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HomeMy WebLinkAbout1998-06-16; City Council; 14722; HOUSING ELEMENT SELF-CERTIFICATIONHOUSING ELEMENT SELF-CERTIFICATION RECOMMENDED ACTION: By minute motion a) Direct the City Council’s representative to the SANDAG Boarc approval of the Housing Element Self Certification Report, including the Princip Guidelines contained within it, and b) Direct City staff to work towards the City’s qua for housing element self-certification during the current and upcoming housing ITEM EXPLANATION: State law stipulates that a new or amended general plan housing element must be rt and certified by the California Department of Housing and Community Developmen as to vvhether the element conforms to the extensive requirements of state la certification is important in the event that the element is legally challenged a’ adequacy. If HCD certifies a housing element there is a rebuttable presumption courts that the element is legally adequate. This means that the burden of proof VI with the challenger to prove the inadequacy. On the other hand, if HCD does not cc element, the rebuttable presumption is that the element is not legally adequate. The of proof would then lie with the City to prove it is adequate. Therefore, a failure tc certification from HCD makes an element much more vulnerable to successfi challenge. Case law has established that if the Housing Element (or any elemc general plan) is found to be legally inadequate, then the entire general plan is inadequate, with the possible result that no development could occur within the juri until the deficiencies are remedied. Consequently, the successful certificaltior updated or amended housing element is critically important to a jurisdiction’s la planning, and development activities. By state law, all San Diego jurisdictions are required to comprehensively upda housing elements by June 1999. certification from HCD can be a confrontational, time-consuming, and onerous pr This was Carlsbad’s experience during 1991 and 1992 with the adoption and certific our current housing element. Other jurisdictions in San Diego county have yet tc state certification for their last updates. PAGE 2 oF AGENDRiLL No. I~~V p 0 state, if it chooses to do so. In addition, a jurisdiction must go to the state if it is u make the required findings. The pilot program addresses two dive-year housing qc% current cycle ends in June 1999 and the next cycle would end in June 2004. requires somewhat differing findings for the two cycles. The bill also created a San Diego Housing Element Advisory Committee whose cha develop methodologies, guidelines, and principles to refine how the required finding! made. Council Member Julie Nygaard is the chair of the Advisory Committee. ME SANDAG, its membership consists of elected officials from other juris representatives of the banking and building industries, housing advocates, and SI state HCD. In the months since the bill became effective the Advisory Commil worked hard to build consensus for the required methodologies, guidelines, and pri A draft document containing the requirements was recently produced and reviewe the interested parties, including City staff. The final document is targeted to be before the SANDAG Board for approval at the Board's June, 1998 meeting. Copic draft document are available in the Planning Department While tlhere has been considerable give-and-take in the formulation of the methoc guidelines, and principles, staff believes the final product is sound. However, quah self-certification will not be easy during either the current or next cycle. For example the required findings for this cycle is that the City has met performance ot (established by the methodologies) for producing housing for low and very low families. Carlsbad has not yet met this performance objective and we have little mc a year left in this cycle in which to do so. Nevertheless, staff recommends that Council 1) direct its representative to the SANDAG Board to vote approval of the fi certification report and guidelines and 2) direct City staff to pursue qualifying the Cit! certification at the ends of both this and the next cycle. Additional information about housing element update cycles, the provisions of AB 1 findings, and a discussion of the pros and cons of participating in self-certifica contained in Exhibit 1. FISCAL IMPACT: None with this action. EXHIBITS 1. Memorandum to the City Manager, dated May 5, 1998 0 0 E. MAY 5,1998 TO: FROM: Principal Planner CITY MANAGER AND CITY COUNCIL HOUSINGr ELEMENT SELF-CERTIFICATION This memorandum is to provide additional information regarding the housing element sel certification process resulting from AB. 1715. The City Council is being asked 1) to direct ii representative to the SANDAG Board to vote approval of the Housing Element Self Certificatio Report, including the Principles and Guidelines contained within it, and 2) to direct City staff t work towards the City’s qualification for housing element self-certification during the currei and upcoming housing element cycles. This memorandum provides additional information on the following topics: 1. 2. 3. 1. The state requires all cities and counties to prepare a comprehensive revision of the housin elements of their general plans every five years. Approximately one-fifth of the state’s 500 . jurisdictions begin this cycle each year. The member jurisdictions of the San Diego Associatio of Governments began the current cycle (referred to as “Cycle 2”) on July 1, 199 1. Cycle 2 wa originally supposed to end five years later on July 30, 1996, however the state legislatur extended the cycle and it is now scheduled to end on June 30, 1999. The next cycle (“Cycle 3” will run from July 1, 1999 until June 30,2004. This will be followed by Cycle 4. Please refer tl Figure 1 : “Housing Element Cycles”. Prior to the beginning of each cycle local jurisdictions are supposed to 1) adopt new housiq elements and 2) submit the revised element to the state Department of Housing and Communit, Development for certification as to its substantial compliance with state housing law. Thu: Carlsbad is to revise it’s current element (adopted in 1991) and have the state review the updat prior to July 1, 1999 and the beginning of Cycle 3. However, in lieu of having the state revie\ the revision, A.B. 1715 now gives each San Diego jurisdiction the opportunity to self-certif compliance with the law, provided the it can make four findings required by the bill. Thes findings are discussed in more detail in the next section. Similarly, at the end of Cycle 2 Carlsbad again will be required to update its housing element prior to July 1, 2004 and th beginning of Cycle 4. Housing element update cycles, as established by state law An outline of the major provisnons of A.B. 1715, the self-certification bill. A discussion of the pros and cons of self-certification Discussion of the Housing Element Cycles as Established by State Law B CD =t cL e.oq=t--'a,m -4% zzzw 7wggs.g 22% 09% e" -o wv4 3 s we E@ g L w "r g g g g E g o= -$?e. m g.q g r: $3 5 "pJ go 2- 5 9g 5 Zne.2 ?E rr s.g pg'5z E.$ q.=v,(D(De" gmm 28% z osg a 5' 89,. 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Es rt- g 3 3 bL I' , I 7/00 0 g $%$% &p 2.F v) s>F%$ r! I-! rt- 8 5 B, S i 7/01 .YJ 5 m k - z 3 %? B czo~g.(D(D 85s $ ;ai 7/02-- 7/03 a 8 *g %x rn "a 18 ?. 1-1 t 7/04 I &?-a '4 I 'P 7/05 -- - - Fair SharelRegional Share Established I= H.E. Revision No.2 -- -- -- -- -- H.E. Revision No. 3 (original date) . -- II H.E. Revision No. 3 (revised date) --~ -- -- I H.E. Revision No. 4 HOUSING ELEMENT S EtF -CERTIFICATION 0 MAY 5,1998 Page 2 2. The housing element self-certification criteria (findings to be made) set forth in A.B.171 (Section 65585.1 of the Government Code) for the next cycle are: Criterion 1 : A. B. 1715 Provisions for Self-Certification The jurisdiction’s adopted housing element or amendment substantially complit with the provisions of state housing element law. This criterion means that before June 30, 1999 and June 30, 2004 jurisdictior choosing self-certification must prepare updated housing elements with the sm content and analysis as is required of those who seek certification by the state. Criterion 2: For the third housing element revision (Cycle 3), the jurisdiction met it fair sharl of the regional housing needs for the second housing element cycle as determine, by SANDAG. This criterion means that in order to self-certify the element prepared for 1999, ~ jurisdiction must have met the performance objective for providing housin; opportunities for low and very-low income housing established in 1990 ii SANDAG’s Regional Housing Needs Statement. This performance must have beel achieved between July 1, 1991 and June 30, 1999. The fair share objective may bi met by a variety of housing programs, including new construction, acquisition rehabilitation, rental or ownership assistance, and preservation of existing stock. Criterion 3: The jurisdiction must provide a statement regarding how its adopted housin; element addresses the dispersion of lower-income housing within the jurisdictio fi documenting that additional affordable housing opportunities will not be develope, only in areas where concentrations of lower-income households already exisi taking into consideration necessary public facilities and infrastructure. ‘The updated elements €or 1999 and 2004 would contain this information. Criterion 4: No local government actions or policies prevent the development of the site: identijied in the element for lower-income housing or accommodation of tht jurisdiction’s share of the total regional housing need. This criterion emphasizes requirements of state housing element law to avoic government actions which impede the construction of housing. The criteria for self certification for the fourth housing element update prior to 2004 are the samt criteria as above, with one exception. The performance objectives set out in criterion 2 art modified for 2004. Instead of simply using SANDAG’s 1990 Regional Housing Need: HOUSING ELEMENT S m. -CERTIFICATION 0 MAY 5,1998 Page 3 Statement, the performance objective for each city is developed from a methodology which take into consideration the available financial resources and availability of regulatory measures. Th methodology was developed by the SANDAG Housing Element Advisory Committee over th last year, as set out in the group’s document “Housing Element Self-certification Report”. Thi document will be taken before the SANDAG Board for approval (tentatively set for the Board’ June 1998 meeting). This document also provides principles and guidelines for evaluating wk local housing programs would receive credit towards the housing performance objectives. On other change required by A.B. 1715 is that the performance objectives must also address th housing needs of a new income group, the “extremely low” income household, defined a households earning no more than 30% of the county median income. This would be in additio to the low and very-low income groups already identified under the 1990 “fair share” objectives. 3. This section is structured as a two sets of arguments, reasons for participating in self-certificatio and reasons not to participate. Within each set are individual points and each point is provide with a rebuttal statement. At the end of the section are several points worth considering whic are neither “pro” nor “con”. Reasons For Participating 1. Avoid State HCD Certification: The original purpose for creating A.B. 17 15 was to provid a means by which jurisdictions could adopt new Housing Elements without going throug the lengthy, frustrating, and often expensive process of seeking state HCD certification, a called for under the law. After Carlsbad’s current element was drafted, it took over a year a additional effort negotiating with HCD staff before we obtained certification. The effoi involved hundreds of additional staff hours, trips to Sacramento, and costs for consultar services. Under A.B.1715, when a jurisdiction satisfies four criteria, it may self-certify it element. Self certification may yield staff and dollar cost savings. Rebuttal: Self certijication would involve its own costs in terms of added complexities tl programs, deeper subsidies for programs, and administrative burdens. It is unclear ifstate o self-certlJication would cost the City more. 2. Greater Flexibility in Programs to Meet Objectives: Currently regional share needs must b met only through new construction. Under self-certification, a much broader range a programs can be used to meet numerical objectives. In addition to new constmctior eighteen types of programs are identified which can be counted. Some of these are program in which the City is already engaged, but cannot currently receive regional share “credit’ Some of these programs could yield more units for the same dollar costs as new constructior thus stretching available funds. Last, the self-certification program provides for a “slidin scale” of extra and partial credits that vary by type of program, length of tenure, and numbe Pros and Cons of Participating in Self-certification !R a HOUSING ELEMENT S -CERTIFICATION MAY 5,1998 Page 4 of bedrooms in units. Based upon the way we have carried out many of our programs w would qualify for more extra credits than many jurisdictions. Rebuttal: Greater flexibility is attended by fairly complex rules and guidelines about hol these programs must be operated in order to qua@. Some of Carlsbad current program might have to be modiJied somewhat to qualifi. For example, the current way we use secon dwelling units in inclusionary housing would not qualifi under the guidelines. Th complexity would mean more d$ficulty in administrative burden (record keeping, reportinj etc). While we would qualifi for the extra credits for some program, other programs w currently have, or might want to have in the future, might qua@ only for partial credits. 1 order to optimize credits, a careful examination of housing programs would be needed. Th desire to accrue credits for self-certification could weight disproportionately against othe important factors in deciding what housing programs and priorities to pursue, 3. Smaller Numerical Obiectives Under Self Certification: Regional Share Housing Needs fc our current element call for 1,066 units of low-income housing and 1,443 units of very-lorn income housing (2,509 units of “lower” income), all of which must be met by ne\ construction. Under self-certification numerical performance objectives would be smallei For the housing cycle ending in 1999, the performance objective is the “fair share” numbe identified in I990 by SANDAG, which is 1, 125 “housing opportunities” sf “lower income housing. The finall 2004 Objective cannot b determined yet due to the way the formulas work. However, the preliminary number is 66 units. A variety of programs can be counted. The 2004 objective is determined, in part, b the progress we made from 1991 - 1996, (the final counts of which are still pending) and, i part, by the total housing stock we will have in 2004). For 2004 the objective is furthe broken out by three income groups. Rebuttal: Although the objectives for 2004 appear quite small in comparison, the overai objective must be broken into components for low-income (41 %), very low-income (32% and extremely low-income (27%). The extremely low group is new, defined as incomes beloi 30% of county median income. Subsidies necessary for the very low and extremely-lo1 income groups will be great and make attaining the performance objective more d@cui than housing for low income only. Though smaller numerically, these objectives will not b easy to meet. 4. Commonality with Proposed Amendments to Inclusionary Ordinance: A number of th changes staff is considering for our inclusionary housing ordinance are in keeping with th things that are part of the self-certification program. For example: extending the definition for targeted income groups to include deeper subsidies; incorporating some form of slidin scale or extra credit “offsets” for certain types of programs/projects; and allowing credits fa solutions other than new construction in certain circumstances. A variety of programs can be counted. HOUSING ELEMENT S @L -CERTIFICATION 0 MAY 5,1998 Page 5 Rebuttal: We should not let self-certification dictate where we want to go in these area, Staff discussions to date have not taken things as far as is called for by self certification.. Reasons for Not Participating 1. The Tail Shouldn’t Wag the Dog: In trying to qualify for self certification we could end u moving from programs that are optimized for Carlsbad needs, policies, and sensibilities, i favor of“ things that may not be best for Carlsbad. We should establish our program independently of the influence of self-certification. Rebuttal: The great array of programs provided under self-certification includes most of th things jurisdictions are doing throughout the region. Carlsbad can pick and choose POT among these programs to create a custom housing program. Much of what we currently d already would qual& for credit. Where minor changes might be necessary to meet the selj certipcation guidelines, it is because the consensus of the housing experts in the region fed that such changes would make for more effective programs. We are already considerin< making changes to inclusionary housing regulations, so why not make them as compatible a possible with self-certification? 2. Deeper Subsidies and a New Target Group: The performance objectives for 2004 call fo breaking out the over-all objective into “proportionality” with three income groups: low, ver low, and extremely low-income households. The definitions of affordability for low and ver low are changed under self-certification to require deeper subsidies. In addition there is new requirement for “extremely low” income, with an affordability level of 30% of 30% o median income. These changes will take a significant toll on resources and will result in fa fewer units being produced. In particular, the extremely low-income objective may simpl, be impossible to meet as there are virtually no federal programs targeted at this level. Rebuttal: The 2004 performance objectives were developed out of a consideration for th resources that our best guess says are likely to be available through 2004, plus ( consideration of what jurisdictions have actually been able to produce this cycle (1991 1996), adjusted for the additional costs that result from the changed definitions. Yes, th definitions will result in deeper subsidies being needed. The numerical objectives are mucI smaller than the real, known need and represent: a) an attempt to provide some degree c service to a group that is not always currently served, and b) a rational and realisti appraisal of what a committed agency may feasibly achieve. Nobody said it would be easy. 3. Increased Administrative Burden: There are a host of rules and guidelines that would pertai to the programs allowed under self-certification. There would also be increased and mor detailed reporting requirements. These things may mean an increased administrative burder costly in terms of staff time and budget. HOUSING ELEMENT SE, CE. -CERTIFICATION 0 MAY 5,1998 Page 6 Rebuttal: There may be some additional “set-up ” efforts needed for accounting systems an some additional time for creating reports under inclusionary. However, an accounting 6 housing programs is already a part of most funding programs, as well as housing elemer law. Once the accounting systems are set up there should be no significant addition6 burden to an agency that keeps good records as it rolls along. Even if there are som additional efforts required, the benefit of not having to certifi through HCD outweigh th cost. 4. It Would Force Modifications to our Existing Programs: The Guidelines and Principles use by the self-certification program would necessitate changes to some of the City’s existin programs. One example is the use of “second units” as an inclusionary program. In order t be credited for self-certification, second units would have to be treated as if they were public lhousing program, thus imposing certain conditions that would make the prograr much less attractive to builders to offer. Conditions might include having to verify tenar incomes. There may be other examples. Bringing programs into compliance with th Guidelines and Principles may create difficulties for some projects that are in the pipeline an may create work demands on staff to effect the changes. Rebuttal: Yes, some changes may be necessary. However, the Housing Commission an others have already expressed concerns about the way second units are used in inclusionar housing. Responses to these concerns would be in keeping with the self-certlJication rule2 and may need to come about with or without self-certification. In general, the efforts neede to bring programs into conformance with self-certijkation are worth the benefits selj certification brings to the City. Observations and Issues Neither Pro Nor Con 1. Active pursuit of self-certification is necessary to make it work. Attaining the performanc objectives of self-certification will not be easy. It will likely require a concerted effort t target resources and focus programs to attain the credits needed. Progress through Apr 1998 has attained less than 60% of the objective for this current cycle. Attaining th objectives for the next cycle will be equally challenging. It won’t just happen. 2. The “extremely-low-income” obiectives will be especially tough for next cycle. Th perforrriance objective for extremely low income doesn’t pertain to the current cyclt However, Federal and State funding programs targeted to these groups are virtually non existent. In order for the City to make this objective by 2004, it will have to get creative wit its own resources, which may have implications for how City resources are used for othe objectives. This is an area of significant need, however, i4 fact taken into consideration by th SANDAG Housing Advisory Committee when it decided to focus on this new group. HOUSING ELEMENT S klE -CERTIFICATION 0 MAY 5,1998 Page 7 3. Amendments to our inclusionary ordinance should complement self-certification, if sell certification is a priority. We are considering amendments to our inclusionary ordinance. I we are not interested in self-certification we can ignore it. If we are interested in it, howevei it would be a mistake to amend inclusionary in such a way that we have to keep separat books on what “counts” under the two programs. That would be an administrative burden. 4. We must “encumber” redevelopment set-aside funds by 1999 or accrue penalties for non-use A factor in the formula for the final performance objective for 2004 is the “Unencumbere( Redevellopment Funds” factor. Units are added to the over-all performance objectives i certain levels of funds are not encumbered by the end of FY 1999. This has not been th problem for us that it has been for some other jurisdictions. We should assure it doesn’ become one in the future by not carrying over large sums of unencumbered set-aside funds. Conclusion All things considered, staff recommends that the City pursue trying to qualify for self certification. Due to the short amount of time left this housing element cycle, it may be that w will not qualifl- this time. Next cycle we may be more successful. In either case, there is nothin; to lose. Should we fail to self-certify we will end up going to the state. This is the same optioi we would have if we choose not to try for self-certification. If you have any questions please let me know. --=h-d&-+q--z&&b DENNIS A. TURNER L