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HomeMy WebLinkAbout2025-04-15; City Council; 07; State Housing Law and LegislationCA Review CKM Meeting Date: April 15, 2025 To: Mayor and City Council From: Geoff Patnoe, City Manager Staff Contact: Cindie K. McMahon, City Attorney cindie.mcmahon@carlsbadca.gov, 442-339-2891 Jeff Murphy, Community Development Director jeff.murphy@carlsbadca.gov, 442-339-2783 Jason Haber, Intergovernmental Affairs Director jason.haber@carlsbadca.gov, 442-339-2958 Subject: State Housing Law and Legislation Districts: All Recommended Action Receive a report regarding recent developments in state housing law and a report regarding pending state housing legislation and the city’s advocacy efforts. Executive Summary In recent years, the state legislature has passed numerous laws intended to stimulate housing production and remove perceived local impediments to housing production. Margaret Sohagi, a Principal in Meyers Nave’s Land Use and Environmental Law practice group, will provide a report on recent developments in state housing law and Sharon Gonsalves, Managing Director of California Public Policy Group, will provide a report on pending state housing legislation and the city’s advocacy efforts. Topics discussed will include: • California Environmental Quality Act exemptions • Housing Accountability Act • Density Bonus Law • Mitigation fees The report will be general and educational and will not include a discussion of specific projects within the city or litigation involving the city. Fiscal Analysis The funding for this report is included in the fiscal year 2024-2025 budget. No additional funding is being requested. April 15, 2025 Item #7 Page 1 of 22 Environmental Evaluation The proposed action is not a “project” as defined by California Environmental Quality Act Section 21065 and CEQA Guidelines Section 15378(b)(5) and does not require environmental review under CEQA Guidelines Section 15060(c)(3) and 15061(b)(3) because the proposed action to report on state housing law and legislation is an organizational or administrative government activity that does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. Any subsequent action or direction stemming from the proposed action may require preparation of an environmental document in accordance with CEQA or the CEQA Guidelines. Exhibits 1.Information Bulletin IB-198 – The Housing Challenge 2.Information Bulletin IB-150 – California Environmental Quality Act 3.Information Bulletin IB-112 – Density Bonus April 15, 2025 Item #7 Page 2 of 22 Community Development Department | 1635 Faraday Ave. | Carlsbad, CA 92008 | www.carlsbadca.gov The Housing Challenge IB-198 The high cost of housing in California, especially in coastal cities, has been a concern for decades. New housing built over the past 10 years is only about half as much as what projections say is needed. This lack of supply has created greater demand and higher prices. According to the Public Policy Institute of California, in 2004, 31% of Californians said housing was causing a financial strain. By 2019, that number jumped to 52%, resulting in what many are calling a statewide housing crisis. In response, the state legislature has increasingly flexed its authority and adopted --- and continues to adopt --- legislation that makes it easier and quicker for homes to be built, while simultaneously reducing a city’s ability to say, “no.” To better understand the housing challenges in Carlsbad, this info-bulletin will cover the following topic points. •Contributing factors behind the housing crisis •Implications if the housing crisis not addressed •How the city is accommodating housing needs •State legislature’s reaction to the housing crisis •Consequences of ignoring state housing laws THE HOUSING CRISIS State of California California is one of the most populous states in the nation and home to Silicon Valley technology, Hollywood movie stars and Napa Valley wines. From its stunning coastlines to soaring mountains, the diverse scenery in this state is unlike anything else in the nation. And the great weather allows folks to enjoy outdoor amenities pretty much all year round. But it all comes at a cost. California’s cost of living is among the highest in the U.S., hovering around 40% higher than the national average1. There are several contributing factors to California’s high living costs including state taxes, state regulations, healthcare, food, utilities…and the availability of affordable housing. Consider… For the past 66 years, population growth in California experienced a net gain of 24.1 million people, which equates to an average annual increase of 2.5%2. Focusing on the last 10 years, an average of 80,000 housing units have been built per year, far below the 160,000 units needed annually to keep up with the population. This projected need already considers the fact that California’s population decreased an average of 0.4% each year between 2020 and 2023. Low production has not always been the case. From 1955 to 1990, more than 200,000 homes were built annually in California, and a much greater percentage were multifamily (apartments and condos), in contrast to the more recent focus on larger unit residential development. This lack of supply greatly affects housing affordability. Without an adequate supply of housing, basic market/demand principles prevail, resulting in increased home prices. For housing costs to be considered affordable, financial experts advise that a family’s monthly rent/mortgage payment should not Documents Referenced Informational Bulletins; Library Housing Element Annual Progress Reports; Library State HCD Certification; Letter Accessory Dwelling Units; IB-111 State Density Bonus; IB-112 Carlsbad Housing Element; IB-137 AB 2097 Relaxed Parking Standards; IB-131 SB 330 Housing Crisis Act; IB-132 AB 2011 Affordable Housing & High Roads Act; IB-134 SB 35 Multifamily Permit Streamlining; IB-135 SB 6 Middle-Class Housing Act; IB-136 Mills Act Program; IB-161 Accessory Dwelling Units, Unpermitted; IB-254 Objective Design Standards; IB-302 Exhibit 1 April 15, 2025 Item #7 Page 3 of 22 Page 2 of 6 IB-198_The Housing Challenge_October 2024 exceed 30% of their gross annual household income. Anything more will negatively affect a family’s ability to save money, prepare for unexpected financial hardship, or even afford the things that make life more enjoyable. So, how affordable is housing in California? Well…not very. The current average home price in California is $787,0003. This equates to a monthly mortgage of roughly $5,2354. The median monthly rent for a typical apartment in California is $2,8635. According to the U.S. Census Bureau, the median household income in California is $91,5516. At this income rate, for a family to afford an average priced home in the state, almost 70% of their monthly income would need to go toward their mortgage payment --- close to 40% if they were renting. City of Carlsbad The housing challenges experienced at the state level are even more significant in Carlsbad. The city offers the charm of a small beach town with the convenience and amenities of an established city, including miles of coastline, ample open space, beautiful parks, and a thriving innovation economy. Living in such a desirable community is expensive. While California’s cost of living is roughly 40% above the national average, Carlsbad is closer to 97% above the national average1. Despite the costs, however, the city’s population has increased roughly 2.7% each year for the past 44 years, going from 35,500 people in 1980 to 115,000 in 2024. In response, home prices in the city have soared. The current average home price in Carlsbad is $1,565,0007, almost double the state price. This equates to a monthly mortgage payment of roughly $10,4004. The median rent for a typical apartment in Carlsbad is currently $4,3508. According to the U.S. Census Bureau, the median household income in Carlsbad is $146,5969. Although 60% higher than the state reported household income, for a family to afford an average priced home in the city, almost 85% of their monthly income would need to go toward their mortgage payment -- close to 36% if they were renting. Implications & Impacts Cities today are not approving enough housing to meet the projected needs, which is driving up prices and causing a whole host of unintended consequences – from employers not being able to find enough workers, to adult children being priced out of their hometowns, and an increase in people experiencing homelessness for the first time. We have seen all of these effects right here in Carlsbad. These pressures have been cited regionally by several companies as a contributing factor to relocating out of San Diego or prioritizing growth in other areas. This is not a new trend, but it has been exacerbated over the last several years. According to a study of San Diego County small businesses, the number one challenge for small business owners is trouble finding workers (55% of respondents noted this challenge). The third biggest challenge is retaining workers (43% of respondents noted this as a challenge). In a presentation given by the San Diego Regional Economic Development Corporation, it was noted that a driving factor of these challenges is the cost of living for workers. It was also noted that these issues were not the top challenges just five years ago.10 LOCAL HOUSING PLAN State Requirements Since 1969, California has required that all cities and counties adequately plan for their share of the state’s projected housing needs. While cities do not build housing – that is the function of private developers – they do adopt plans, regulations and programs that influence how and where housing development occurs. One of the most important housing policy documents used by jurisdictions is the General Plan. The General Plan serves as the “blueprint” for how a city will grow and develop and includes seven state required chapters, referred to as “elements” --- land use, transportation, conservation, noise, open space, safety, and housing elements. Under state housing laws, a jurisdiction’s Housing Element must: April 15, 2025 Item #7 Page 4 of 22 IB-198_The Housing Challenge_October 2024 Page 3 of 6 • Provide goals, policies, quantified objectives and scheduled programs to preserve, improve and develop housing. • Identify and analyze existing and projected housing needs for all economic segments and income levels of the community. • Identify adequate properties that are zoned and available within the eight-year housing cycle to meet the city’s fair share of regional housing needs at all income levels. • Be certified (approved) by the State Department of Housing and Community Development (HCD) as complying with state law. Carlsbad Housing Element After a yearslong community outreach and engagement effort, the City Council on April 6, 2021, approved Resolution No. 2021-073, which introduced the city’s eight-year housing plan ---The 2021-2029 Carlsbad Housing Element. On July 13, 2021, the California Department of Housing & Community Development (HCD) issued a letter certifying the city’s housing plan as being in compliance with the minimum mandatory requirements of state housing law. The City of Carlsbad is happy to report that the city remains in good standing with HCD and remains on track to complete all required housing programs listed in the Carlsbad Housing Element. This is important as explained later in this bulletin. The city’s General Plan & Housing Element Annual Progress Reports are posted on the city’s website so the public can track the city’s progress. STATE’S RESPONSE Over the past decade, the state legislature has expanded and amended state law as part of the overall recognition of the critically low volumes of housing stock in California. In the state legislature’s mind, local jurisdictions are not doing enough to address the need for more affordable housing. According to the state, this is, in part, because growth and development are unpopular in many cities, and local elected officials face pressure from their constituents to deny new housing projects. Most of the bills passed by the state make it easier and faster for housing projects to be constructed while limiting a local government’s ability to deny, reduce the density of, or make infeasible those housing projects. Some of the more significant state laws are summarized below. Density Bonus In exchange for making some of the new units affordable to low-income families (as few as 5% of the units), state density bonus law gives a developer the right to increase the total number of homes allowed on a property, in some cases double the number of units allowed by a city. For example, if the city’s general plan allows a maximum of 25 units on a property, the state density bonus law allows the In the state legislature’s mind, local jurisdictions are not doing enough to address the need for more affordable housing. April 15, 2025 Item #7 Page 5 of 22 Page 4 of 6 IB-198_The Housing Challenge_October 2024 developer to build up to 50 units. The law also allows developers to reduce city development standards, such as setbacks and height limits when those standards prevent the developer from achieving the density allowed under state law. More info: IB-112 Accessory Dwelling Units Over the past decade, the legislature has made several modifications to state housing laws, progressively making it easier and less expensive for property owners to build accessory dwelling units, often called ADUs. The state also passed a bill making it possible to obtain a retroactive building permit for an unpermitted accessory dwelling unit. More info: IB-111 & IB-254 Housing Accountability Act The Housing Accountability Act (HAA) is a state law limiting a local government’s decision-making authority over certain housing development projects, specifically, projects that include affordable housing units. The state legislature first enacted the HAA in 1982. Over the years, the legislature has amended the HAA, which today involves a multitude of interconnected and overlapping government code sections. Most notably, the HAA requires cities to only apply objective standards to development project (not subjective standards open to interpretation) and set the framework for The Builder’s Remedy, which is discussed further in this bulletin. Housing Crisis Act (SB 330) The Housing Crisis Act (HCA), which amended the HAA, set forth several pro-housing provisions, including applicant vesting rights, shortened timelines to review applications, limiting the number of public meetings (a maximum of 5, including required community meetings), and limitations on a city’s ability to deny a housing project that meets established development requirements. More info: IB-132 Relaxed Parking Requirements (AB 2097) Restrictions imposed by the state legislature under AB 2097 limit the city’s ability to require minimum parking standards on private development projects when located within ½ mile from the Carlsbad or Poinsettia Coaster Stations. More info: IB-131 Multifamily Permit Streamlining (SB 35) SB 35, which became effective Jan. 1, 2018, adopted several provisions designed to promote housing production throughout the state, including a streamlined, expedited ministerial (by-right) review process for multifamily housing developments. More info: IB-135 Housing on Commercial Sites (SB 6 & AB 2011) SB 6 (Middle-Class Housing Act) allows residential development on property that is specifically designated for onlycommercial use. SB 6 was adopted the same year as AB 2011 (Affordable Housing and High Roads Act), which also allows residential development on commercial property. More info: IB- 134 & IB-136 CARLSBAD’S RESPONSE In addition to the adoption of the previously mentioned Carlsbad Housing Element, the City of Carlsbad has taken steps to preserve as much local control as possible when it comes to new development. Legislative Advocacy The City Council established a Legislative Subcommittee to work with city staff and the city’s professional lobbyists to advocate for local interests at the state and federal level. This includes promoting legislation that preserves local control over land uses. More info: Legislative Committee Updated Growth Management Plan The city has begun work on an updated growth management plan to help protect our future quality of life. The first step was a citizens committee that met for over a year to review and suggest updates to current standards for things like parks, roads and libraries. The City Council approved the committee’s recommendations and directed staff to continue work on the new plan. More info: GMP update April 15, 2025 Item #7 Page 6 of 22 IB-198_The Housing Challenge_October 2024 Page 5 of 6 Objective Design Standards In response to recent state housing regulations and to strengthen local design regulations, the city has established objective design standards for multifamily housing and mixed-use development projects. This helps ensure new projects better fit in with the existing character. More info: IB-302 Preserving our History The City Council approved a local Mills Act Program to encourage the restoration and preservation of historic buildings to honor Carlsbad's local history and culture. Learn more about the historic preservation process, incentives and programs. More info: IB-161 THE BUILDER’S REMEDY State Authority Over Local Decisions Under state law (§65589.5(j)(1)), a proposed housing project that complies with a city’s land use regulations (i.e., housing element, zoning, subdivision standards, design criteria) cannot be denied unless the city finds specific, adverse impacts to public health and safety. The criteria for a “specific, adverse impact” are difficult to meet. Under the law, a “specific, adverse impact” means a significant, quantifiable, direct, and unavoidable impact, based on objective, identified written public health or safety standards, policies, or conditions as they existed at the time of application, and there is no feasible method to satisfactorily mitigate or avoid the adverse impact. Put another way, simply stating that a proposed housing project will increase traffic and result in unsafe conditions is not enough to deny the project…the traffic impacts must be quantified and measured against established, published standards that existed when the application was filed and there must be no way to satisfactorily mitigate or avoid the impact. Court Challenges As local control over land use decisions continues to be eroded by state laws, some have asked why jurisdictions don’t fight back by legally challenging those laws, or even ignoring them. In approving these bills, the state legislature made repeated findings that the lack of market-rate and affordable housing is a critical problem that threatens the economic, environmental and social quality of life in California. There have been several legal challenges to many of these pro-housing laws, most of which involve a lawsuit filed following the approval or denial of a housing project. Some of the more noteworthy cases include Save Livermore Downtown v. City of Livermore (‘22) and CA Renters Legal Advocacy & Education Fund v. City of San Mateo (‘21). This bulletin does not get into the merits of the legal challenges, but the outcomes were virtually the same…the courts affirmed the constitutionality of the housing laws, and that their mandates are to be taken seriously. The implications of not complying with the state housing laws, and the developer allowances provided under state law are discussed below. Dept. of Housing & Community Development Assembly Bill 72, which passed in 2017, authorized the California Department of Housing & Community Development (HCD) to review “any action or failure to act” by a city that it determines “inconsistent” with the city’s adopted housing element or housing laws. Under this provision, if HCD determines that a city’s action or lack of action does not “substantially comply” with state housing laws or the city’s adopted housing element as certified by the state, then HCD may revoke its certification of the city’s housing element until it determines that the city has come into compliance. Additionally, HCD may also notify the CA Office of the Attorney General that the city is in violation of state law, and that office may take legal action against the city. And the state is not shy in threatening jurisdictions, or even acting upon their threat to decertify an adopted housing elements if they find that the jurisdiction is failing to comply with state housing laws. For example: • In spring 2024, Portola Valley became the first city to have its housing element decertified. State officials said the town's council had failed April 15, 2025 Item #7 Page 7 of 22 Page 6 of 6 IB-198_The Housing Challenge_October 2024 to make the necessary changes in zoning to accommodate its assigned housing numbers. • In fall 2024 the Governor’s office announced that the City of Norwalk’s housing element was decertified for failure to approve affordable units and passing legislation that banned shelters and housing for those at risk of homelessness. • As of the writing of this bulletin, none of the housing elements in the San Diego region have been decertified, but there have been some cities that have denied housing projects and received threatening letters from HCD (Sample NOV Letter) forcing them to reconsider their actions. Builder’s Remedy State housing laws offer significant protections to proposed development projects that include a certain number of affordable units --- as low as 20% of the total units in the project. Pursuant to Govt. Code §65589.5(d), a jurisdiction must make one of five findings to deny such housing projects. One of those findings is a determination that the project is inconsistent with both the zoning ordinance and the land use designation as specified in any general plan element. Under the state’s eyes, a housing element that is not certified by HCD is not enforceable, even if it was officially adopted by the local legislative body (i.e., city council). Without an enforceable housing element, a jurisdiction is not able to make the above required inconsistency finding. This state law provision creates what has been coined the “Builder’s Remedy.” A city that does not have an HCD certified housing element loses its authority to reject a proposed housing project on the grounds that they are inconsistent with local zoning and general plan requirements…even if the city’s adopted zoning designation expressly prohibits housing on a site. Put another way, without a state approved housing element developers are allowed to place an affordable housing project pretty much anywhere in the city, with limited say-so by the city council. Developers are very much aware of Builder’s Remedy and have applied the allowance in cities that lack a certified housing element. For example: • The City of San Jose received a Builder's Remedy application initially proposing 3,500 homes to be built on commercial property that was once home to the city's flea market. • The City of Palo Alto received a Builder's Remedy application for a housing project that includes 177-foot-tall tower in a zone that limits building height to 50 feet. • Beverly Hills received upward of six Builder's Remedy applications, one of which would involve a 15-story apartment building on an existing parking lot. • Locally, the City of Del Mar is struggling with a Builder's Remedy application that proposes high density residential development along Del Mar bluffs, and the list goes on. If the City of Carlsbad continues to follow its housing element, complies with state housing laws and approves projects consistent with its general plan, the city will avoid the implications of Builder’s Remedy…which means we continue to have a choice where housing gets built and how much. YOUR OPTIONS FOR SERVICE To learn more please contact the Planning Division at 442-339-2600 or via email at Planning@carlsbadca.gov. CITATIONS 1 Council for Community & Economic Research (C2ER), January 2024. 2 United States Regional Economic Analysis Project. Retrieved from California vs. United States | Population Trends over 1958-2023 (reaproject.org) x California’s Housing Future: Challenges and Opportunities, Final Statewide Housing Assessment 2025. Retrieved from SHA_Final_Combined.pdf (ca.gov) 3 California Housing Market Home Value (Zillow, July 2024). Retrieved from California Housing Market: 2024 Home Prices & Trends | Zillow 4 Assumes a 30-year mortgage, 7% interest, no money down. 5 California Rental Market (Zillow, July 2024). All bedroom types. Retrieved from Average Rental Price in California & Market Trends | Zillow Rental Manager 6 U.S. Census Bureau. Retrieved from California - Census Bureau Profile 7 Carlsbad Housing Market Home Value (Zillow, July 2024). Retrieved from Carlsbad, CA Housing Market: 2024 Home Prices & Trends | Zillow 8 Carlsbad Rental Market (Zillow, July 2024). All bedroom types. Retrieved from Average Rental Price in Carlsbad, CA & Market Trends | Zillow Rental Manager 9 U.S. Census Bureau. Retrieved from Carlsbad city, California - Census Bureau Profile 10 EDC, SBDC Research shows talent acquisition is greatest challenge to small businesses (San Diego and Imperial County Small Business Development Center Network and San Diego Regional Economic Development Corporation, May 2024). Retrieved from https://www.sandiegobusiness.org/blog/edc-sbdc-research-show-talent- acquisition-is-greatest-challenge-to-small-businesses/ April 15, 2025 Item #7 Page 8 of 22 Community Development Department | 1635 Faraday Ave. | Carlsbad, CA 92008 | www.carlsbadca.gov CALIFORNIA ENVIRONMENTAL QUALITY ACT IB-150 The California Environmental Quality Act (CEQA) is one of the most important state environmental protection laws affecting project-related processing and decision-making in the public sector. CEQA is an evolving policy that has been updated by the state legislature and interpreted by the courts many times over the years. As CEQA is mainly a process, this Info-Bulletin outlines the city’s processing requirements and CEQA’s role in development. Visit our CEQA Website to review the different city documents referenced in the bulletin. BACKGROUND The California Environmental Quality Act, which became law in 1970, is our state’s landmark environmental law. CEQA applies to all discretionary actions undertaken or funded by a public agency. Its basic purpose has been to foster transparency and integrity in public decision-making so that consideration is given to preventing or minimizing damage public decisions may have on the environment before the action is approved or carried out. CEQA’s fundamental goals are relatively basic: •Disclose the potential significant adverse impacts of a project to the public and decision-making body. •Prevent or minimize damage to the environment through project alternatives and mitigate significant impacts when feasible. •Offer opportunities for the public and other agencies to become involved in the review process. •Require decision-makers to consider the balance between development and the environment. While there are several elements and components to CEQA that help determine whether a project may adversely impact the environment and what requirements need to be met if impacts are identified, CEQA regulatory authority essentially comes from two complimentary state code sections. CEQA STATUTE CEQA’s legislative authority is rooted within Public Resources Codes (PRC) §21000 – 21006 and sets forth the overarching regulation and policy for environmental review and protection. This is referred to as CEQA statute. CEQA GUIDELINES CEQA Guidelines, which are periodically updated by the Governor’s Office of Planning & Research (OPR) and the California Natural Resources Agency (CNRA), are state administrative regulations that public agencies follow in order to show compliance with CEQA statute, applicable court decisions, and practical planning considerations. The regulatory authority for the guidelines are found in the CA Code of Regulations (CCR) §15000 - 15387, which set forth the steps on how to determine whether an activity is subject to environmental review, what steps are involved in the environmental review process, and the required content of environmental documents. CARLSBAD ENVIRONMENTAL PROCEDURES The city adopted §19.04, which establishes the procedures for evaluating the environmental impacts of public and private projects and for administering the city’s responsibility under CEQA. This chapter is intended to supplement state CEQA guidelines. Exhibit 2 April 15, 2025 Item #7 Page 9 of 22 Page 2 of 7 IB-150_Environmental Review July 2022 BASIC ELEMENTS OF CEQA REVIEW CEQA is not a permit, and it does not grant cities any new powers to regulate property. CEQA is a process through which public agencies, project developers, and general public must evaluate a project, understand its environmental impacts, and develop measures to reduce those impacts which must be publicly vetted before a decision can be made. And as with any process, there are steps that must be followed. ONLY “PROJECTS” ARE SUBJECT TO CEQA When the term “CEQA review” is used, visions of technical studies and detailed analysis often come to mind. In actuality, however, many city actions and activities are either exempt from, or otherwise do not require review under CEQA. Before initiating any environmental review, the city must first determine whether the action or activity being considered even requires review under CEQA. City actions and activities requiring review pursuant to CEQA are referred to as a “project.” Sections §21065, §15378, and §15060(c)(3) provide definitions, but generally, a CEQA project includes any action taken by a public agency where discretion is applied and if approved, the action has the potential to cause one of the following: •A direct physical change in the environment; or, •A reasonably foreseeable indirect physical change in the environment. CERTAIN PROJECTS ARE EXEMPT FROM CEQA If the action is found to be a project, the city then determines whether the project is exempt under CEQA, which there are three types of exemptions to consider. •Statutory Exemptions Statutory exemptions (§21080) are created by the state legislature and found in CEQA Guidelines §15260-15285. A project that falls within a statutory exemption is not subject to CEQA even if it has the potential to significantly affect the environment. Common statutory exemptions applied to city projects include the following: o Ministerial (building) permits (§15268) o Business licenses (§15268) o Feasibility & planning studies (§15262) o Emergency projects following disaster (§15269) o Approval of new permit fees (§15273) •Categorical Exemptions Unlike statutory exemptions, which are adopted by the California Legislature, state law (§21084) directs the CRNA to adopt classes of projects that are determined to not have a significant effect on the environment (§15300-15333). Common categorical exemptions applied by the city include the following: o In-fill development (§15332) o Leasing agreements (§15301) o Minor alteration to land (§15304) o Minor alteration of existing structures (§15301) o Minor land divisions (§15315) However, unlike statutory exemptions, under state law a project that falls within a categorical exemption may still not be exempt from CEQA under the following conditions: o Reasonable possibility of a significant effect on the environment due to unusual circumstances; o Significant cumulative impacts from projects of the same type will result; or o The project will have impacts on a “uniquely sensitive environment.” Regarding the above third condition, city code (§19.04.070.B) provides specificity on what qualifies as “uniquely sensitive environment” such as impacts to sensitive, rare, endangered, or threatened habitat, wetlands, hazardous materials, archaeological or cultural resources, or other factors requiring special review. •Common Sense Exemptions Common Sense Exemptions (§15061(c)) apply only to projects where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment. April 15, 2025 Item #7 Page 10 of 22 IB-150_Environmental Review July 2022 Page 3 of 7 INITIAL STUDY If the project does not fall under an exemption, the city then undertakes an “initial study” to determine what type of environmental document is needed to support the processing of the application. An initial study is a preliminary analysis comprised of a series of questions prepared by the “lead agency” (typically, the city) to determine if the project may have a significant impact on the specified environmental resource, thereby requiring mitigation measures or project changes in order to reduce the impacts to a level of less than significant (PRC §21080(c); Guidelines §15063–15065) Generally, the city utilizes the initial study template found in Appendix G (Environmental Checklist Form) of the CEQA Guidelines to assist city staff and environmental consultants with the preparation and analysis of environmental documents. Included in the checklist are environmental issues presented in the form of questions that are intended to identify the potential impacts of proposed projects. In terms of addressing potentially significant adverse impacts, the impact threshold questions provided in Appendix G may be used as guidelines to determine the level of significance for any given impact, provided that they are relevant to a project's environmental effects and supplemented as necessary to address additional environmental effects specific to the proposed project, the project site, and its surroundings. The preparation of the initial study should be based on a comprehensive project description, initial research, site visit, technical studies (if determined necessary), and other available and relevant documentation. GUIDELINES FOR DETERMINING SIGNIFICANCE So, when is an impact “significant?” Good question. To assist in determining whether a specific impact is significant under CEQA, public agencies are encouraged to develop administrative guidance often referred to as thresholds of significance (Thresholds). Thresholds help establish a clear bright line or standard for when a city determines an impact is significant under CEQA. That is, a threshold for a given environmental impact defines the level above which the city will normally consider impacts to be significant, and below which it will normally consider impacts to be less than significant. Thresholds may be defined either as quantitative or qualitative standards, or sets of criteria, whichever is most applicable to each specific type of environmental impact. For example, quantitative criteria are often applied to traffic, air quality, and noise impacts, while aesthetic impacts are typically evaluated using qualitative thresholds. A city may gather and apply thresholds of significance from a variety of places including, but not limited to, general plan policies, ordinances, resolutions, other agencies’ thresholds, and industry standards. Often thresholds change in response to CEQA case law; refinement of recognized scientific analysis of impact thresholds; or changes in federal, state, and local regulations. In some cases, a city may utilize project- specific significance thresholds. For Carlsbad, the city developed and maintains Significance Determination Thresholds, which provide general technical guidance in evaluating the potential significance of a project’s impact on each environmental issue listed in the Environmental Checklist Form. April 15, 2025 Item #7 Page 11 of 22 Page 4 of 7 IB-150_Environmental Review July 2022 SCREENING CRITERIA In another method similar to creating significance thresholds, public agencies are encouraged to develop “screening criteria” to help quickly and easily screen out projects that are likely not to cause significant environmental impacts. The city has developed and maintains Screening Criteria for a few resources. Projects that meet established screening criterion are presumed to not have a significant environmental impact on a particular environmental resource and therefore do not require additional mitigation. In some cases, applicants may need to prepare an analysis to prove that their project meets established screening criteria. Projects that do not meet the screening criteria may be required to complete additional analysis (technical studies) and compare the findings with the appropriate threshold of significance and mitigate the impacts accordingly. TECHNICAL STUDIES Technical studies are often required to assist in preparing the initial study, or to determine and document whether a project has a less than significant impact. These studies may be prepared by staff or an outside consultant. If prepared by a consultant, the study shall be reviewed by city staff, or a third-party consultant hired by the city. To help ensure the quality, accuracy, and completeness of technical reports and increase the efficiency of the environmental review process and avoid unnecessary time delays, the city encourages consultants to follow the Report Format and Content Requirements for each study type as established by the County of San Diego. PREVENTING ENVIRONMENTAL DAMAGE If potential adverse environmental impacts are identified, the CEQA process next attempts to identify ways to prevent or reduce these impacts to a level of less than significant by requiring consideration of mitigation measures. Pursuant to CCR §15370, mitigation includes: o Avoiding the impact altogether by not taking a certain action or parts of an action. o Minimizing impacts by limiting the degree or magnitude of the action and its implementation. o Rectifying the impact by repairing, rehabilitating, or restoring. o Reducing or eliminating the impact over time by preservation and maintenance operations during the life of the action. o Compensating for the impact by replacing or providing substitute resources or environments. Project revisions may also be utilized to reduce impacts, with changes in design, location, operations, or scope. Effective project revisions will achieve any or all of the above objectives. In reaching its conclusions, the city must use its own independent and objective judgment, based on the information before it, to determine that "clearly no significant effect on the environment would occur" (PRC §21064.5). Further, there must be evidence in the record as a whole to support the conclusion that the level of mitigation or project revision sufficiently avoids or eliminates a potential significant effect. Upon approval, the city must also adopt a mitigation monitoring or reporting program (CCR §15097). April 15, 2025 Item #7 Page 12 of 22 IB-150_Environmental Review July 2022 Page 5 of 7 TYPES OF CEQA DOCUMENT PREPARED Following completion of the initial study, the public agency then must determine what type of environmental document to prepare. CCR §15063, 15365; PRC §21080.1, 21080.3 o Negative Declaration (ND) This document is used for projects that will not result in any significant impact on the environment. CCR §15071 o Mitigated Negative Declaration (MND) This document is reserved for projects where specified mitigation measures are necessary in order to reduce the impacts to a level of less than significance. CCR §15071 o Environmental Impact Report (EIR) This document is often reserved for projects that cannot fully mitigate their impacts to a level of less than significance. In order to approve the project, the city must find, supported by substantial evidence, that the economic and social benefits of the project override any significant environmental impacts that would result from the project, commonly referred to as a Statement of Overriding Consideration. PRC §21100/CCR §15120 KEY CEQA PROCESSING TIMELINES Most permit processing timelines are driven by statute. The section below highlights the most common deadlines, but for more information on the entire process flows for discretionary permits, refer to the Community Development Department’s Permit & Service Delivery Guide. STARTS WITH A COMPLETE APPLICATION The Permit Streamlining Act (CCR §65920 et seq) was enacted in 1977 in order to expedite the processing of permits for development projects by imposing time limits within which local agencies must either approve or disapprove permits. Once an application is submitted, the city has 30 days to inform the applicant whether the application is complete (CCR §15060(a), 15101). If incomplete, the applicant addresses the deficiencies and then resubmits the application, which starts a new 30-day review period. If the agency fails to inform the applicant within the 30-day period, the application is "deemed complete" (CCR §65943) and the city is limited in requesting any new information from the applicant. Environmental processing commences after a development application is determined to be complete for processing and the permit applicant provides the necessary reports, studies, and documents required for environmental review. EXEMPTIONS For projects that are eligible for a statutory, categorical, or common-sense exemption. •The project must be presented for decision within 60 days from date application is deemed complete. •The Notice of Exemption (NOE) must be publicly posted for five business days and appealed within ten calendar days of the City Planner’s decision. April 15, 2025 Item #7 Page 13 of 22 Page 6 of 7 IB-150_Environmental Review July 2022 •The decision-making authority for the discretionary permit/action does NOT approve the use of the exemption as part of their decision on the discretionary permit and/or action; that responsibility resides solely with the City Planner. •The exemption determination and relevant findings shall be made part of the recitals within the approving resolution/ordinance that is prepared for discretionary permit/action. •The NOE is filed with the County Clerk within five days following approval of the project. A timely filed NOE establishes a 35-day statute of limitations for challenging project approvals that are deemed exempt, starting from the date the project was approved. NOEs not timely filed extends the legal filing period to 180 days. •A determination that a project is “not a project” under CEQA is not a formal exemption and City Planner’s notice of determination and NOE are not required. NEGATIVE DECLARATIONS/MITIGATED ND For projects that require a negative declaration (ND) or mitigated negative declarations (MND). •The ND or MND must be completed and presented for decision within 180 days from the date when the city finds the application complete. Timelines may be longer depending on the timeliness of submittals and resubmittals (§15109). •Notice of Intent to Adopt must be posted for 20/30 days. Review and consultation period must be at least 20 days. Review period extended when ND/MND sent to state clearinghouse. •Unlike exemptions, the decision-making authority for the discretionary permit/action considers and approves the ND or MND as part of their decision on the discretionary permit and/or action. •The environmental determination, relevant findings, and required mitigation/monitoring shall be incorporated into a separate approving resolution and/or ordinance. •In the staff report, the resolution on the environmental determination shall be listed first, followed by the resolution and/or ordinance approving the project. The decision-maker can approve both actions simultaneously. •The Notice of Determination (NOD) must be filed with the County Clerk within five days following approval of the project. A timely filed NOD establishes a 35-day statute of limitations for challenging project approvals that are deemed exempt, starting from the date the project was approved. NOEs not timely filed extends the legal filing period to 180 days. ENVIRONMENTAL IMPACT REPORT Projects requiring an Environmental Impact Report (EIR). •An EIR must be completed and certified within 365 days of application completeness. Timelines may be longer depending on the timeliness of submittals and resubmittals (CEQA Guidelines 15109) •Prepare/complete the Initial Study, determine EIR required, and release a Notice of Preparation (NOP). The NOP must be issued within 30 days of determination and specify project. •Notice of Completion to be filed with state clearinghouse. •Public review: Notices sent to affected agencies, surrounding property owners, and requesting individuals. April 15, 2025 Item #7 Page 14 of 22 IB-150_Environmental Review July 2022 Page 7 of 7 •Review and consultation period must be at least 30 days, 45 days when submitted to state clearinghouse. •Final EIR. Certification prior to project approval and within one year from complete application •Findings and Statement of Overriding Consideration needed for approvals with remaining unmitigated significant effects. •EIR Notice of Determination to be filed within five days of project approval. •Statute of Limitations to challenge an EIR is 30 days. Notwithstanding, city procedures provide that the time limit to complete and approve, adopt, or certify the environmental document may be extended once for not more than 90 days upon consent of the applicant. PUBLIC ENGAGEMENT As previously noted, CEQA’s basic purpose has been to foster transparency and integrity in public decision- making so that consideration is given to minimizing damage public decisions may have on the environment before the action is approved or carried out. As such, there are opportunities for the public to comment. PUBLIC NOTICING Public involvement starts when an application is filed with the city and residents within 600 feet of the project are notified. Any public comments following that initial notification are used to help determine what environmental impacts will be studied and what type of environmental document will be needed. For NDs, MNDs, and EIRs, there is a formal comment period after the initial environmental document is circulated, where the public is given an opportunity to review and comment on the city’s environmental findings and determinations. PUBLIC HEARINGS There are hearings, sometimes during and always after the public comment period. Public hearing notice requirements are covered by Government Code sections §65090 and §65091. The possible approval, adoption, or certification of the environmental assessment for NDs, MNDs, and EIRs will be announced as part of the public hearing notice provided for the discretionary action(s) required for project approval. The public is invited to be a part of this decision-making process. DECISION-MAKING BODY DELIBERATIONS [CEQA exempt projects excluded] Before making its decision whether to carry out the proposed project, the decision-making body (i.e., Planning Commission or City Council) needs to independently review and consider all relevant documents, reports, studies, or other materials that comprise the full environmental assessment of the project. The decision-makers must also review and consider all written and oral evidence submitted to the city in connection with the environmental assessment and the proposed project itself. the decision-making body should not approve a project as proposed if there are feasible alternatives/mitigation measures available which would substantially lessen the environmental effects or unless specific economic, social, or other conditions make the project alternatives or mitigation measures infeasible, and specific findings of overriding considerations have been made per CEQA. APPROVING PROJECTS WITH IMPACTS Although the State Legislature established policies concerning the maintenance of a quality environment and control of environmental pollution, the city also has obligations to balance public objectives, including economic and social factors, in determining whether and how a project should be approved, conditionally approved, or denied. In that regard, the decision-making body may balance environmental objectives with economic/social objectives in arriving at a final decision by weighing any adverse environmental effects against any positive effects/benefits to the public which could result from the proposed project. YOUR OPTIONS FOR SERVICE Please contact the Planning Division at 442-339-2600 or via email at Planning@carlsbadca.gov for more information about environmental review and processing. April 15, 2025 Item #7 Page 15 of 22 Community Development Department | 1635 Faraday Ave. | Carlsbad, CA 92008 | www.carlsbadca.gov Density Bonus IB-112 This bulletin outlines the development allowances provided under Govt. Code §65915, commonly referred to as state density bonus law. The bulletin is only intended to summarize the key provisions of state law rather than cite them in total. The document has been updated to include recent state legislation, including AB 1287, the “middle-income homes density bonus law,” which became effective January 1, 2024. BACKGROUND State density bonus law allows a developer to increase density (total number of homes) allowed on a property above the maximum set under a city’s local land use plan (Carlsbad General Plan) by as much as 100%. In addition, qualifying applicants can also receive reductions in required development standards such as setbacks and height limits when those standards prevent the applicant from achieving the density allowed under state law. Other tools include reduced or no parking requirements for certain project types. In exchange for these benefits, a certain number of the new dwelling units within the development project must be reserved for lower-income households, seniors, or the other eligible affordable housing projects. Pursuant to Government Code §65915(a)(1), each jurisdiction must adopt an ordinance that specifies how compliance with density bonus law will be implemented. Failure to adopt an ordinance does not relieve the city from complying with state density bonus law. As such, the city’s adopted ordinance, Carlsbad Municipal Code §21.86, references state mandates where appropriate (as opposed to repeating state code requirements) and focuses more on the permit processing requirements for density bonus applications. ELIGIBILITY Any housing development that proposes five or more units and incorporates at least one of the following is eligible for a density bonus. Note: Accessory Dwelling Units (ADUs) may be included as part of a single-family or multi-family development, but ADUs do not count towards/against the total density allowed under state density bonus. Refer to info-bulletin IB-111 for more on ADUs. •At least 5% of the housing units are restricted to very low-income residents. •At least 10% of the housing units are restricted to low-income residents. •At least 10% of the units in a for-sale housing development are restricted for moderate- income. •100% of the housing units (other than manager’s units) are restricted affordable with a maximum of 20% of the units being moderate. •At least 10% of the housing units are rent restricted at the very low-income level for transitional foster youth, disabled veterans, or homeless persons. •At least 20% of the housing units are for low- income college students in housing dedicated for full-time students at accredited colleges. •The project donates at least one acre of land to the city for very low-income units, and the land Exhibit 3 April 15, 2025 Item #7 Page 16 of 22 Page 2 of 7 IB-112_State Density Bonus Law_Updated: March 2024 has the appropriate permits and approvals and access to needed public facilities. •The project is a senior citizen housing development; in which case, no affordable units are required. •The project is a mobile home park that is age- restricted to senior citizens; in which case, no affordable units are required. AFFORDABILITY DURATION State density bonus law establishes how long an affordable unit must stay affordable. •Affordable rental units must be restricted at the targeted income level group for at least 55 years. •Affordable for-sale units must be restricted at the targeted income level group for at least 30 years, which starts after the initial sale of the affordable unit. Affordable units may be sold at a market price to other than targeted households provided that the sale results in an equity sharing agreement with the city. DENSITY BONUS CALCULATIONS Despite the city’s rounding requirements under CMC §21.53.230 (Table A), for projects utilizing density bonus, Government Code §65915(q) requires that each component of any density calculation resulting in fractional units shall be separately rounded up to the next whole number. In other words, all density related calculations must be rounded up. Base Density Calculation Step one in calculating density bonus is to calculate the project’s base density, which represents the number of dwelling units allowed under the city’s General Plan, per acre of property. Calculating base density under density bonus is no different from how the city calculates density for standard residential development projects, with the following exceptions: •While the city uses developable (or net) acreage in determining density, density bonus law requires cities to use gross acreage. This allowance was clarified in an HCD technical assistance letter dated July 26, 2023. •While the city utilizes a “mid-range” density calculation for determining the allowable number of units on a property, state law requires that density bonus be calculated based upon the maximum density allowed under the city’sGeneral Plan and zoning ordinance for the subject property. •Pursuant to SB-330 (Housing Crisis Act of 2019), the city is prohibited from enforcing housing caps. As such, the housing caps in the city’s Growth Management Plan (GMP) cannot be applied to new housing development projects. Refer to IB-132 for more information on SB-330 and Reso No. 2021-074 for the city’s suspension of the GMP cap limits and performance standard moratorium provisions. Density Bonus Calculation Step two in calculating density bonus is to calculate the project’s density increase, which represents the number of units allowed in addition to the base density units. These additional dwelling units are set per a sliding scale, based upon two primary factors: •The percentage of units in the project that will be set aside (reserved) as affordable; and, •The household income category of those affordable units (i.e., very low, low, or moderate income). For convenience, a Density Bonus Table is included on page six of the city’s Density Bonus Report (Form P-1(H)). As you will see from the table, the number of affordable units (far left column) and the level of affordability (top row) greatly influence the number of density bonus units that can be granted. For example, a project that reserves 10% of its units as affordable for very low-income families is eligible for a 32.5% density bonus, as opposed to a density bonus of only 20% if those same affordable units were reserved for low-income families. Refer to info-bulletin IB-137 (Carlsbad’s Housing Plan) for more information on household income and affordability. April 15, 2025 Item #7 Page 17 of 22 IB-112_State Density Bonus Law_Updated: March 2024 Page 3 of 7 INCLUSIONARY HOUSING CALCULATIONS To help provide local affordable housing, the city in 1993 adopted an inclusionary housing ordinance (§21.85), which established the legal basis for requiring affordable (inclusionary) housing units in new residential development in the city. For more information, refer to info-bulletin IB-157 (Inclusionary Housing Program). While the city’s inclusionary regulations are separate from density bonus law, there are a few important provisions in the city’s inclusionary ordinance that directly affect density bonus projects, as reflected below. •The city’s inclusionary requirements apply to all proposed development projects that include residential units. This means that projects subject to the state density bonus law/city’s density bonus ordinance (§21.86), must also comply with the city’s inclusionary housingordinance (§21.85). •Projects proposing seven or more housing units are required to restrict at least 15% of the total proposed units for low-income households. The total proposed units include base density and density bonus units. •When calculating inclusionary requirements, fractional units resulting in less than 0.5 are rounded down to the next whole number. •The required affordable inclusionary units satisfy the required affordable density bonus units. The city’s application of its inclusionary code is consistent with AB 2345 and the Department of Housing & Community Development’s (HCD) technical assistance letter dated September 2, 2022 to the City of West Hollywood. THEORETICAL EXAMPLE Sometimes showing the math helps folks better understand how density bonus works. The following is a theoretical example on how these different density calculations are applied. SECONDARY DENSITY BONUS AB 1287 (Alvarez, 2023) amended state density bonus law by requiring jurisdictions to award an additional (or second) density bonus for projects that have allocated a certain amount of affordable housing for very-low income, low-income, or moderate-income units, as summarized in the section below. Minimum Eligibility The proposed density bonus project must comply with one of the following affordability requirements to be eligible for an additional density bonus. •A minimum of 15% of the base units are reserved for very low-income households; or •A minimum of 24% of the base units are reserved for low-income households; or •A minimum of 44% of the base units are reserved for moderate-income households. A property 1.003 net acres in size has a zoning designation of R-15 (11.5 to 15 dwelling units per acre). Under density bonus, this results in a maximum base density of 15.05 units for this site (1.003 acres multiplied by 15 units per acre), which rounds up to 16 units. The applicant proposes that 3 of the 16 units will be reserved for low-income households. This results in 18.7% of the units that will be reserved as affordable housing (3 affordable units divided by 16 base density units), which rounds up to 19%. Based on the sliding scale found in the Density Bonus Table in the Density Bonus Report (Form P-1(H)), with 19% of the affordable units reserved for low-income families, the project’s base density can increase by 33.5% or 5.36 units (16 base density units multiplied by 33.5%), which rounds up to 6 density bonus units for a total of 22 units for this project. To satisfy the city’s inclusionary ordinance, a total of 3.3 affordable low-income units are required for this project (15% inclusionary requirement multiplied by 22 total units), which rounds down to 3 units. In this example, the 3 affordable low-income units satisfy the requirements under state density bonus law as well as the city’s inclusionary housing ordinance. April 15, 2025 Item #7 Page 18 of 22 Page 4 of 7 IB-112_State Density Bonus Law_Updated: March 2024 Density Increase Under state law, the city must grant the developer an additional density bonus if additional units are set aside for either very low or moderate-income households. Like traditional density bonus calculations, the secondary density bonus is also on a sliding scale, based on the project’s base density. For reference, the secondary density bonus allowances have been included in the Density Bonus Table found on page six of the city’s Density Bonus Report (Form P- 1(H)). To help illustrate how this secondary density bonus is applied, let us relook at the previous theoretical example. It is important to highlight that AB 1287 caps the affordable set aside at 50%. For projects that allocate the maximum of moderate-income units (44%), they would only be eligible to set aside another 6% of very- low income or moderate-income units to receive an additional bonus of 23.75% or 22.5%, respectively. REMOVAL OF EXISTING RENTAL UNITS Under density bonus law, projects that include the demolition or removal of affordable rental units are ineligible for density bonus unless the units are replaced concurrent with the development of the project. This provision applies to the following types of rental units: • Units subject to recorded restrictions • Units subject to rent control • Units occupied by very low- or low-income households If household rental income cannot be determined, the city may assume households are occupied by low- income households in the same proportion as low- income renters in the city, consistent with AB 2556. Additionally, under state law the affordable units required under density bonus may also be used to satisfy any replacement unit requirements. This allowance was clarified in an HCD technical assistance letter dated December 14, 2023. DEVELOPMENT STANDARD DEVIATIONS Traditional development projects must be designed to comply with city established development standards and design regulations such as building height limitations, setback requirements, minimum parking ratios, and on-site open space directives. However, under state density bonus law, applicants can deviate from these development standards when found that the standards prevent the applicant from achieving the density allowed under the state law. There are two types of tools available to applicants: • Incentives & Concessions • Waivers Instead of 3 units, the applicant now proposes that 5 of the 16 units will be reserved for low- income households. This results in 31.2% of the units that will be reserved as affordable housing, which rounds up to 32%. With 32% of the affordable units reserved for low-income households, the project’s base density can increase by 50% or 8.0 units (16 base density units multiplied by 50%), for a total of 24 units. Since more than 24% of the base units are being reserved for low-income households (31.2%, specifically), this project is eligible for a second density bonus. In this example, the applicant proposes to reserve an additional 15% of the base units for moderate-income households, which results in 2.4 units (16 base density units multiplied by 15%) that rounds up to 3 units. With 15% of the affordable units reserved for moderate-income households, the project’s base density can increase by an additional 50% or 8.0 units (16 base density units multiplied by 50%). As a result, the total project size increases to 32 total units, 8 of which will be restricted affordable. April 15, 2025 Item #7 Page 19 of 22 IB-112_State Density Bonus Law_Updated: March 2024 Page 5 of 7 Incentives & Concessions Incentives and concessions, as defined under state density bonus law, allow a developer to deviate from those requirements when modifying such regulations would provide “identifiable and actual cost reductions” to provide for affordable housing costs and rents. This requirement was clarified in the court decision of Schreiber v. City of Los Angeles (later codified as part of the passage of AB 1287) and the sections below reflect the holdings in that case. Application A few key considerations regarding the application of incentives or concessions: • Under the government code, the terms “incentives” and “concessions” are used interchangeably. As such, the city considers them one in the same (“incentives/concessions”). • A density bonus project is entitled to incentives/concessions even without a request for a density bonus --- if a developer provides the affordable housing specified under density bonus law, they are eligible for incentives/concessions. • The city applies incentives/concessions to the development standards or design regulations requiring deviation, not to the individual situation. For example, say a project proposes three separate buildings with each building requiring an increase in the city’s maximum building height standard. In this example, the city would require one incentive/concession for this deviation, even though the deviation applies to three separate buildings. If that same project requires a deviation from the building height and rear yard setback standards, the city will require two incentives/concessions since these are considered two different development standards. • Pursuant to the Schreiber case, which was later codified as part of the passage of AB 1287, a developer is not required to provide financial evidence (i.e., pro forma) documenting that a requested incentive/concession will result in actual cost reductions. However, applicants need to reasonably document “why” the requested incentive/concession will reduce affordable housing development costs. As such, the city requires applicants to provide reasonable documentation to show that a requested incentive/concession will result in identifiable cost reductions to provide for affordable housing costs or rents. Number Authorized The number of incentives/concessions that can be requested by a developer varies by the amount and type of affordable units being proposed, as reflected below. INCOME % OF AFFORDABLE UNITS1 Very Low 5% 10% 15% 16% ≥80% Low 10% 17% 24% --- ≥80% Moderate 10% 20% 30% 45% 20% Student2 20% --- --- --- --- Incentives 1 2 3 4 53 1 The % of a project’s affordable units must be at least equal to the listed %. 2 Lower-income student in a dedicated student housing development. 3 To qualify for 5 incentives, a project must reserve at least 80% of the units for lower income households (very low, low, or combination thereof). The remaining 20% may be reserved for moderate income households. The applicant shall also receive a height increase of up to three additional stories, or 33 feet. As noted in footnote #1, when determining the appropriate number of incentives/concessions, a project’s percentage of affordable units must be “at least” equal to the percentages shown in the table above (§65915(d)(2)). In other words, the percentages in the table are minimums. So, in the case of the theoretical example project that reserved 19% of the units for low-income, the applicant is eligible to receive two incentives/concessions. If affordable units are provided to satisfy the city’s inclusionary housing obligation above required density bonus affordable units, the total number of affordable units count April 15, 2025 Item #7 Page 20 of 22 Page 6 of 7 IB-112_State Density Bonus Law_Updated: March 2024 when determining the number of incentives/concessions allowed. Grounds for Denial Under the Schreiber case, the city must grant a requested incentive/concession unless it finds, under a preponderance of evidence, the following: • The incentive/concession does not result in identifiable and actual cost reductions to provide for affordable housing costs or rents. • Granting the incentive/concession would have a specific adverse impact on public health or safety or on property listed on the California historical register, which cannot be mitigated, or would be contrary to state or federal law. Waivers Density bonus law offers another form of assistance to developers, separate from concessions/waivers, in the form of “waivers.” A waiver is a modification or reduction to established development standards or design regulations when those requirements potentially cause the construction of the development project physically infeasible, if not approved. Application A few key considerations regarding waivers. • Waivers do not count as an incentive/concession and can be used in concert (combined) with incentives/concessions. • The developer must provide sufficient documentation justifying why the city’s established development standard(s) or design regulation(s) physically preclude construction of the project and why the waiver(s) is necessary. Sufficient documentation may include a written explanation of the physical constraints accompanied with an exhibit showing the site and developable envelope. Number Authorized Unlike concessions/incentives, applicants are entitled to waive any established development standards or design regulations that would physically preclude the development from achieving the allowances authorized under density bonus law. In other words, there is no limit in the number of waivers an applicant can request. Grounds for Denial The city is not required to grant or otherwise authorize a waiver if it finds that the requested deviation or modification causes a specific adverse impact on public health or safety and cannot be mitigated, would have an adverse impact on property listed on the California historical register, or would otherwise violate state or federal law. Like incentives/concessions, the city must include a showing of substantial evidence when making a finding of denial on a waiver request. PARKING ALLOWANCES Despite the city’s parking requirements under CMC §21.44, the city may not require more than the following parking ratios for a density bonus project (including parking for persons with disabilities): Unit Type Required Parking Studio 1 space One Bedroom 1 space Two Bedroom 1.5 spaces Three Bedroom 1.5 spaces Four Bedroom 2.5 spaces April 15, 2025 Item #7 Page 21 of 22 IB-112_State Density Bonus Law_Updated: March 2024 Page 7 of 7 State law further limits parking requirements for specified projects as reflected below. • 0.5 spaces per unit for projects with at least 11% very low income, 20% lower income, or 40% moderate income, when located within ½ mile of accessible major transit stop, which in the city is the Carlsbad Village Coaster Station or Poinsettia Coaster Station. • No parking spaces are required for projects meeting the following: o 100% affordable to lower income residents, within ½ mile of a major transit stop, which in the city is the Carlsbad Village Coaster Station or Poinsettia Coaster Station. o 100% senior or special needs rental project affordable to lower income, either with paratransit service or within ½ mile of an accessible bus route that operates at least eight times per day. o Rental supportive housing development that is 100% affordable to lower income households. Parking requirements may be satisfied by providing individual parking stalls or in tandem, so long as the stalls are provided onsite. Requesting these parking standards does not count as an incentive/concession or waiver; however, an applicant may request further parking standard reductions using the incentive/concession or waiver allowances. DENSITY BONUS APPLICATIONS The city’s Density Bonus Ordinance can be found in CMC §21.86 and applicants should follow the permit submittal requirements and processes set forth in the Land Use Review Application (Form P-1). Pursuant to changes in state density bonus law that went into effective in 2019, the city developed a supplemental form outlining the information that must be submitted for a complete density bonus application; referred to as the Density Bonus Report Form P-1(H). This includes project location, property description, project description, density calculations, and information on any requested incentives/concessions or waivers. Once a development application is determined to be complete, the city, under state law, will notify the applicant of the level of density bonus and parking ratio the development is eligible to receive. PROJECTS IN THE COASTAL ZONE When a density bonus project is proposed in the coastal zone, legislation that went into effect in 2019 attempted to strike a balance between the state goals of promoting housing and protecting the coast. Density bonuses, incentives/concessions, waivers, and parking reductions are to be permitted so that they are consistent with both density bonus law and the California Coastal Act. Granting of a density bonus or an incentive does not require a general plan, zoning, or local coastal plan amendment. YOUR OPTIONS FOR SERVICE To schedule an appointment to submit an application or to learn more about density bonus, please contact the Planning Division at 442-339-2600 or via email at Planning@carlsbadca.gov. NOTE: State density bonus law is regularly updated and revised by the state legislature and the city may not be able to timely update this bulletin to reflect the most current provisions. Please refer to current state law (§65915 et seq.). April 15, 2025 Item #7 Page 22 of 22