate-income buyers. Condominium construction fell dramatically in the 1990s. According to local builders, this was due in part to construction defect litigation and to high insurance costs. In 2002 Senate Bill 800 (Burton) was signed into law, clarifying the grounds for construction defect lawsuits and limiting builder liability for such actions. In 2003 there appears to be renewed builder and consumer interest in residential condos, and city housing policies promote this housing type. e)Design Expectations Housing preferences have changed dramatically in the last.generation, as shown by a comparison of tract housing built in town around 1960 and tract housing built today. Detached homes are generally larger and include more built-in features and amenities. Even many attached condominiums, which have become owner-occupied "starter" houses, include more indoor space 125 San Luis Obispo City Council Draft Housing Element,January 27,2004 and amenities than older,detached housing. Those seeking homes today are children of the generation that experienced the greatest increase in real house buying power, and they often prefer large, detached homes similar to those in which they were raised. These expectations are often unrealistic given the high cost of living in California when compared with other States, and the relatively high cost of living in San Luis Obispo when compared with other areas. Homebuyers moving to San Luis Obispo from urban areas often enjoy higher median incomes and arrive with substantial equity from selling another home elsewhere. Their buying power, together with the desire for a better life in a smaller city, has fueled the demand for larger, detached homes. f)Investment expectations Investment expectations also can add to the cost of housing. Nationally, Americans place a high value on home ownership because it provides a hedge against inflation and allows us to build substantial equity in a relatively short period of time. Ironically, the favorable tax treatment established to protect home ownership has helped push the cost of housing beyond its value as shelter alone, and has created a competitive marker for real estate as a commodity or financial investment. Home ownership has become an elusive goal for many first-time buyers, as prices increased in response to market expectations. Renters find themselves paying a larger and larger share of their income for housing, as rental properties are resold to a succession of landlords. Many home owners and owners of rental property benefit from.significant tax advantages. In 2003 mortgage interest on loans for both a principal home and a second home is usually deductible for taxpayers, and interest on home equity loans also is usually deductible. In addition, homeowners can defer capital gains resulting from the sale of a house so long as another home is purchased at the same or higher cost, and may avoid paying taxes on capital gains from the sale of a home after the age of 55. Owners of rental property can deduct expenses such as property taxes, mortgage interest payments and maintenance costs. Also, since rental property theoretically depreciates in value over time,owners can deduct part of a property's value each year from their taxable income. While depreciation allowances provide an investment benefit for each successive property owner, they also offer a strong incentive to resell a property once the largest share of depreciation has been taken. The new, higher sales price is then offset by increased rents. Sales commissions, typically ranging from four to six percent of the sales price, also affect housing costs. 3. Regional Housing Need Allocation and Quantified Objectives The City's Regional Housing Needs Allocation (RHNA)as determined by the San Luis Obispo Council of Governments is shown in Table C-11. 126 San Luis Obispo City Council Draft Housing Element,January 27,2004 Table C-11 Regional Housing Need Allocation,January 2001- July 2008 Cit of San Luis Obispo Income Group Number of New Quantified DweIIin Allocated Objectives Very Low 1,484 1,390 Low 844 777 Moderate 870 817 Above Moderate 1,185 1,103 TOTAL 49,383 49087 Sow= City of San Luis Obispo,Community Development Department State housing law (Article 10.6, Section 65583(b)(2) of the California Government Code) recognizes that total housing needs identified for a jurisdiction may exceed available resources and the ability of the jurisdiction to satisfy this need within the context of State and local General Plan requirements. Under these circumstances, a jurisdiction's quantified housing objectives need not be identical to the total housing needs. San Luis Obispo has evaluated its ability to accommodate the RHNA number of 4,383 dwellings by July 2008. Limited water supplies prevent the City from achieving the RHNA number within the planning period The problem is chiefly one of timing, since there is sufficient land suitable for residential development to accommodate the RHNA number within the planning period Planned water supplies will allow this number of dwellings to be achieved over a longer period As shown in Table C-11, the City's quantified objectives are less than the RHNA number. The quantified objectives include: 1) Dwellings built and granted occupancy during the period from January 1, 2001 through July 31, 2003; 2) Dwellings expected to be built and receive occupancies between August 1, 2003 and December 31, 2003 based on current construction inspections; and 3) Potential residential development between January 1, 2004 and July 1, 2008, based on anticipated water supplies; 4) Construction of up to 1,178 dwellings on Cal Poly University-owned land for students, faculty and staff. a) Residential Growth Implications of Achieving Quantified Objectives During the Housing Element planning period from January 1, 2001 to July 1, 2008, the City could accommodate up to 4,087 new dwellings, as shown in Table C-11. Of the total, up to 1,178 units will be located on State-owned land, plus another 2,167 units will be targeted for very-low and low-income households. These units are exempt from the one percent growth 127 San Luis Obispo City Council Draft Housing Element,January 27,2004 target in the Residential Growth Regulations. During the planning period, at least 742 non- exempt units will be developed. The resultant residential growth rate during the planning period is 0.51 percent. This is less than General Plan anticipated residential growth rate of one percent per year. Achieving the quantified objectives is contingent upon the City having adequate funding to undertake the necessary capital improvements for the expanded water conservation and groundwater programs in 2005 and 2006 that will add 840 acre-feet and the capacity to serve 1,764 additional households, and upon private development decisions and economic factors outside of city control. And while the attainment of these housing objectives is theoretically possible given available land resources and expected water and sewer capacity, it is highly unlikely these numbers of units will actually be produced without significant public subsidies. In 2001,Department of Finance figures estimate the total number of city housing units at 19,355. The construction of 742 moderate and above-moderate units would represent about 15% of the City's planned growth capacity between 2001 and 2022 (4,945 units), the anticipated build out date. As shown in Figure C-4,residential construction is cyclical following regional and national trends. Between 1980 and 2003, city housing production averaged 196 units per year. This average rate could increase to up to 225 units per year after 2004, and the City could still expect to reach buildout in the anticipated timeframe. During the 7 th year planning period,the City will grow at a rate of about 99 non-exempt units per year. The City recognizes its responsibility to reduce constraints to achieving housing needs and to expand housing opportunities for all income groups, to the extent physical, environmental and financial limits allow. The City intends to help residents secure safe, good-quality, affordable housing, and to meet regional housing targets in the same percentage allocations by income group as prescribed in the RHNA Plan. To help achieve this goal, the City intends to encourage housing production by zoning adequate sites for future housing, securing the necessary water resources and sewer capacity to accommodate new development, and by exempting moderate- income housing from residential growth regulations to encourage affordable housing. b) Water Supply Constraints In 2003 the City's safe annual yield is 7,510 acre-feet. Estimated water demand for 2003, based on an adopted per capita water use rate of 145 gallons per person per day, was 7,204 acre-feet, leaving 306 acre-feet per year (afy) available for new development. With completion of the initial phase Water Reuse Project expected in 2004, an additional 130 afy will be available initially for new development. Based on past water use, it can be anticipated that seventy percent of available water supplies will be used for residential development, and 30 percent for commercial uses. 128 San Luis Obispo City Council Draft Housing Element,January 27,2004 Table C-12 Maximum Residential Development Potential Based on Anticipated Water Supplies, January 2003 —July 2008 City of San Luis Obispo SourceEarliest Acre Feet/Year Potential Dwellings3 Available Difference between current 2003 306 643 use and safe annual 4eld Water Reuse Projece 2004 130 273 Water Conservation 2005 340 714 Additional Groundwater 2006 500 1,050 Supply Subtotals n/a 1,276 2,680 Water required for housing built between 1/01/03- n/a [192] n/a 12/31/03° Available Water Supply for Residential Development, n/a 19084 2,276 maximum#of 1/1/047/1/08 units possible5 Source: 2003 Water Resources Status Report,City of San Luis Obispo,Utilities Department City is pursuing multiple water projects through design stage. Implementation depends on cost and need. 2130 acre-feet available in planning period Up to 1,070 afy additional as Margarita/Airport Areas develop and can use recycled water. 370% of available water used for housing; 30% for commercial uses. One acre-feedyear will supply enough water for three dwellings. Between 1/1/03 and 12/31/03,583 in-city dwellings are anticipated, @ .33 afy/dwelling= 192 afy. 51,094 afy X 0.7%X 3=2,276 dwelling units possible between 1/1/04 and 7/1/08. Steps the City has taken to secure additional water supplies include: • Water reuse became economical in 1994 after the City completed a$25 million upgrade of the Water Reclamation Facility to comply with requirements for discharge to San Luis Obispo Creek. The tertiary treatment required for discharge to the creek produces recycled water that can be used to irrigate parks, playgrounds, agricultural crops and landscaping. The recycled water also may be used for industrial processes, construction and many other non-potable uses. • In 2003 consultant proposals were evaluated for the engineering work necessary to increase the use of groundwater resources. The schedule for the project envisions this new source fully available in the summer of 2005. The goal of the project will be to increase groundwater production by approximately 500 acre-feet per year. 129 San Luis Obispo City Council Draft Housing Element,January 27,2004 • The 2003-05 Financial Plan includes an expanded Water Conservation Program to be implemented beginning in the 2003-04 fiscal (does everyone know what your fiscal year is — i.e., ends Dec. 31 or June 30?) year, with the potential to reduce overall water use by approximately 340 acre-feet per year, making this amount available for additional development. • The County of San Luis Obispo is administering the Nacimiento Pipeline Project. The City has requested 3,380 acre-feet for planning purposes. In July 2003 the revised Environmental Impact Report is being evaluated, and the document is scheduled for certification by the County Board of Supervisors in.late 2003. • The City of San Luis Obispo has been pursuing the Sahnas'Reservoir Expansion Project for over 11 years. The decision to go forward with project development is on hold, pending a judgment by the participating jurisdictions (County of San Luis Obispo, Paso Robles, Atascadero and San Luis Obispo)on developing the Nacimiento Pipeline Project. c) Land Resources and Development.Rate The City is actively pursuing annexation of two major expansion areas that will, upon completion, add approximately 1,850 dwellings to the housing stock. Before these areas can be annexed, City policies require preparation of a Specific Plan. The Draft Margarita Area Specific Plan has been completed and a Draft EIR circulated for public comment. Annexation is likely in 2004, followed by subdivision processing and development review. At the earliest, new housing would be ready in late 2005. The Orcutt Area is earlier in planning stages. A Draft Orcutt Area Specific Plan has been prepared, with some revisions underway in 2004 to reflect higher density and innovative design approaches for this new neighborhood. Allowing for completion of the Specific Plan and the EIR process to follow, the Orcutt Area is expected to begin construction no earlier than 2007. During the Housing Element planning period, housing needs primarily will be met through in- city infill and intensification, and through development of the Margarita Area A 2003 inventory of vacant and underutilized land showed an in-city development capacity of 3,149 additional density units. Under City standards,a density unit has the following equivalencies: Studio Unit —0.50 Density Unit One-Bedroom Unit —0.66 Density Unit Two-Bedroom Unit — 1.00 Density Unit Three-Bedroom Unit — 1.50 Density Units Four or More Bedrooms —2.00 Density Units This development capacity is equivalent to 3,149 additional two-bedroom dwellings, or 2,099 three-bedroom dwellings, or a combination of different dwelling types with density unit values 130 San Luis Obispo City Council Draft Housing Element,January 27,2004 totaling 3,149. And while theoretically possible under City standards, actually achieving this development potential is highly unlikely. This rate of development, 3,149 dwellings (assuming two bedroom dwellings) in 7.5 years, averages 420 units per year. As shown in Figure C-4, this rate of construction has been achieved in only about nine of the 44 years between 1955 and 1999. Residential construction averaged only 83 dwellings per year between 2000 and 2002. Figure C-4 Residential Construction, 1955-1999 City of San Luis Obispo Net Increase In Dwellings(Permits Issued) 700 — — - --- - — —_ -- --600-- 500 - 400.. 00so0400 300m 200 100 0 t Years Source: City of San Luis Obispo,Community Development Depamnent 2000 Between 1980 and 2003, an average of 196 dwellings was added each year. Residential growth management rules began in 1982, following General Plan policies targeting a two- percent population growth rate during the 1980s and a one percent growth rate thereafter. Growth Management rules were revised in 1996 to exempt very low- and low-income housing. In 1987 Growth Management Regulations were suspended when the City adopted Water Allocation Regulations. In 1999 the City Council adopted new regulations (Municipal Code Chapter 17.88) and a phasing schedule to manage growth. The new regulations emphasized scheduling of development in the major annexation, while the timing of infill projects would not be regulated. New dwellings affordable to residents with very low or low incomes were exempt from the one- percent growth policy and the regulations. Across these policy changes, the cyclical construction pattern continued Population changes are shown in Table C-13. These also tend to correspond to regional and national economic cycles, and show an average annual growth rate of 1.02 percent during the 26- year period from 1977 to 2002. Future growth rates are likely to follow this trend 131 San Luis Obispo City Council Draft Housing Element,January 27,2004 Table C-13 Population Change, 1977-2002 Cit of San Luis Obis o 3-YEAR . . 5-YEAR YEAR'S ANNUAL - ANNUAL YEAR POPULATION . CHANGE AVERAGE AVERAGE, 1977 34,282 _. 1978 33,756 -1.5 1979 34,143 1.1 -0.2 1980* 34,252. 0.3 0.0 1981 34,759 1.5 1.0 _ 0.4 1982 35,239 1.4 1.1 0.6 1983 35,660 1.2 1.4 1.1 1984 36,407 2.1 1.6 1.3 1985 37,378 2.7 2.0 1.8 1986 38,205 2.2 2.3 1.9 1987 38,282 0.2 1.7 1.7 1988 39,858 4.1 2.2 2.3 1989 41,207 3.4 2.6 2.5 1990* 41,958 1.8 3.1 2.3 1991 42,178 0.5 1.9 2.0 1992 42,922 1.8 1.4 2.3 1993 43,397 1.1 1.1 1.7 1994 43,919 1.2 1.4 1.3 1995 41,295 -6.0 -1.2 -0.3 1996 41,404 0.3 -1.5 -0.3 1997 41,807 1.0 -1.6 -0.5 1998 42,201 0.9 0.7 -0.5 1999 42,446 0.6 0.8 -0.6 2000* 44,174 4.1 1.9 1.4 2001 44,218 0.1 1.6 1.3 2002 44,426 0.5 1.6 1.2 _26- ear Ave : e - _ 1.02%, 1.03%U ..._ 0.95% Source: City of San Luis Obispo,Community Development Department *U.S.Census figures;all others California Department of Finance. 132 San Luis Obispo City Council Draft Housing Element,January 27,2004 Appendix D Residential Land Resources To adequately plan for future housing, it is essential to understand the City's residential land resources. In 2002-2003, the Community Development Department conducted a parcel-by-parcel inventory of vacant and underutilized land in two geographic areas: 1) within City limits, and 2) outside City limits but within the Urban Reserve. The inventory also identified properties that contained"blighted" or dilapidated dwellings to the extent this was apparent from public streets. Survey information was derived from aerial photography, official City Planning and Building permit records, and field visits. The following information is derived from that inventory. 1. Availability of Sites for Housing A key component of San Luis Obispo's Housing Element is the identification of infill housing sites and future housing development opportunities in the 2001-2008 planning period. Opportunities for housing development may include: a. Vacant land designated for residential use; b. Underutilized residential sites where lot coverage and density are less than that allowed by the Zoning Regulations and where infrastructure needs for additional development can be met; c. Vacant or underutilized land suitable for mixed-use residential/commercial development; d. Vacant or underutilized land designated as Interim Open Space and suitable for eventual residential use once development constraints are resolved; e. Vacant or underutilized land outside city limits, within the City's Urban Reserve, including designated expansion areas. Table D-1 summarizes in-city development potential by zone, as of June 2003. According to the estimates for vacant and underutilized properties, there is a total development capacity within City limits of 3,149 density units (DUs), equivalent to 3,149 two-bedroom dwellings. The actual number of dwellings possible depends on the number of bedrooms in a unit. Table D-2 converts DUs to the potential number of new dwellings, assuming the mix of new housing in terms of bedrooms will be similar to the City's housing stock as described in the 2000 Census. As shown in Table D-2, the in-city development potential is estimated to be 3,255 dwellings. 133 San Luis Obispo City Council Draft Housing Element,January 27,2004 Table D-1 Vacant and Underutilized Land in City by Zone,June 2003 Zonell.and Use Designation Vacant Underutilized Total Density Parcels Parcels' Units, Acres DUs Acres DUs R-1 (Low-density Residential) 73 244 64 189 433 R-2(Medium-density Residential) 7 67 20 161 228 R-3(Medium High-density 1 12 6 73 85 Residential R-4(High-density,ERmde=ntial) 1 19 8 173 192 O(Office) 22 262 10 196 458 PF(Public) <1 4 21 113 117 C-C(General Retn) 0 0 1 31 31 C-R(General Retail) <1 6 8 160 166 C-N(Neighborhood Commercial) 3 28 2 22 50 C-S(Services and Manufacturing) 24 169 28 221 390 C-T(Tourist) 7 46 29 211 257 M (Services and Manufacturing) 30 215 24 244 459 CJOS(Interim Open Space) 1 14 1 60 1 35 223 1 283 Totals 1 182 1 1,132 1 256 2,017 3,149 Source: City of San Lads Obispo,Community Development Department,2003. Includes Blighted properties. ZIn the R-1 and CJOS zones, each dwelling counts as one density unit (DU). In all other zones, the number of bedrooms per dwelling determines the DU value. One DU is equivalent to a two-bedroom dwelling. Table D-2 Potential Number of Dwellings by Bedroom Bedrooms per % of 2000 Development Density Unit Potential Dwelling Housing Stock Potential,DUs Value(dwelling Dwellings 0-1 26 819 0.58 1,412 2 34 1,071 1 1,071 3 27 850 1.5 567 >4 13 409 2 205 Totals 100 3,149 — 3X5 Sotatx: City of San Luis Obispo,Community Development Department,2003. a. Vacant Residential Land This category includes vacant, developable parcels in the R-1, R-2, R-3 and R-4 zones, already served by utilities and streets. There are 73 acres of vacant R-1 zoned land, (40 percent of total vacant land in the city limits), with a development potential of 244 density units, or an estimated 244 attached or detached single-family dwellings. Generally, single-family detached houses are 134 San Luis Obispo City Council Draft Housing Element,January 21,2004 built in this zone, while multi-family dwellings (apartments and condominiums) are built in the R-2, R-3 and R-4 zones. FIGURE D-1 �L— The R-1 zone allows multi- family housing on larger sites at a maximum allowed 2 ' density of seven density units 5 per net acre (net acre 4 7 excludes dedicated right-of- g 8 way, areas within top of creek banks, endangered r'• _ ]4 species habitat, and areas within driplines of "heritage / 19. 17�} 15 ' trees."). R-1 zones are 26 typically developed with 18 21 market rate housing affordable to moderate- and above-moderate income households. Nine vacant acres of land are zoned and N available for multi-family Ahousing, with a development potential of 98 density units, or about 9 percent of the in- VwaM In-City Properties city vacant land development potential. Applying the ratio Underutilized with Addrtlond of density units to dwellings Blighted Developrwnt Capacity from Table D-2, an estimated 101 dwellings are possible on vacant land in the R-2, R-3 and R-4 zones. b. Underutilized Residential Land Underutilized residential land consists of parcels in the R-1, R-2, R-3 and R-4 zones that could accommodate additional housing based on lot area, slope and zoning. As shown in Table D-1, underutilized R-1 parcels could accommodate approximately 189 additional dwellings citywide. The amount of underutilized, multi-family residential-zoned land is very limited. An estimated 420 dwellings are possible on underutilized land in the R-2, R-3 and R-4 zones. Figure D-1 shows the locations of vacant and underutilized land in the City with residential development 135 San Luis Obispo City Council Draft Housing Element,January 27,2004 potential. c. Vacant or Underutilized Land Suitable for Mixed-Use Development City policies encourage mixed residential and commercial uses. Residential uses are allowed as part of mixed-use development in the C-C, C-D, C-R, C-N, C-T, C-S, M, O and PF zones. This includes the Downtown Core, an area that historically had many apartments located above ground-floor commercial uses. General Plan polices encourage housing rehabilitation and intensification in the Downtown Core (C-D zone). At 36 density units per acre, this zone allows the highest residential density in the City. Other commercial zones allow 24 density units per acre for mixed-use development. This category also includes areas with commercial-service and light manufacturing uses. City polices encourage multi-family housing close to schools and jobs. In 2003 the City revised its zoning regulations to expand mixed-use housing opportunities. The revisions introduced Live-Work dwellings in the C-S and Work-Live dwellings in both the C-S and M zones, a new form of housing for San Luis Obispo. They also relaxed requirements for establishing mixed residential/commercial uses, and renamed the C-C zone to C-D, or Commercial-Downtown. The C-C zone was then applied to community shopping centers outside downtown. Figure D-2 shows the percent of City residential capacity by land use zone, in density units,in 2003. As shown in Table D-1 there are 210 acres of vacant and underutilized land that could accommodate mixed commercial and residential uses, with a development potential of 1,928 density units, or about 1,988 dwellings — about 61 percent of the in-city development potential. Mixed uses are allowed by right in the C-C, C-D, C-R, C-N, C-T and O zones, and by use permit in the C-S and M zones. Mixed uses are allowed in the PF zone with rezoning to PF-MU. 136 San Luis Obispo City Council Draft Housing Element,January 27,2004 Figure D-2 Percent of City Residential Development Capacity by Zone, In Density Units O PF M 15% 4% 14% R-1 14% 1 C-T : 8% R-2 C-S R-3 7% 12% R-4 3% C-R C-NC-C Interim 6% 5% 2% 1% C/OS 8% Source: City of San Luis Obispo,Community Development Department,2003 d. Vacant or underutilized land designated as Interim Open Space The General Plan Land Use Element shows desired future uses for most land within the urban reserve line. However, for some properties, the City has not determined the eventual use. Such properties are designated as Interim Open Space (C/OS), indicating that they will be suitable for urban development when certain conditions are satisfied. Examples of such conditions include the provision of access and utility service, reduction of flood hazards and the need for and appropriate timing of urban development. Development of Interim Open Space requires approval of a development plan or specific plan showing how these conditions would be met. Approximately 49 acres of vacant or underutilized Interim Open Space were identified, with a potential development capacity of 283 density units. Three properties are included: the 25 acre Sunset Drive-in property, and two parcels of about 11 acres each between Los Verdes Residential Condominiums and San Luis Obispo Creek (off Los Osos Valley Road). These parcels are located within a 100-year flood zone and are not suitable for residential development until the flood hazard is mitigated without significant harm to San Luis Obispo Creek. Because this land is not yet suitable for residential development and provides open space benefits, it is considered a lower priority for development and is not included in residential development capacity,Table D- 4. 137 San Luis Obispo City Council Draft Housing Element,January 27,2004 e. Vacant or underutilized land outside city limits, within the City's Urban Reserve, including designated expansion areas The General Plan Land Use Element identifies an urban reserve line which shows the anticipated boundary for the City's eventual urban development. This area includes the City's primary residential expansion areas. For survey purposes, the urban reserve was divided into sub-areas: 1) the major expansion areas designated in the General Plan Land Use Element, such as the Margarita and Orcutt Specific Plan Areas, and 2) areas suitable for housing and located outside designated expansion areas, such as the Foothill Saddle area, Highway 1/11ighland Drive area and the Los Osos Valley Gap property, on Los Osos Valley Road, adjacent to Pacific Beach High School. Table D-3 shows estimated development capacity for the Urban Reserve. Table D-3 Vacant and Underutilized Land in the Urban Reserve by Sub-area June 2003 Subarea Vacant Underutilized T.otaF . Potential_ Land :_ Land _.DUs , _ Dwelln ` 3 Acres DUs Acres DUs_ Major Residential Expansion Areas: Margarita Area 410' — — — -- 868 Orcutt Area 231' -- -- _ — -- 979 Minor Annexation Areas 124 998 12 32 1,030 1,064 Total 2,911 Source: City of San Luis Obispo,Community Development Department 'Based on Draft Margarita and Orcutt Area Specific Plans. Acreage includes vacant and underutilized land. 2Density Units 3Assumed development ratio of 1.033 dwelling per density unit. 2. Evaluation of Residential Development Capacity The City's residential development capacity is summarized in Table D4. Based on the inventory of residential land resources within the City and in the urban reserve, up to 6,061 additional dwellings could be accommodated between 2004 and 2022. Department of Finance estimates the City has 19,558 housing units in 2003. According to the General Plan, the City's build-out capacity is approximately 24,300 dwellings by 2022, an increase of about 4,742 dwellings between 2004 and 2011. This indicates the City's potential residential development capacity exceeds the General Plan anticipated residential growth by about 1,319 dwellings. The actual number of residential units to be added will depend upon annexations,residential phasing and the availability of infrastructure, public services and facilities to serve new residents. Those areas offering the greatest public benefits in terms of affordable housing, open space preservation and transportation will receive annexation priority. 138 San Luis Obispo City Council Draft Housing Element,January 27,2004 Allowing a surplus of suitable residential land of at least 20 percent helps moderate land helps compensate for urban land left vacant due to ownership and development constraints, and helps moderate land cost increases due to extremely limited supplies of suitable residential land. HCD guidelines indicate that attached housing built at densities of at least 25 units per acre are considered affordable to very low-income households, and attached housing at densities of 16 to18 dwelling units or more per acre are likely to be affordable to low-income households. Three zones allow a base residential density of 36 (two-bedroom) units per acre and therefore, may be suitable for meeting very low- income housing.needs: C-C, C-D, and C-R zones. Developments that commit at least 20 percent of the total units for housing affordable to very low-, low- or moderate- income residents are eligible to receive a 25 percent density bonus, raising the allowed density in these zones to 45 units per acre. Seven zones allow base densities of 18 to 24 units per acre or more and therefore, may be suitable for meeting low-income housing needs: R-3, R-4, O, C-N, C-T, C-S and M. Developments guaranteeing that at least 20 percent of units will be affordable to very low-, low- and moderate-income households will raise the potential zone density to 22.5 to 30density units per acre. Vacant and underutilized land in these zones is adequate to meet the City's quantified needs for very Iow-, low- and moderate-income housing. Figure D-3 summarizes residential development capacity in-city, outside city in minor annexation areas, and in expansion areas. Figure D-3 Residential Development Capacity, by Dwellings, 2003 3,500 3,000 o. 2.500 to Q 2,000 3.254 dddioa ? ? O s 1500 6 Q Q 1,000 1,064 ✓ 86B 979 ddinona ,A /iiiti0 500 440 )auellitt C &twn ^' o?' dlia 420 weliin _ .Acres cre ' � ' Acres _ J7 INSIDE CfrY OUTSIDE CITY MARGARITA ORCUTT AREA AREA Location 139 San Luis Obispo City Council Draft Housing Element,January 27,2004 Based on housing completed during the period from January 1, 2001 to December 31, 2003, and on an evaluation of City land resources with residential development potential as shown in Table DA there is sufficient land to meet the City's RHNA needs for this planning period. However, because of water supply limitations, the City has proposed quantified objectives that differ from the assigned housing needs. Table D-4 Summary of Housing Develo went Potential, 2001-2022 Source/Location Acreage •`Potential Density ' .Potential Dwellings Units Vacant Residential 82 342 353 Underutilized Residential 98 596 616 Mixed-Use Residential 210 1,928 1,992 Interim Open Space Areas 49 0 Minor Annexations 136 1,030 1,064 Subtotals 575 3,896 4,025 Margarita Expansion Area 410 -- 868 Orcutt Expansion Area 231 979 Total Potential Dwellings 5,872 Source: City of San Luis Obispo,Community Development Department Based on Table D-2,potential dwellings= 1.033 X Density Units. 2Includes vacant or underutilized C-D,C-R,C-C,C-N,C-S,K 0 and PF zoned land. 3Areas within 100-year flood zone and not presently suitable for development. 140 San Luis Obispo City Council Draft Housing Element,January 27,2004 Appendix E Review of 1994 Housing Element Performance To develop appropriate programs to address the housing issues identified in this housing element update, the City of San Luis Obispo has reviewed the housing programs adopted as part of the previous (1994) Housing Element. The results of the programs, including their effectiveness in producing additional housing or removing obstacles to housing, is shown in Table E-1. By reviewing the progress in implementing the adopted programs, their effectiveness, and the continued need for these programs, a comprehensive housing program was developed, and is described in Chapter 3 of the updated Housing Element. Table E-2 compares the quantified objectives of the previous housing element and the actual achievements between September 1994 and January 2001. Table E-1 Housing Element Evaluation 1994-2001 Program Subject Description Implementation/Status Working- Keep- Not Done Not Number Keep Needs —Needs Needed Change New Look 1.21.4 Safe Housing Expand code Expanded enforcement X enforcement to program in effect. #cases resolve chronic rev'd increased 460/6 since building safety 1994,with 377 cases problems and getting resolved in 2001. prevent building Property Maintenance neglect Standards adopted in 1995 and 2002. 1.22.10 Incluslonary Adopt ordinance Ordinance adopted; has Housing requiring new produced 75 affordable X development dwellings and$787,500 in projects to in-lieu fees in 4 years. include affordable housing or pay in-lieu fees 141 San Luis Obispo City Council Draft Housing Element,January 27,2004 Program Subject Description Implementation/Status Working- Keep- Not Done Not Number Keep Needs —Needs Needed Change New Look 1.22.11 Housing Trust Establish fund to Fund adopted by Council X Fund provide Resolution; Award Criteria affordable and review process housing and approved 12/01;$215K assist very- awarded for 32-unit low- low/low/moderat income apartments. e income Current Balance is persons $572,500. 1.22.12 Periodic Periodically Commercial zoning X Review of review regulations recently Regulations development amended to encourage regulations and residential uses in consider commercial zones. changesto remove unnecessary regulations and encourage affordable housing 1.22.13 Permit Adopt Draft policies prepared; not X Streamlining procedures for yet adopted. streamlined processing of for affordable housing projects 1.22.14 Flexible Review Zoning Regulations, X Regulation development Parking and Driveway regulations to Regulations, and Dev. encourage Review Procedures include innovative, flexible standards for energy-efftcient residential development. housing through Very4ow and low-income flexible housing exempted from regulations for Residential.Growth Regs., owner-builders MS. 142 San Luis Obispo City Council Draft Housing Element,January 27,2004 Program Subject Description Implementation/Status Working- Keep- Not Done Not Number Keep Needs -Needs Needed Change New Look 1.22.15 Fee Amend Resolutions 8415 and 9131 X Exemptions regulations to adopted waiving reduce development review, permit development and impact fees for review/permit affordable housing. costs for affordable housing projects 1.22.16 Condominium Regulate Ordinance No. 1315 X Conversions condominium adopted,establishing conversions and condominium conversion adopt regulations. Affordability affordability regulated by Inclusionary requirement for hsg.standards. conversions 122.17 Public/Private Help coordinate Council-inflated actions to X Coordination public/private expand R-3/R4 zoning in actions to Orcutt Area is a recent encourage example. affordable housing 1.22.18 Assisted Enable issuance MRBs not currently in use Financing of mortgage for housing. X revenue bonds to assist first-time and low income homebuyers Affordable Conserve Implemented on a case-by- 122.19 Housing affordable case basis. City used X Conservation housing such as CDBG funds to stabilize mobile homes, and improve mobile homes apartments, and non-conforming older or legal housing for low-income non-conforming tenants.. housing;mitigate relocation impacts from public projects 143 San Luis Obispo City Council Draft Housing Element,January 27,2004 Program Subject Description Implementation/Status Working- Keep- Not Done Not Number Keep Needs —Needs Needed Change New Look 1.23.7 Housing Establish CDBG-funded Housing rehabilitation program to Rehab.Grants funded X loans provide low- improvements for 75 low- interest city loans income households. or other assistance to preserve affordable housin 1.23.8 Housing In To conserve Draft ordinance reviewed Office Zones housing in office by Council; postponed to X zones,consider coincide with Housing adopting a°no Element update. net housing loss° I' cy 1.23.9 Revise Office Amend Zoning Pending Zoning Regs. Zoning Regulations to would expand allowed X maintain residential uses Mixed-Use dwellings in Ordinance adopted in office zone Ordinance districts 1.23.10 Downtown Include a°no net Draft ordinance reviewed Housing housing loss° by Council;postponed to X Conversion policy in the coincide with Housing Downtown Element update. Housing Conversion permit process 1.23.11 Remove Remove Building Demolition and Regulatory regulatory Relocation procedures Obstacles obstacles to revised to eliminate use relocation and permit requirement.for X rehabilitation of relocating housing and dwellings to be Arch.review for all non- demolished due historic buildings.. Zoning to redevelopment Regs.allow post-disaster of their sites reconstruction for non- conforming,multi-family housing. 144 San Luis Obispo City Council Draft Housing Element,January 27,2004 Program Subject Description Implementation/Status Working- Keep- Not Done Not Number Keep Needs —Needs Needed Change New Look 1.23.12 Remove Adopt Not done. Would coincide Private regulations to with update of Subdivision Restrictions prohibit private Regulations. Has not been restrictions a problem in SLO. X (CC&Rs)which preclude relocated or rehabilitated dwellings in new subdivisions 123.13 Seismic Safety Create an No action taken. Only 121 Education educational buildings in SLO identified campaign for as having high seismic risk owners of older (URM);most of these are X residences on non-residential buildings. ways to reduce seismic safety hazards 123.14 Seismic Create a Council adopted financial Retrofit financial incentives to encourage X Assistance assistance seismic strengthening of program to help URM buildings; does not low income apply to non-URM households buildings.. protect their homes against earth uakes 123.15 Non- Consider Proposed Zoning conforming amending amendments would allow X Residential regulations that housing in all commercial Use make housing a zones non-conforming use in certain zones 123.16 Housing Consider No action taken. Conversion amendments to X building,zoning, and fire code . requirements which encourage conversion of housing to other uses 145 San Luis Obispo City Council Draft Housing Element,January 27,2004 Program Subject Description Implementation/Status Working- Keep- Not Done Not Number Keep Needs —Needs Needed Change New Look 1.24.4 Mixed-Income Review City Inclusionary Housing policies regulations and Standards implemented X revise as needed mixed-income policies. to implement the mixed-income Goes 125.6 Moved Housing Consider Inclusionary Housing Types amendments to Standards implemented X development mixed-income policies. regulations to implement mixed-variety and tenure policies 126.7 Growth Amend Management Residential Completed Growth Management regulations to exempt housing affordable to very4ow and low income households 126.8 Neighborhood Consider Commercial amendments to No action. X Mixed use zoning regulations to require dwellings above street level in new neighborhood commercial developments 126.9 Downtown Amend No action. Residential regulations to X Use require dwellings in new multi-story commercial buildings in the Downtown 146 San Luis Obispo City Council Draft Housing Element,January 27,2004 Program Subject Description implementation/Status Working- Keep- Not Done Not Number Keep Needs —Needs Needed Change New Look 1.26.10 Specific City will adopt Considered in preparation Plans/R-4 specific plans for of specific plans for zoning major expansion Margarita and Orcutt areas; X areas which will complicated by unknown include sufficient relationship between R-4 zoned land "regional need"and to accommodate necessary R-4 capacity, regional needs and by ALUP requirements. for very-low and low income housin 126.11 Edna-Islay Amend Edna- Primary planning area is Specific Plan Islay Specific built out.Was considered X Plan and rezone when secondary area was to include a mix annexed; rejected by City of medium-high Council. densitv housin 126.12 Residential Give priority to Considered and rejected by Service residential City Council. Priority projects in the X event public services must be rationed to new development 127.7 Neighborhood Establish Office of Neighborhood Involvement procedures to Services established; City X encourage public notice procedures neighbor input implemented. into planning and development review process 127.8 Neighborhood Identify Office of Neighborhood Planning neighborhood Services established and X needs,problems, neighborhood issues opportunities; addressed with new designate staff to ordinances. work directly with neichborhoods 127.9 Neighborhood City will help fund So. Laguna Lake street Projects neighborhood improvements,a recent X improvement example projects C 147 San Luis Obispo City Council Draft Housing Element,January 27,2004 Program Subject Description Implementation/Status Working- Keep- Not Done Not Number Keep Needs —Needs Needed Change New Look 127.10 Neighborhood Revise Community Design Security development Guidelines adopted. X standards to require all new housing provide visibility of streets and public areas 127.11 Neighborhood Review City Neighborhood Preservation Quality Regulations and Ordinance adopted 5/01. X revise as needed Code enforcement program to implement expanded to one full time neighborhood position; Civil Penalties quality policies Ordinance adopted to assist enforcement efforts. 128.6 Homelessness Support jointly CDBG programs support with other Homeless Shelter and agencies, local Prado Road Day Center, and regional Women's Shelter and X solutions to Transitional Housing.. meeting needs of (Delete reference to homeless CDBG) persons and displaced women and children 128.7 Mobile Home Continue to Mobile Home Rent Rent Control regulate mobile- Stabilization Ordinance in X home park rent effect. increases 1.28.8 Special Identify sites in Mobile homes,cooperative Housing Sites expansion areas housing,manufactured for mobile home housing allowed wherever parks, standard"stick-buitt" X cooperative housing allowed. housing, manufactured housing or other housing which meets special needs 148 San Luis Obispo City Council Draft Housing Element,January 27,2004 Program Subject Description Implementation/Status Working- Keep- Not Done Not Number Keep Needs —Needs Needed Change New Look 128.9 Campus Advocate Construction of on-campus Housing development of "Sufte"type student X non-dormitory housing underway at Cal housing on the Poly. Cal Poly University campus and refurbish existing campus housing 128.10 Fraternity/ Facilitate on- "Greek"housing limited to Sorority campus R-3 and R-4 zones. City X Housing accommodations policies encourage this type for fraternities of housing on campus. and sororities and limit their (Split into two programs) expansion in residential neighborhoods 128.11 Student) Adopt"good The"WIN"program has Community neighbor° been adopted(Working to X Relations program to Improve Neighborhoods), improve including education and communication community relations, and cooperation Community Services Team between the City, and other programs. Cal Poly, residents and students 129.3 Energy Educate staff, Implemented through Conservation citizen review building plan check/Title 24 X Education bodies and the compliance and through public in energy architectural review. conservation issues to promote compliance with energy- conserving housinq qoals 129.4 Solar Heating Amend No action. Proposed to be Requirements development deleted as part of X standards to Conservation&Open require solar Space Element update, due water heating for to current State energy new apartments standards. and houses 149 San Luis Obispo City Council Draft Housing Element,January 27,2004 Program Subject Description Implementation/Status Working- Keep- Not Done Not Number Keep Needs —Needs Needed Change New Look 129.5 Energy Assemble an Proposed Conservation & Conservation energy Open Space Element X Policy committee to update includes energy advise the City policies; referred to energy on updating the advocates; no committee Energy Element formed. for energy efficient housing 1.29.6 Solar Access Consider Proposed Conservation& Policy changes to solar Open Space Element X siting and access update includes energy to improve long- policies;referred to energy term residential advocates;no specific solar access siting/access comments received. 129.7 Plumbing Continue and City essentially frilly Retrofits expand the retrofitted. Mandatory X subsidized retrofitting discontinued. plumbing retrofit program for water conservation 1.29.8 Wates Make water Implemented through public Conservation conserving education outreach and X landscape media spots. education and retrofit a priority coequal with. plumbing retrofits 1.30.5 CommerciaU Require Implemented through Industrial proposals to environmental review X Expansion annex required for all new commercial-or annexations. industrial-zoned land to evaluate impacts on housing demand, supply and cost 150 San Luis Obispo City Council Draft Housing Element,January 27,2004 Drogram Subject Description Implementation/Status Working- Keep- Not Done Not Number Keep Needs —Needs Needed Change New Look 1.30.6 Airport Area Discourage Implemented through significant County Referrals program. X expansion of Specific Plan adoption employment in anticipated in 2003. the unincorporated airport area, pending annexation 1.30.7 Out-of-area Request Handled on a case-by-case Housing developers of basis. Most recent X Demand housing projects example: DeTolosa Lottery to promote their limited to SLO County projects only residents or people within the San employed in SLO City. Luis Obispo County housing market area 1.30.8 City Make City Implemented by Economic Promotional promotional Development Manager. X. Practices practices, economic development efforts,and other actions consistent with the policy of not enticing persons from elsewhere to move to San Luis Obis . 1.30.9 Enrollment Link enrollment Implemented through City Growth growth at Cal participation in Student X Poly and Cuesta Housing Needs study and College to the through Council direction. provision of campus housing programs 1.30.10 Institutional Link expansion Council policy direction Growth of State X institutions,e.g. California Mens' Colony with the provision of employee housing 151 I San Luis Obispo City Council Draft Housing.Element,January 27,2004 Program Subject Description Implementation/Status Working- Keep- Not Done Not Number Keep Needs —Needs Needed Change New Look 1.30.11 Non- Consider Non-residential growth residential amending the management policies Growth Urnits growth included in Land Use x management Element,however regulations to non-residential growth moderate long- regulations considered and term housing rejected by City Council. demand due to non-residential rowth 1.31.5 Site Suitability Adopt Safety Element and open regulations to space policies updated; prevent new specific plans and GP X housing on revisions for consistency unsuitable sites with ALUP pending. or where subject to hazards or incompatible land uses Table E-2 Progress in Achieving housing Element Quantified Objectives, 1994-2001 PROGRAM _ QUANTIFIED LEVEL"OF PERCENT _ . _OBJECTIVE(Units)" ACHIEVEMENT.i(Units): ACHIEVED. NEW CONSTRUCTION Very Low 381 62 16 LOW 317 42 13 Moderate 172 6 3 Above Moderate 347 537 155 TOTAL 1416 647 53 REHABILITATION Very Low 56 18 32 Low 33 21 64 Moderate 31 0 0 Above Moderate 62 0 0 TOTAL 1 182 39 21 152 San Luis Obispo City Council Draft Housing Element,January 27,2004 CONSERVATION Notices of Violation Very Low 57 n/a Low 34 n/a Moderate n/a Above Moderate n/a TOTAL 91 2 800 PRESERVATION Units At-Risk Very Low 77 77 TOTAL 77 77 Source: City of San Luis Obispo,Community Development Department IThe Housing Element quantified objectives originally covered the planning period 1994—1999,but this table includes accomplishments during the period 1994 through 2000 due to delays in the Statewide Housing Element update cycle. ZConservation of housing and neighborhoods evaluated in terms of code enforcement actions. Total units not broken down by income category due to lack of available data. 153 San Luis Obispo City Council Draft Housing Element,January 27,2004 Appendix F Five= Year Implementation Plan (To be completed later) 154 Appendix G Dousing Task Force Recommendations The City of San Luis Obispo Housing Element Update Task Force Report to the City Planning Commission Final Draft October 15, 2003 Housing Element Update Task Force Sam Blakeslee Cuesta College (Co-Chair) Linda Dalton Cal Poly (Co-Chair) Stephen B. Barasch SLO Property Owner's Association Andrew Carter Renter/low-income household/family Gabe Garcia Renter/low-income household/family Cydney Holcomb Residents for Quality Neighborhoods Kent MacDonald Downtown resident George Moylan San Luis Obispo Housing Authority Anita M. Robinson Banker/housing lender Sandra Sarrouf ECOSLO Richard Schmidt Sierra Club Chris Skiff Housing developer/builder Scott Smith Peoples Self-Help Housing Corporation Elizabeth Biz'Steinberg Economic Opportunity Commission Tom Swem Downtown Association Patricia Wilmore SLO Chamber of Commerce James Caruso Planning Commission (Non-Voting) Community Development Department John Mandeville,Director Michael Draze,Deputy Director Jeff Hook, Project Planner San Luis Obispo City Council Draft Housing Element,January 27,2004 The Housing Element Update Task Force On January 7, 2003, the City Council established the Housing Element Update Task Force and directed staff to work with the Task Force and the Planning Commission to prepare a housing element that could hopefully achieve state certification consistent with City General Plan goals. City Council Resolution No. 9387 establishing the Housing Element Update Task Force set out the following: Goals of the Council: To update the General Plan Housing Element with the goals of expanding housing opportunities for very-low, low, and moderate-income households, preserving and enhancing residential neighborhoods, and complying with state laws, including the California Environmental Quality Act(CEQA). Duties of the Task Force: 1. Review and comment on existing housing policies and programs in an effort to expand housing opportunities for very-low, low and moderate-income households. 2. Recommend new housing goals,policies or programs to address community housing needs. 3. Review the Draft Housing Element Update. 4. Other duties as assigned by the City Council. The Housing Element Update Task Force held eighteen meetings over a period of seven months, reviewing information presented by staff, the public, individual members of the Task Force, and issue reports by five subcommittees comprised of Task Force members. The information reviewed ranged from the goals,policies, and programs in the 1994 Housing Element to concerns over impacts to existing residential neighborhoods and new ways to encourage production of more affordable housing by the public and private housing providers. Although there were clearly differences of opinion about the relative priority of issues and the most effective approaches to solving identified problems, Task Force members reached consensus on most of the issues. This report focuses on a list of specific issues the Task Force members developed early in their meetings. The report is organized into six sections based on major topics the Task Force dealt with, plus an appendix that includes comments on issues where at least two of the Task Force members disagreed with the prevailing opinion of the group. In the main body of the report, ail issues that reflect consensus of the group are simply stated. Those where the group did not agree are indicated by the vote in brackets following the statement; f for, against, abstain 1. Some issues remain unresolved and are so noted. In addition, the Task Force provided specific suggestions for refining some of the broad goals that frame the housing element. These include the following: 156 San Luis Obispo City Council Draft Housing Element,January 27,2004 Affordability—There was a consensus on need to update the definition. Housing Conservation — Members raised concerns regarding the extent to which this goals involves conserving the number of units or the units themselves. Energy and Water Conservation—There was a consensus to incorporate "sustainable design" into the goal. Demand Management — Members suggested more positive wording, such as "maximize opportunity for those who live and work in the City" or"Balance supply and demand" Suitability — There was a consensus to add a new goal to encourage innovative subdivision and housing design. I.URBAN FORM AND CONTEXT Statement of Principles The Task Force believes that new housing development should occur within the existing urban reserve line of San Luis Obispo. The City should continue policies and programs that discourage urban sprawl and its concomitant woes, particularly traffic. The City should continue policies and programs that promote a compact urban form. 110-31 In order to accommodate residential growth, the Task Force believes the City should focus as much on infill and densification within current City limits as it does on annexation within the urban reserve line. 110-31 Infill represents the building of housing on existing vacant lots within the City. Residential densification can be accomplished in various ways, but it should be targeted to specific areas downtown, near Cal Poly, near major commercial areas, and along major transportation routes. 110-3) General Recommendations The Task Force recommends adopting multiple policies to encourage residential growth in ways consistent with the above principles. These measures include the following: 1) Intensify downtown residential development. 2) Encourage the development of additional housing on-campus and near campus. 3) Encourage the development of additional housing near major commercial areas. 4) Encourage the development of additional housing along major transportation routes. 5) Discourage development of higher-density housing in other locations than mentioned above. 17-61 6) Encourage mixed residential and commercial development. a) Consider rezoning specific undeveloped commercial property to residential. b) Encourage"live/work" and"live-near-work" housing. c) Examine all regulations that prevent building to currently allowed residential densities. 157 San Luis Obispo City Council Draft Housing Element,January 27,2004 d) Consider upzoning specific lower-density residential property to higher-density in appropriate areas downtown, near Cal Poly, near major commercial areas, and along major transportation routes. 110-31 Specific Recommendations: The Task Force recommends implementing the following measures in conjunction with the above principles and recommendations: 1) Adopt flexible zoning standards in targeted areas in return for the provision of additional affordable housing units. These standards might utilize Floor Area Ratios for a given site, reduced lot sizes, reduced setback requirements, increased building heights, increased allowable land area coverage, the use of least restrictive standards for mixed use developments, etc. 110-31 2) Relax open space requirements in the expansion areas in return for the provision of additional affordable housing units if the open space protected is not specifically tied to geographic features like hillsides, wetlands, and watercourses. 110-31 II.ROUSING DESIGN,NEIGHBORHOOD CHARACTER AND LIVABILITY Statement of Principles The Task Force believes that any new housing should maintain a"good fit" with its surroundings and provide a pleasant and attractive living environment for residents. Increased housing development and density should not undermine the appealing characteristics of the existing urban fabric nor require reduced.standards of housing design for individual developments. The City's existing Community Design Guidelines provide a good start for describing the standards that can ensure quality housing and neighborhoods. However,these guidelines need to be clarified and expanded in order to adapt to new, denser forms of housing. General Recommendations: The Task Force recommends the following: 1) Ensure that higher-density housing maintain high standards for unit design, privacy, security, types of on-site amenities, and the nature of public and private open space. 2) Ensure that higher-density housing is compatible with adjacent development, particularly established residential neighborhoods. Specific Recommendations: The Task Force recommends studying the implementation of the following specific initiatives or programs: 1) New and/or revised Community Design Guidelines should address the amount, usability, nature, and location of both public and private open spaces within housing developments. 2) New and/or revised Community Design Guidelines should address the nature of driveways and parking lots within housing projects, specifically the "tunnel effect" created by long, parallel lines of units which face each other across narrow driveways, and the amount of 158 San Luis Obispo City Council Draft.Housing Element,January 27,2004 separation of driveways and parking lots from pedestrian walkways, unit entrances, and private living spaces. 3) New and/or revised Community Design Guidelines should ensure adequate standards for setbacks and height limits for developments located in existing neighborhoods. 4) Downtown Residential Development Standards should ensure that the massing, scale and architectural character of new developments create an attractive living environment. 110-31 5) The above standards of livability should be flexible enough to allow creative design approaches in special circumstances, e.g., in developing mixed-use developments or in residential housing in the downtown. (12-1} Issue 1: Adjust Parking Requirements to Meet Needs of the Development Rather than the Current Residential Parking Standards for each Residential Zone 1) Adopt flexible parking standards in targeted areas for specific developments. These standards might include lowering the number of required parking spaces in return for livetwork or live-near-work housing, the payment of parking in-lieu fees, the payment of mass transit in-lieu fees, the provision of alternative transportation for residents, restrictions on the number of cars residents may own, off-site parking facilities (public or private), shared parking facilities (on-site or adjacent, commercial or residential), the provision of additional affordable housing units,etc. a) Allow lower parking requirements, including the possibility of zero parking, for development in the downtown core and its adjacent neighborhoods; along major transportation routes; near existing shopping districts; and within higher-density residential areas near Cal Poly. (12-1} b) Allow lower parking requirements, including the possibility of zero parking, for developments that provide a range of alternative parking or transportation options for residents. Such options would include, but are not limited to, agreements to use parking lots on adjacent or nearby properties (including "live-near-work" housing), agreements to use City-owned parking lots at night, and providing residents with alternative-energy vehicles. (12-1) c) Mitigate the impact of developments through reduced parking requirements, especially in established Rl and R2 neighborhoods, by expanding the neighborhood parking permit program, by enforcing existing regulations regarding street parking, and by decreasing the amount of allowable paving [now 50% of the front yard] for parking areas in residential neighborhoods. (12-1} d) The program of parking reduction should be implemented on a limited, experimental basis in order to test the impact and efficacy of the proposed parking changes. 2) New and revised Community Design Guidelines and Parking Standards should address the amount of parking required for the types and locations of developments that are consistent with the City's plan for compact urban form. 112-1} 159 San Luis Obispo City Council Draft Housing Element,January 27,2004 Issue 2: Explore Allowable Densities in Existing Residential Zones and Underlying Criteria General Recommendation: Allow greater housing densities and the potential mix of housing types to encourage a broader range of affordable housing options. Specific Recommendations: 1) Establish reasonable,equitable, and predictable density bonuses based on predesignated areas in the City, dwelling form;occupancy type, use of mixed-use development, and the percentage of affordable units in a development. 112-11 2) Establish smaller minimum conforming lot area requirements in residential zones where appropriate. {10-2-1) 3) Create meaningful density incentives based on the percentage of affordable housing created in any given development. {12-1) 4) Create higher allowable residential density for Mixed Use Developments. Issue 3: Reguire that Livability Standards Be Retained Through Good Design When Usine Hieher Density Issue 4: Encourage Live-Near Work with Allowed Reduction in Parkine Issue S: Encourage More "Mixed Use Types of Development Related Issues Issue 6. Retain Integrity of Open Space on Each Lot Issue 7: Discuss When We Preserve Existing Structures and When We Don't M.PRESERVATION AND ENHANCEMENT OF EXISTING RESIDENTIAL NEIGHBORHOODS AND CONSERVATION OF EXISTING HOUSING STOCK Statement of Principles: The Task Force believes that our neighborhoods are the basic building blocks that make up the larger community of San Luis Obispo.They are the places where we live,recreate and sometimes work. They constitute the largest use of land in the City and the homes within oftentimes represent the largest single investment residents will ever make. San Luis Obispo's neighborhoods are diverse. Neighborhoods downtown and in the northern part of the City are older; these areas face distinctly different challenges than their counterparts in the newer, southern part of the City. The Task Force believes that City policies should reflect this diversity of needs by (1) defining types of existing neighborhoods and, on the basis of that definition, provide direction to protect, enhance, and/or revitalize them; and (2) supporting the development of new residential areas as well-functioning neighborhoods. 160 San Luis Obispo City Council Draft Housing Element,January 27,2004 General Recommendations: The Task Force recommends the following objectives in regard to preservation and enhancement of existing residential neighborhoods. 1) Protect the peace and quiet of single-family neighborhoods. 2) Clarify that neighborhood integrity applies to more than the R1 areas. Specific Recommendations: The Task Force recommends implementing the following specific initiatives or programs to preserve and enhance the City's existing residential neighborhoods and. to conserve the City's existing housing stock. 1) Preserve and enhance the quality, character and integrity of established residential neighborhoods. Density; scale; lot size, configuration, and coverage; building size and placement; set backs and usable open space help to define the character of established neighborhoods. 2) New development or redevelopment within an established residential neighborhood shall be consistent with the predominant quality,character and scale of that neighborhood. 3) Ensure that edges of new neighborhoods transition with older residential neighborhoods. 4) Implement a wide variety of strategies to ensure that the residents are educated as to and involved in planning decisions involving their neighborhoods,early in the process. 19-11 5) Protect the low-density character and private open space associated with established R-1 neighborhoods. 6) Improve the condition of the City's existing housing by: ensuring strict compliance with the Uniform Building Code; enforcing existing Housing and Property Maintenance standards; enacting a Rental Inspection Program; and promoting conservation and rehabilitation. (6-4) 7) Urge Cal Poly and Cuesta College to take an active role in working with city government and community organizations to create a positive environment around the campus by: a) Addressing what density of students is appropriate in surrounding neighborhoods; b) Promoting homeownership in its surrounding low density neighborhoods for university employees and others; c) Encouraging and participating in revitalization of degraded neighborhoods. Additional thoughts by subcommittee: 1) The Housing Element should acknowledge the importance of Universal or Accessible Design. Although Universal Design standards address the needs of people with disabilities,it is a comprehensive concept that can benefit all users. Universal design features increase the usability of the home by people of all ages, sizes, and abilities and enhance the ability of all residents to live independently in their own homes for as long as possible. Many times, it's the home itself that causes people to leave-it just isn't "user friendly". 2) Production of a variety of appropriate housing types for special needs populations should be encouraged, including single room occupancy (SRO), group homes and integrated community apartment living. 161 San Luis Obispo City Council Draft Housing Element,January 27,2004 3) Housing constructed with public subsidies (or incentives) should include units that are fully handicapped accessible. Unresolved Issues: Issue 1: Allow More Imaginative Physical Forms of Housing to Encourage Affordability Related Issues Issue 2: Explore Housing on Top of Large Buildings IV. SUSTAINABLE HOUSING,SITE,AND NEIGHBORHOOD DESIGN Statement of Principles: The city should promote residential design sustainable at the lifecycle ("cradle-to-grave") level, and as benign as possible in its environmental impacts. Sustainable residential design principles should be applied with consistency to the individual dwelling, the site, and at the neighborhood level. Individual buildings and new neighborhoods should be viewed in a long-term perspective rather than as commodities to build as quickly and cheaply as possible, with little thought to long-term impacts. General Recommendations: 1) As part of its overall commitment to quality of life for its residents and to maintaining environmental quality, the city should encourage housing design that's resource-conserving, healthful, economical to live in, environmentally benign, and recyclable when demolished. This can be accomplished through practices like the following: {8-1 for this entire section} a) Maximize use of renewable, recycled-content, and recycled materials, and minimize high- embodied energy materials and high environmental impact materials. b) Incorporate renewable energy features including passive solar design, solar hot water, solar power, and natural ventilation and cooling. c) Minimize thermal island effects through reduction of heat-absorbing pavement, and increased tree shading. d) Avoid building materials that may contribute to health problems, such as outgassing and glass fiber contamination of indoor air. e) Design for quiet,indoors and out, for both the mental and physical health of residents. f) Design dwellings economical to live in because of reduced utility bills, low cost maintenance and operation, and improved occupant health. g) Use construction materials and methods that maximize the recyclability of a building's per• h) Educate public, staff, and builders to the advantages and approaches to sustainable design, and thereby develop consumer demand for sustainable housing. i) Consider adopting a sustainable development rating system, such as the I.EED program. 162 San Luis Obispo City Council Draft Housing Element,January 27,2004 2) Promote community level residential design. Site design, subdivision design, and neighborhood design need to be coordinated to make residential sustainability work. Some ways to do this include: {8-1 for this entire section} a) Design subdivisions to maximize solar.access for each dwelling. b) Design sites so residents have usable outdoor space with access to both sun and shade. c) Adopt lot coverage standards that reduce the amount of land surface that may be covered with impermeable materials. (Impermeable surfaces include both the area covered by a building and the area covered by hard-surfaced paving.) d) Adopt street and access way standards that reduce the amount of impermeable surface devoted to vehicular use. e) Use neighborhood retention basins to purify street runoff prior to its entering creeks. (Such basins should be visual and functional amenities in the dry season, not fenced-off barren pits.) f) Encourage cluster development with dwellings grouped around considerable amounts of shared open space in return for smaller individual lots. g) Separate neighborhoods of all densities from heavily trafficked streets and highways with landscaped buffers. 3) In the existing core city, sustainability means maintaining physical neighborhood qualities we already have. Some ways to do this include: a) Resisting the urge to overbuild areas like Old Town, thereby maintaining a close-in living environment appealing to people who can afford to live outside the city and commute back. b) Encourage maintenance and rehabilitation of existing historic housing stock. Issue 1: Create a sizeable body of affordable housing that is as close to permanent as feasible Statement of Princiules• The private sector developers are not able to reach the lowest income households and this group will continue to rely mostly on public and private non-profit housing organizations. In addition, it's difficult to maintain a sizeable body of privately developed affordable housing because significant portions of that housing stock ultimately become available to the general public at market rates. Therefore it is desirable to create affordable housing units that remain affordable for as long as the law allows. Encourage community support of affordable housing and special needs housing by combating misconceptions regarding both publicly and privately developed affordable and special needs housing through active community outreach and education. General Recommendations: 1) Create affordable rental housing that stays affordable for at least 55 years, whenever that is possible (see federal tax credit provisions). 2) The city should seek to replicate the success of existing 55-year affordable housing developments such as those that were established at Marvin Gardens,Brizzolara, and Carmel. 163 San Luis Obispo City Council Draft Housing Element,January 27,2004 3) Assist in the establishment of long-term affordable housing units by identifying city-owned properties that could be used for that purpose and owned by the city in perpetuity. 4) The city should review its existing inventory of city-owned under-developed properties and dedicate some portion of those properties to address affordable housing issues. For example, one might envision a mixed-use downtown parking structure that would incorporate an element of onsite housing. The mixed-use parking structure could leverage off the city- owned land and the availability of parking enterprise funds to finance the underlying parking structure. 5) Encourage local government to acquire land for current or future affordable housing development, either through direct market acquisition or donation by developers as an "in- lieu"option. 6) Ensure long-term affordability of ownership housing through shared equity. {8-1} Issue 2: Student Housing Statement of Principles: Thousands of students attending Cal Poly and Cuesta College live in or near San Luis Obispo. Their presence has had a number of positive and negative impacts to the community. Many students occupy single-family homes, particularly in neighborhoods near Cal Poly, and this has produced some negative impacts to these neighborhoods. The city's housing element needs to provide for the protection of existing neighborhoods and the availability of decent and affordable housing for students. General Recommendations: 1) Increase the supply of dedicated"on campus" and"off campus" student housing at a rate that is at least commensurate with the increase in out-of-area enrollment. Such housing, whether it is on-campus or off-campus, should include management and transportation services appropriate for student living. 2) Reduce the incidence of unsafe and non-conforming conversions that create student rentals out of garages, closets,and attics. 3) Urge Cal Poly and Cuesta to maximize their supply of student housing on campus to avoid displacement of existing residents or a loss of existing rental housing resources available to other City residents. Spec Recommendations: 1) Urge Cal Poly and Cuesta College to construct additional on-campus housing facilities. This encouragement may include assistance with issues related to state and federal funding (grants), water and sewer, circulation, and land use issues. 2) Act as a facilitator to encourage cooperative housing arrangements and partnerships that include the City,Cal Poly, and Cuesta College. 3) Assist Cal Poly and Cuesta College in their efforts to provide supervised off-campus housing facilities. This may entail a willingness to rezone parcels, reroute public transportation services,or expand circulation capacity in particular areas. 17-21 164 San Luis Obispo City Council Draft Housing Element,January 27,2004 4) Encourage off-campus students to live throughout the community rather than in large, concentrated, student-only enclaves. (8-1) 5) Although it is important to manage the impact of student housing on residential neighborhoods it is essential to avoid concentrating large numbers of students in unsupervised settings —thereby creating the potential for Isla Vista-like setting somewhere in or near San Luis Obispo. 6) Locate off-campus student housing near major transportation corridors or in close proximity to the campuses to reduce circulation impacts. 7) Increase enforcement of existing city ordinances that prevent unsafe and illegal conversions. Such conversions can make competing on-campus and off-campus housing developments appear less affordable than their illegal counterparts. These units increase the risk of higher vacancy rates at student housing developments, which in turn reduces the likelihood of new units being built in the future. 8) Work with other jurisdictions to advocate for changes in State legislation that would: (1) provide funds for public higher education institutions to provide adequate on campus housing for students; and (2) allow more flexibility to individual institutions to engage in public- private partnerships to construct new student housing. Issue 3: Owner Occupied Mobile/Manufactured Home Lots Statement of Principles: Owner occupied mobile/manufactured home lots provide an important supply of entry-level affordable homes. Many families now own their own single-family home because they first purchased a smaller entry-level dwelling such as a condominium, a duplex, or a townhouse. Some of the most affordable entry-level dwellings are mobile/manufactured homes. Unfortunately,they are in exceedingly short supply. General Recommendations: Dedicate a certain portion of new housing in expansion areas for owner-occupied manufactured home lots. Specific Recommendations: 1) Encourage developers to create owner-occupied manufactured home parks with amenities such as greenbelts, recreation facilities, and shopping services within a master planned community setting. Such parks could be specifically designed to help address the needs of those with mobility and transportation limitations. 2) Establish lot sizes, setback, and parking guidelines that allow for relatively dense placement of manufactured homes within the master planned community. 3) Locate manufactured home parks near public transit facilities or provide public transportation services to the manufactured home parks to minimize the need for residents to own automobiles. Issue 4: Special Needs Populations Statement of Principles: 165 San Luis Obispo City Council Draft Housing Element,January 27,2004 Certain special-needs populations may face both economic and non-economic challenges that make housing particularly difficult to acquire. Such populations could be assisted in obtaining housing if funds were dedicated for that purpose. Special Needs Populations include disabled persons, elderly persons, large household, farm workers, single-parent families, homeless persons,students, and shared households. General Recommendations: 1) Encourage close cooperation between the city and the county to address affordable housing needs. 2) Encourage the County-Wide Housing Trust Fund to allocate a fixed percentage of the funds raised to be expended for Special Need Populations. 3) Better define which populations qualify for special need assistance. Specific Recommendations: 1) Minimize use of affordable housing dollars for bureaucracies and staff positions, particularly when staffing and administrative needs could be met by coordinating with the County or with existing non-profits. 2) Certain Special Need Populations should be served through coordinated assistance from both the city and county. 3) Utilize existing unoccupied hotel buildings in downtown San Luis Obispo for appropriate single room occupancy (SRO) and transitional housing. 4) Encourage co-housing as a housing alternative as has been done in Oceano and Paso Robles. 5) Increase multi-family rental housing availability. Issue 5: Improve education on the use of Universal Design Establish workshops for designers, architects, and the public to provide education on understanding the advantages of universal design and how this benefits people of all abilities through the lifespan of the occupants and of the building. Issue 6. Protect housing affordability for low income occupants by limiting city utility increases consistent with City policy The existing utilities have programs for this purpose and they should be continued and expanded where practical. 17-5) V.GOVERNMENT REGULATIONS,PROGRAMS, &PROCEDURES Statement of Principles The City shall encourage the provision of a wide range of housing types to meet community needs by adopting policies, procedures and incentives that facilitate rather than inhibit the construction and preservation of affordable housing. The Task Force believes that while most city policies serve useful purposes in regulating the type and nature of growth, some regulations, 166 San Luis Obispo City Council Draft Housing Element,January 27,2004 programs and procedures may inhibit housing development in general and affordable housing development in particular. The City should work to remove unnecessary or onerous governmental roadblocks to housing development. Recommendations: 1) Review and amend or replace planning policies so as to ensure that they support the construction of affordable housing a) Review existing and proposed policies, regulations and programs with respect to how they may affect housing production and affordability. i) For example, amend existing policies, regulations, and programs where appropriate to remove provisions that tend to reduce housing affordability. ii) For example, require findings regarding the impact of any new policy, regulation, or program on the financial feasibility of building affordable housing. 2) Provide exceptions to standards and fees for moderate as well as low-income housing, using a scale to provide the greatest relief for housing designed for lower income levels. 1741 3) Refine definition of affordability to reconcile how rental and for-sale prices_ are evaluated and create an extremely low and an above moderate (120%-160% of median income) category. 18-3) 4) Make a commitment to strong incentives. (9-21 a) Create incentives that.are significant enough to make an impact on housing production and affordability. b) Adjust incentives on a scale so to offer more incentives for low vs. moderate-income housing. 5) Modify inclusionary housing policies to emphasize incentives, including density bonuses and other provisions that encourage the production of affordable units. (8-31 6) Clarify the conditions and incentives for preserving existing housing. a) Historic buildings and districts should be respected, recognizing that building clusters and neighborhoods as well as individual buildings can be historically significant. i) Clarify criteria and process ii) The City should define buildings &districts beforehand to extent possible iii) The City should seek to retain character and style in neighborhoods b) Housing conservation in areas (a) not identified as historic districts and (b) not in R-1, R- 2,R-3, or R-4 zones needs to be clarified(specific buildings or dwelling unit count) i) Greater predictability in rules is desirable. ii) The Task Force discussed the conversion of housing to other uses (i.e., offices). This conflict between achieving no-net-loss and simply allowing what underlying zoning allows was not resolved. iii) Existing rules regarding no-net-loss for conversion of four or more units should be retained. iv) Incentives should be used to help retain residential units when less-than-four residential units are affected by a development. c) The City should provide appropriate incentives to encourage additional housing in the downtown,particularly in mixed-use developments. 167 San Luis Obispo City Council Draft Housing Element,January 27,2004 i) Density or use bonus and additional allowable heights ii) Flexibility in parking requirements for mixed use housing iii) Fee reductions iv) Encourage mixed use conversions v) No-net-loss of residential units requirements can be satisfied in nonresidential (i.e., not R-1 through R-4)zones if conversion includes mixed-use housing. d) The City should streamline housing approval procedures. {7-4) e) The City should maintain and publicize a list of dwellings available for relocation. {9-2) f) The City should redefine development standards and create incentives for R3 and R4 zones to facilitate the construction of multi-family housing that approaches full density. (9-2) g) The City should support an affordable housing manager to coordinate housing programs with other City departments and outside organizations. i) Direct the housing manager to address implementation of the recommendations in this report,particularly removal of barriers,provision of incentives, and clarification of criteria and processes. Unresolved Issues The Task Force debated how to address the conservation of housing not in R-1, R-2. R-3 or R-4 zones and not in historic districts. The primary concern of the debate focused on what might be called transitional areas around Downtown that were once primarily residential. The majority of the members felt that landowners in such zones have the flexibility to develop their property according to the full range of uses permitted in the zone. Within this group, some were very comfortable with including housing in new mixed-use developments, particularly if incentives were offered to address building mass and parking requirements. In other words, this group interprets the notion of "no net loss" as applying to maintaining the number of housing units, rather than individual structures per se. The minority perspective included two concerns — one focused on design and the other focused on affordability.. With respect to design, this group argued that the scale of existing residential units contributes to the character of a transitional neighborhood, so the structures themselves need to be preserved as part of any land use conversion. Often, also, the design and spatial quality of these dwellings is irreplaceable (Victorians or large bungalows, for example) and thus the loss to housing variety as well as neighborhood character caused by their removal can be significant. With respect to affordability, this group argued that replacement units may-not be as affordable as existing housing and/or might be built for smaller households,resulting in a net loss in the supply of housing for some markets even if the number of units is maintained. 168 San Luis Obispo City Council Draft Housing Element,January 27,2004 VI.FINANCING AND IMPLEMENTING AFFORDABLE HOUSING Statement of Principles The Task Force believes that in order to achieve the desired goal of the creation of more units of affordable housing in the City of San Luis Obispo, innovative incentive and financing programs as well as modifications to current City programs will be required. Recommendations: 2) Support a Countywide Housing Trust Fund(CHTF) a) City should work with the CHTF to secure dedicated sources of funding. b) To assist the CHTF, the City should focus on grants, loan guarantees, Prop 46 funds, and City inclusionary housing funds.. 19-21 3) Increase inclusionary housing requirements for commercial development 16-51 4) Spread cost of Affordable housing to entire community by developing or reallocating sources of funding. a) Enact a City real estate transfer fee. (6-51 b) Dedicate part of TOT to housing programs. 18-31 5) Amend the following affordable housing standards: a) Create a Extremely Low-Income Category for Rental Housing b) Created an "Above Moderate" Income Category ranging from 120— 160% of area median income c) Modify the formula for calculating maximum "Affordable Housing Sales Price" using typical lending practices. Specifically, sales price should be based upon maximum loan plus 3% down payment. Maximum loan should be calculated using 30-year amortization and interest rate based on 11's District Cost of funds plus 3%. 169 San Luis Obispo City Council Draft Housing Element,January 27,2004 Minority Opinion Report As should be expected, the members of the Housing Element Update Task Force did not agree on all specific issues brought before them. Where those issues could not be revised to reach consensus, the prevailing opinion as indicated by vote of the members in attendance, was used in the main report and recommendation to the Planning Commission. This minority opinion report includes those issues that were deleted from the main report. It was agreed that the Planning Commission should have the benefit of seeing the issues forwarded by a subcommittee or member if at least two members supported the idea. This minority opinion report does not include arguments or other references to issues that were put into the main report over the protest of a minority of the Task Force members but that is reflected in the votes shown after each issue. No separately prepared opinions have been included that express additional minority opinions although this was discussed at a Task Force meeting. Individual members may submit written or oral comments directly to the Planning Commission on issues that specifically support or oppose in this report. The following comments along with the Task Force vote are arranged in the same order as the main report for easy reference. I.URBAN FORM AND CONTEXT Unresolved Issues: The general issue of infill development and "densification" raised concerns among some members of the Task Force. These.included the following: 1) Development of higher-density housing could have a harmful effect on neighborhood quality of life. This could be especially true for higher-density housing in or near existing R-1 neighborhoods. 2) Redevelopment of existing structures could have a negative effect on the character of certain neighborhoods, particularly the older ones in and around downtown. 3) Redevelopment of existing commercial structures downtown may not be economically viable. 4) The relaxation of parking standards could exacerbate existing parking problems, particularly the amount of on-street parking. 5) The relaxation of open space standards in annexation areas could lead to increased development of existing farmland within the urban reserve line. 11. HOUSING DESIGN,NEIGHBORHOOD CHARACTER AND LIVABILITY The following two paragraphs were removed from the Subcommittee recommended comments on a vote of 10-3. The preceding language was left in as Specific Recommendation 1): a) Common outdoor spaces should create a sense of identity and focus for the development and be usable for a variety of passive recreation and social activities. Common outdoor areas 170 San Luis Obispo City Council Draft Housing Element,January 27,2004 relegated to awkward "leftover" spaces of lots or dominated by parking drives or areas are undesirable. Numeric standards should not be the sole criteria for judging the adequacy of required outdoor space. b) Private outdoor spaces should be contiguous to the units they serve, have adequate dimensions for a variety of uses, be screened from public view, and have exposure to sunlight for a meaningful period of daylight hours. Outdoor spaces whose dimensions are too shallow or narrow, open to public view, or effectively shaded by overhangs, projecting balconies, or other elements, are undesirable. The guidelines should clarify that the minimum "other yard" requirement of five feet should not beused where such yard constitutes the primary private outdoor space for a unit. In such cases, the minimum dimension should be ten feet and no overhead projections or coverings should be allowed. The following paragraph was removed from the Subcommittee recommended comments on a vote of 10-3. The preceding language was left in as Specific Recommendation 3): The Community Design Guidelines encourage building separations and changes in plane and height: These include such building elements as bay windows,porches , arcades, dormers, and so forth to relieve flat walls and roofs of excessive length. At the same time, piecemeal embellishments of facades and frequent changes in materials, particularly in smaller developments or where many individual units stand together are undesirable. The Guidelines should be revised to clarify that the architecture of a building or group of buildings should be a coherent design, and that variety should derive from changes in scale, massing and fenestration. Superficial stylistic variations between adjoining buildings should be avoided. III. PRESERVATION AND ENHANCEMENT OF EXISTING RESIDENTIAL NEIGHBORHOODS AND CONSERVATION OF EXISTING HOUSING STOCK The following sentence was removed from the Subcommittee recommended comments on a vote of 6-4: Retain integrity of open space on each lot. Consider entire area as in a planned development.#8 The following sentence was removed from the Subcommittee recommended comments on a vote of 7-3: To help residents preserve and enhance their neighborhoods, the City will: Identify neighborhoods, and work with residents to prepare neighborhood plans that empower them to shape their neighborhoods. (Also see Land Use Program LU-2.15A.) The following sentence was removed from the Subcommittee recommended comments on a vote of 6-4: Devise strategies to help stabilize the rental/owner ratio, to maintain neighborhood character, safety, and stability. (Also see Land Use Program LU-2.15B.) 171 San Luis Obispo City Council Draft Housing Element,January 27,2004 The following sentence was removed from the Subcommittee recommended comments on a vote of 9-2: Encouraging any infill housing constructed by the university to maintain the character and density of the lowest zoned neighborhood in its vicinity. The following sentence was removed from the Subcommittee recommended comments on a vote of 6-4-1: Use new construction and compliance procedures under the American with Disabilities Act (ADA) to increase the proportion of housing throughout the City that is accessible or adaptable for use by residents with physical disabilities. IV. SUSTAINABLE HOUSING,SITE, AND NEIGHBORHOOD DESIGN In the following sentence, one member believes that there was some support for 60 years or more and staff was not able to determine if more members agreed The statement with "...at least 55 years..." was left in the main report. Create affordable rental housing that stays affordable for at least 55 years, whenever that is possible(see federal tax credit provisions). The following sentence was removed from the Subcommittee recommended comments on a vote of 5-3-1: Maintain existing rear yard green space to provide "lungs" or"green guts" for the core city. V. GOVERNMENT REGULATIONS,PROGRAMS, & PROCEDURES No minority positions. VI. FINANCING AND IMPLEMENTING AFFORDABLE HOUSING The following sentence was removed from the Subcommittee recommended comments on a vote of 8-3: City should provide interim financial and staff support to the CHTF(Countywide Housing Trust Fund). The following sentence was removed from the Subcommittee recommended comments on a vote of 7-4: The City should implement and encourage other jurisdictions to implement such things as real estate transfer fees for funding purposes. The following paragraph was removed from the Subcommittee recommended comments on a vote of 10-1: Provide 50% of new housing as affordable (period). A. Establish comprehensive-enough programs to reach this goal. 172 San Luis Obispo City Council Draft Housing Element,January 27,2004 B. Use growth cap as tool. The following sentence was removed from the Subcommittee recommended comments on a vote of 92: Limit Size of new SFR or place "luxury"tax on them. The following two paragraphs were removed from the Subcommittee recommended comments on a vote of 8-3: One member recommended a 20% general density bonus above and beyond the current allowable densities in all R-2, R-3, and R-4 zones presently located within any present or proposed city core areas (to be determined in the future) of San Luis Obispo. He also recommended an additional 20% general density beyond the initial density bonus for developing any form of attached housing, any multi-family development that exceeds two (2) stories in height, or any "Mixed Use Development" that combines housing with any non-residential land use in order to increase the available housing stock while using developable land in a more efficient manner. Furthermore, He recommended that any housing development that exceeds 5 or more units be given an additional 20% density bonus above and beyond the two previously recommended density bonuses for developments that create 25% or more of the total housing units in a given development that meet the countywide or the local criteria for "Affordable Housing Units." Where developments exceed 20 or more units and create 25% or more of the total housing units as `-`Affordable Units" he recommends a 30% density bonus be given above and beyond the two previously recommended density bonuses. 173 San Luis Obispo City Council Draft Housing Element,January 27,2004 Appendix H Summary of Public Comments on the Draft Housing Element .. .fi:."'Yb`nF:YgYtl4 .8"'LMN.'."::nwaadZFf"?xlk'}�.:pK (To be completed later) 174 San Luis Obispo City Council Draft Housing Element,January 27,2004 Appendix I General Plan Consistency Analysis State law requires general plans to be internally consistent. Therefore, the goals and policies of each element of the general plan must be consistent with other elements so that specific goals and policies in one element do not conflict with or obstruct the accomplishment of those contained in another element. San Luis Obispo's General Plan contains the seven elements required by State law. In addition, the City has also adopted optional elements as part of the General Plan. State law requires that any optional elements adopted at the discretion of the jurisdiction must also be consistent with the General Plan. An analysis of the internal consistency, summarized in Table I-1, was done as part of the Housing Element update process. Through this analysis, it has been determined that the Housing Element is consistent with the goals, policies and programs set forth in the General Plan and its associated elements. 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UC . § aoBdSuedo � uo, I■neo >, >, > ©nP Bi f t $« 00 W wo 2.2 |2 ) � £! ® C 10 � � ) § � ( E � ] 'k 'S &IEk B ) $ © &)7{ ( Liu ( § § j -Az 01 / � E i k=Ca ji / \ f/ k z k0 k�kk §�7 § #�� § • § @ § §_ � - % � F=.S WC! B Cr % LU \ j§ \ 4) COD (a.s 2 �k)�®k | #°k �9 ■ a $l2eIf #a CL 6 A e( LoIL boa ] - - $CW4 eta . « � � ? �� = g$]$t § Appendix J Public Distribution List (To be completed later) San Luis Obispo City Council Draft Housing Element,January 27,2004 Appendix K Mousing Resources and Outreach Information (To be completed later) 190 San Luis Obispo City Council Draft Housing Element,January 27,2004 Appendix L References (To be completed later) 191 i San Luis Obispo City Council Draft Housing Element,January 27,2004 Appendix M Glossary Affordable Housing. Housing that meets the rental or sales price standards as established by the City and published annually in the Affordable Housing Standards. Such housing is made available for very-low, low and moderate income persons or households, and subject to deed restrictions or other instrument that ensure the housing remains affordable for a predetermined period. Assisted Housing. Housing units, including multi-family or single-family, whose construction, financing, sales prices, or rents have been subsidized by Federal, State, or local housing programs, and units developed pursuant to local inclusionary housing and density bonus programs- Below-market-rate Housing. Housing that is sold or rented at prices less than the fair market value or prevailing market rent for the unit, and the financing of housing at less than prevailing interest rates. Boarding/Rooming House. A dwelling or part of a dwelling where lodging is furnished for compensation to more than three persons living independently from each other. Meals may also be included. Does not include fraternities, sororities,convents,or monasteries. Building. Any structure used or intended for sheltering or supporting any use or occupancy. Build-out. That level of urban development characterized by full occupancy of all developable sites within.the City's Urban Reserve, in accordance with the General Plan; the maximum level of development anticipated by the General Plan by the year 2022. Build-out does not assume that each parcel is developed with the maximum floor area or dwelling units possible under zoning regulations. Community Development Block Grant (CDBG). A grant program administered by the U.S. Department of Housing and Urban Development (HUD) on a formula basis for entitlement communities and urban counties, and by the State Department of Housing and Community Development (HCD) for non-entitled jurisdictions. CDBG funds are used by cities and counties for land purchase, housing rehabilitation and community development, public services and facilities, economic development, and other purposes that primarily benefit persons or households with incomes less than 80 percent of County median income. Covenants, Conditions and Restrictions (CC&Rs). Restrictions or requirements that are 192 i San Luis Obispo City Council Draft Housing Element,January 27,2004 placed on a property and its use by a property owner, usually as a condition of subdivision approval. CC&Rs are a deed restriction and"run with the land", and are legally binding. Density Bonus. An increase in the allowed base density applied to a residential development pmject. The increase allows the development of more dwellings than a property's zoning would otherwise allow, and is usually in exchange for the provision or preservation of affordable housing or housing amenity. Density, Residential. The number of permanent dwellings per net acre, measured in Density Units, as further described in Chapter 17.16 of the Zoning Regulations. In the AG, C/OS and R- 1 zones, each dwelling counts as one density unit. In all other zones, dwellings with different bedroom numbers have density unit values as follows: a. Studio Apartment (450 sq. ft. or less) 0.50 Density Unit . b. One-bedroom.Dwelling 0.66 Density Unit c. Two-bedroom Dwelling 1.00 Density Unit d. Three-bedroom Dwelling 1.50 Density Units e.Dwelling with four or more bedrooms 2.00 Density Units Director. The Director.of the City's Community Development Department, or another staff person authorized by the Director to act on his or her behalf. Dormitory. A building used as a group quarters for students, as an accessory use for a college, university,boarding school,or other similar institutional use. Downtown Core. The City's central business district, comprising the most diverse mix of residential, commercial, governmental, and public uses, and defined by the "C-D"zone boundary as shown in the Zoning Map. Downtown Planning Area. The central area of the City generally defined by the boundaries formed by State Highway 101, the Union Pacific Railroad Right-of-Way, and High Street, and the intersections thereof, as described in the General Plan Land Use Element. Elderly or Senior Housing. Housing designed to meet the needs of and enforceably restricted to occupancy by persons 62 years of age and older or, if more than 150 units, persons 55 years of age and older. Expansion Area An area located outside City limits but within the Urban Reserve and designated for future urban development, as further described in the General Plan Land Use Element text and map. Fair Market Rent. The rent, including utility allowances, determined by the United States Department of Housing and Urban Development ("HUD") for purposes of administering the 193 San Luis Obispo City Council Draft Housing Element,January 27,2004 Section 8 Housing Choice Voucher Program. Fraternity House (or Sorority House). A Residence for college or university students who are members of a social or educational association, and where such as association holds meetings or gatherings. Granny Flat See"Second Residential Unit." High Occupancy Residential Use. Any dwelling other than a Residential Care Facility as defined in the Zoning Regulations, that is located in the R-1 or R-2 zones and is occupied by six or more adults. Historic Property. A property, including land and building, determined by the City to have archaeological, historical, or architectural significance as described in the Historic Preservation Program Guidelines, and listed on the Contributing Properties List or Master List of Historic Resources. Household. All persons, including those related by birth, marriage or adoption and unrelated. persons, who occupy a single dwelling. Housing or "Dwelling" Unit A building, a modular home, a mobile home, a cooperative, or any other residential use considered real property under State law and on a permanent foundation, with provisions for sleeping,cooking and sanitation, and with permanent connections to utilities. Infill Housing. Development of housing on vacant or underutilized lots within the City limits on property zoned for such uses. Jobs-Housing Balance.. A ratio describing the number of jobs compared with dwelling units in a defined geographic area, and a measure of the adequacy of the housing stock to meet community needs. Live-Work or Work-Live Unit An integrated housing unit and work space, occupied and utilized by a single household in a structure, either single-family or multi=family, that has been designed or structurally modified to accommodate joint residential occupancy and work activities, and which includes: 1) Complete kitchen and sanitary facilities in compliance with City building code, and 2) Working space reserved for and regularly used by one or more occupants of the unit. The difference between "live-work" and "work-live" units is that the work component of a five- work unit is secondary to its residential use, and may include only commercial activities and pursuits compatible with the character of a quiet residential environment, while the work component of a work-live unit is the primary use, to which the residential component is 194 San Luis Obispo City Council Draft Housing Element,January 27,2004 secondary. Mixed-Use Development. Development in which various uses, such as office, commercial, manufacturing, institutional, and residential are combined in single building or in multiple buildings on a single parcel or on multiple, contiguous parcels, developed as integral unit with significant functional interrelationships and a coherent physical design; property designated "MU" on the City's Zoning Map. Multi-family Dwelling. A dwelling that is part of a structure containing one or more other dwellings, or anon-residential use. An example of the latter is a mixed-use development where one or more dwellings are part of a structure that also contains one or more commercial uses (retail, office, etc.). Multi-family dwellings include: duplexes, triplexes, fourplexes (buildings under one ownership containing two, three or four dwellings, respectively, in the same structure); apartments (five or more units under one ownership in a single building); and townhouse development (three or more attached dwellings where no unit is located above another unit. It does not include Granny Flats or Secondary Dwelling Units. Municipal project. A development project designed, funded, or carred out by the City of San Luis Obispo and described as a"capital project" in the City's Financial Plan. Parcel. A area of land defined by boundaries set by the Tax Assessor of the County of San Luis Obispo, roughly equivalent to the meaning of a"lot" for development purposes. Regional Housing Needs Assessment (RHNA). A determination of a locality's housing needs by the local Council of Government and based on State law, that takes into account various factors such as population growth, employment growth, vacancy rates, housing removals, and concentration of poverty. Rehabilitation. The repair, preservation, and or improvement of housing; and for historically designated structures, work done according to rehabilitation standards established by the U.S. Secretary of the Interior and described in the Secretary of the Interior's Standards for the Treatment of Historic Properties and related documents. Residential. Land designated in the General Plan and Zoning Regulations for dwellings and accessory uses. Second Residential Unit. An attached or detached studio, or one-room dwelling, with not more than 450 square feet of gross floor area and that includes permanent provisions for cooking; sleeping and sanitation, and is located on the same parcel on which the primary dwelling unit is located,pursuant to requirements in Ch. 17.21 of the Zoning Regulations. Sensitive Site. A site determined by the Community Development Director, Planning or Architectural Review Commission, or City Council, to have special characteristics or limitations, such as historic significance, creekside location, or visual prominence, requiring more detailed 195 San Luis Obispo Ciry Council Draft Housing Element,January 27,2004 development review than would otherwise be required for other similarly zoned lots nearby. Single-family Dwelling,Detached. A dwelling occupied or intended for occupancy by only one household, and that is structurally and physically separate from any other such dwelling. Single Room Occupancy (SRO) Unit. A single-room dwelling, typically 80-250 square feet in floor area, with a sink and a closet, with communal facilities for cooldng and sanitation. Tenure. The mode or status of residency, whether by renting or owning real property. Transitional Housing. Housing provided to homeless persons, abused women or children, or other persons with special housing needs for a temporary period, and generally integrated with other social services and programs including counseling, education, and training to assist in the transition to self-sufficiency through gaining stable income and permanent housing. i 004h=io k=ntCcamft1-27-04 196