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HomeMy WebLinkAbout2012-03-20; City Council; MinutesMINUTES SPECIAL MEETING: CITY COUNCIL WORKSHOP DATE: March 20, 2012 TIME: 11:00 AM PLACE: CITY ADMINISTRATION BUILDING, ROOM 173B, 1635 FARADAY The Mayor called the meeting to order on March 20, 2012 at 11:00 a.m. Present: Hail, Kulchin, Packard, Blackburn and Douglas. REGIONAL REPORTS Blackburn: Council Member Blackburn attended a meeting ofthe Buena Vista Lagoon JPC. He noted that many agencies attended the meeting and discussed several key issues regarding the Environmental Impact Report and future mitigation efforts ofthe Lagoon. He noted that a full title search regarding the Lagoon will be done by SANDAG. City Attorney Ron Ball stated that all agencies agreed to share documents regarding the Lagoon. Kulchin: No Report. Hall: No Report. Packard: In response to Council Member Packard, City Attorney Ball stated that the City will determine a position on Buena Vista Lagoon once all data is presented. Douglas: No Report. Housing Issues: Current Conditions, Emerging Trends, Existing Laws, Policies, Future Needs, Inclusionary Housing Ordmance, and Council Policy #43. The following documents were distributed for this item and are on file in the Office of the City Clerk. • Articles and Memoranda from City Attorney Ball to Mayor and City Council, "Housing Issues Agenda Item on March 20, 2012 Workshop" dated March 14, 2012. • Memorandum from Community and Economic Development Director to Lisa Hildabrand, City Manager, and "Housing Issues" dated February 2, 2012. • Presentation on Housing Issues, Scott Donnell, March 20, 2012. Staff Members Presenting: Sr. Planner Scott Donnell, Director of Community and Economic Development Gary Barberio, and Housing and Neighborhood Services Director Debbie Fountain. Special Meeting Workshop, March 20, 2012 Director Barberio noted that the presentation to Council was to receive input for the General Plan Update. Mr. Donnell spoke about the housing trends by demographics. He explained that "Baby Boomers" and those with "empty nests" were looking for smaller square footage in their residences. He also noted that "Millinials", those in their 20's and 30's, were not looking for single family homes. Discussion ensued regarding multi-family homes. The Mayor noted that the 10-15 year time-frame is valid for determining housing types. Mr. Donnell stated that developers have been requesting higher density projects. At 11:57 a.m. the Mayor called a recess. The Mayor and Council Members Packard, Kulchin, Douglas and Blackburn returned at 12:10 p.m. Public Comment: Mario Monroy discussed the housing numbers assigned to each quadrant. Lloyd Hubbs spoke about the need for single family homes. Diane Nygaard spoke about the sizes and numbers of houses and their impact on available land. Margie Monroy noted that the Council needs to note changes and act on them. Cont. of Housing Discussion: Mr. Donnell discussed the housing policy framework: the location of housing, the density of housing and the availability of housing to all economic segments. Council Member Douglas left the meeting at 12:40 pm. Council concurred that the Housing Policy #43 and feasibility study should return to a Regular Council Meeting for consideration. Council Priorities Ms. Hildabrand passed out the Council Priority Project Worksheet and explained its format. This worksheet, dated March 20, 2012, is on file in the Office ofthe City Clerk. Council asked for updates on the following project: Page 2 Special Meeting Workshop, March 20, 2012 Agua Hedionda Dredging Director of Utilities Glenn Pruim gave an update on this project and the project's timeline. Mayor Hall adjourned the meeting at 1:35 p.m. trraind M. Wood, CMC City Clerk Page 3 ) ^ Agenda Item # l^W^^K^ CITY OF CHRONFILE For the members ofthe: ^CARLSBAD /^ilX^SHN^i-, ACM cr^M r^CAT^C ^ MEMORANDUM Date^CityManagerJ^ March 15, 2012 To: CITY MANAGER From: COMMUNITY & ECONOMIC DEVELOPMENT DIRECTO Re: HOUSING ISSUES In Carisbad, the single-family home is king, constituting more than two-thirds of all existing housing. Since the majority of residentiai construction has already occurred and is relatively new, the city will remain a predominantly single-family home community for the foreseeable future. Though the building ofthe characteristic detached single-family home continues, the hot rental market as well as changing demographics, emerging preferences and state housing law suggest future home construction may trend toward a denser, attached product. Additionally, the attention of apartment builders has been directed not only at the city's shrinking available residential land but also at its industrial and commercial areas. Inquiries have focused on conversion of these non-residential lands into high density residentiai rental projects. Meanwhile, the city is in the midst of updating its General Plan and Housing Element. A key consideration of the update process, partly because of state housing law, is how and where to accommodate high density housing. Though conversions of non-residential properties can help address this need, they also raise employment, economic, and neighborhood compatibility and acceptance concerns. Atthe same time, allowing people to live close to jobs and shopping creates opportunities for a healthier, walkable, and more sustainable community. All of these important topics, whether they regard a land use trend or conversion, must be balanced in consideration of recent court rulings that impact the city's ability to provide affordable housing, deny housing projects, and control growth. To provide an analysis and response to these present and emerging trends and challenges, staff has prepared this memorandum. The memorandum discusses the following topics: 1. Recent development and current market conditions 2. Demographic and land use trends 3. Envision Carisbad - overview and status 4. Land use conversions - points to consider 5. General Plan policy framework on locating higher density, mixed use and affordable housing 6. Housing Elements 7. Affordable Housing and Inclusionary Requirements Case Law 8. Excess Dwelling Unit Bank - purpose and need 1 - ~Wt'enttal1y, manyimiDlicatlons result from the information contained in these topics. However, staff beHi^v&s1:ht^e4n-particular are likely points for further discussion: 1. Current General Plan policy framework on locating higher density, mixed use and affordable housing 2. Affordable Housing and Inclusionary Requirements Case Law 3. Excess Dwelling Unit Bank - purpose and need To support the additional discussion, a summary and policy consideration section is provided at the end of topics 5 (General Plan Policy Framework on locating higher density, mixed use and affordable housing), 7 (Affordable housing and inclusionary requirements and recent case law), and 8 (Excess Dwelling Unit Bank - purpose and need). The information in each section is also repeated at the conclusion ofthis report. 1. Development History and Current Market Conditions The chart below illustrates Carisbad's residential, commercial and Industrial development over the last 10 years. The rate of development increased steadily until the mid-2000's, but by 2009, both new residential and non-residential building permit issuances fell to their lowest levels in at least the past decade. « 2,000 c 1,500 re ' i 1,000 £ 500 0. Residential and Non-residentiai Development Residential (d.u.'s) •» Non-residential (000 s.f.) . ^ " xN: Residential (d.u.'s) •» Non-residential (000 s.f.) . Residential (d.u.'s) •» Non-residential (000 s.f.) . ^ ^"^^ • m ' : 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Calendar Year As the economy slowly recovers and continues to gain momentum, development activity has increased gradually since 2009, as indicated in the chart above. While not at a scale experienced prior to the Great Recession, we are seeing some fairly significant projects going forward such as the Legoland Hotel, Hilton Carisbad Beach Resort & Spa, La Costa Town Square, and Palomar Commons. Approximately 300 attached higher density dwelling units (condominiums and apartments) in six projects are currently under construction or nearly under construction. Significant projects now in the planning stages include the west half of Robertson Ranch and Quarry Creek, which along with the Sunny Creek area, represent the last large areas of undeveloped residential land. There have also been an increased number of developer inquiries about prospective apartment projects, consistentwith regional and national trends as indicated in a recent North County Times article (Attachment A).^ Many of these inquiries have focused on select sites within the City's industrial core. As office and industrial construction remains relatively flat, developers are exploring conversion of these lands to high density residential uses. ' Eric Wolff Housing: Apartment Constniction Rebounding. http://www.nctimes.coin/bJogsnew/business/realside/housing-apartment-constriictiori-rebound 986d-04a0cba45ela.html (February 2012) 2. Carlsbad Demographic and Land Use Trends • Population^ In 2000: 78.247 In 2010: 105.328 (1^35%) By 2050: 129.381 (1^21%) On an annual basis, Carisbad's population grew 7 times faster in the past 10 years then it will grow over the next 40 years. Although Carisbad's population will continue to grow, it will do so at a much slower rate than in the recent past (about .5%/yr on average vs. 3.5%/yr since 2000). • Age Median age in 2000: 39 In 2010: 40 By 2050: 46 Carisbad's population is getting older. By 2050, persons age 55 and older ("Boomers") will account for some 87% of the future population growth. The fastest growing age groups will be 65-74 (1^68%), 75-84 (4*" 138%), and 85+ (1^221%). Combined, these age groups will make up 25% ofthe city's population by 2050, compared to about 14% today. Younger adults 20-34 ("Millennials") will also increase in their ranks (1^17%), while the number of adults 35-54 will be unchanged. Overall, middle and high school-aged children increase slightly (^3%), but children 9 and under will actually decrease (NPI%). This is consistent with national trends of couples having fewer children and later in life than previous generations.^ • income Median income in 2000: $65,854 In 2010: $77,097 By 2050: $108,624 Carisbad households are relatively more affluent as compared to those in other north county cities and the San Diego region as whole. This demographic shift will continue in the future. For example, the percentage of Carisbad households earning $100K or more is currently estimated at 38%. By 2050, the share increases to 54%. Carisbad's proportion of higher income households will continue to be higher than our neighboring cities (37%) and the rest of the region (35%). ^ Sources used for this section include: U. S. Census Bureau, American Community Survey, 5-Year Estimates; SANDAG; City of Carlsbad, Envision Carlsbad Working Paper #2, Local Economy, Business Diversity and Tourism (2010); 'Ben Brown. Dream Home for the new era: Compact, connected & mortgage-free. http://bettercities.net/newsopinion/blogs/ben-brown/l 7515/dream-home-new-era-compact-connected-mortgage-free (February 2012) • Land Use Trends The above demographic trends have implications for housing preferences in the future. Carlsbad is predominantly single-family today (about 68% of all housing) and will remain so in the future. Over the next 30-40 years, the age group that is most likely to purchase single- family homes (35-64) decreases in proportion to the total population. Demand for single- family housing in Carisbad may remain high though, due to the relative affluence of so- called "Prosperous Empty-nesters" who may prefer to remain in their homes rather than down-size. There is another trend emerging. The fastest-growing segments in Carisbad's population ("Millennials" and "Boomers") will shift demand to more multi-family housing (both rental and ownership), senior housing, and assisted-living facilities. By 2040, it is expected that two out of every three new dwelling units built in Carlsbad will be multi-family. • Jobs & Employment Land in 2008: 61.999 iobs By 2050: 87.100 jobs Commercial Land: 1.025 acres total (845 ac developed; 180 ac vacant/approved projects not yet built [note; square footage estimates are not available]). Office/Industrial Land. 1.891 acres totai (1,496 ac/17,600,000 sf developed; 132 ac/2,340,000 sf vacant with approved projects not yet built; 263 ac/2,310,000 sf vacant without approved projects). Carisbad is an employment center. The leading employment sectors include: manufacturing (9,791 jobs); wholesale trade (6,071 jobs); professional, scientific and technical services (6,044 jobs); food services, including eating and drinking places (4,969 jobs); and hotels and lodging (3,633 jobs). Today in all, there are approximately 1.37 jobs in Carlsbad to every employed resident. By 2050, there will be more jobs (87,100) than working age residents (70,872 age 18-64). There are also more jobs in the city than residences. The current jobs/housing ratio is 1.43. By 2050, the jobs/housing ratio will rise to about 1.72. A "balanced" ratio is typically considered to be around 1.2. Therefore, the present influx of workers from outside the city will continue to be significant into the future. 3. Envision Carlsbad Following the City Council's acceptance ofthe Carisbad Community Vision, staff began working on the General Plan update and to date have developed three land use concepts that show a range of land use options to guide the future ofCarlsbad toward achievement ofthe community's vision. The three land use concepts identify land throughout the city that has the potential to accommodate Carisbad's future projected growth (opportunity sites), which are vacant or underutilized. The land use concepts, identified below, propose three alternative strategies for accommodating projected population and employment growth, while reflecting the core values of the community's vision. • Concept A: Centers Concept A directs future development to several new neighborhood centers that are distributed to maximize accessibility from residential neighborhoods. Each center would include local shopping accessible to local residents; high and medium density housing would surround the retail centers or be integrated in mixed use buildings. In this concept, a significant majority ofthe city's future housing needs would be accommodated in the centers, enabling people to live close to shops and services and along transit corridors. • Concepts B: Active Waterfront This concept directs more development along the waterfront, enabling residents, hotels and other uses to be close to the ocean. About half of the city's new residential growth would be near the waterfront area. Plaza Camino Real and Quarry Creek would accommodate most ofthe other new residential growth. • Concept C: Core Focus Concept C directs new residential and commercial uses to strategic locations atthe edges of Carisbad's employment core In the geographic center of the city, which would enable residents to live close to jobs, shopping and restaurants. Just over a third ofthe new housing growth would be in central Carlsbad, while the rest would be dispersed at different locations. The three proposed land use concepts were presented to community members and property owners at workshops on January 31 and February 2, 2012. Community feedback received at the workshops and online is currently being analyzed by staff and our consultant team. In March - April, Staff anticipates meeting with the EC3 and Planning Commission to present the community's feedback on the land use concepts and get direction on deveiopment of a preferred plan. A draft preferred plan is anticipated to be presented to the City Council in June 2012. The preferred plan will be the foundation forthe General Plan update. Staff is continuing to process applications to amend land uses independently from the General Plan update. Once a preferred plan is reviewed and recommended by the City Council, consistency with the preferred plan will be an issue to consider when reviewing applications. 4. Land Use Conversions - Points to Consider Over the past year, staff has received numerous developer and property owner inquiries about building multi-family projects on sites scattered throughout Carisbad. These sites are predominantly vacant and non-residential and are in or near the industrial corridor from Avenida Encinas east to the Vista border. Two ofthe inquiries, for example, proposed several hundred apartments on vacant industrial lots along Palomar Airport Road. The inquiries were informal and have not yet resulted in the filing of actual applications. Conversion of land uses from non-residentiai (or low density residential) to high density residential requires the consideration of many factors as the iist below points out. • Public participation and expectations 1. Changes in land use require amendments to the general plan, zoning ordinance, and commonly in the industrial corridor, specific or master plans. Land use changes in the Coastal Zone would also require an amendment to the city's Local Coastal Program. All amendments are subject to public hearings. 2. Changes may be proposed where surrounding owners and residents have land use expectations based on existing uses and already approved land use documents, such as the general plan or a master plan. • Excess Dwelling Unit Bank (EDU) considerations 1. Conversions require EDU withdrawals. Non-residential land uses have no existing dwelling unit allocation and changes from a single-family to multi-family land use would require supplemental allocation of additional units to achieve higher densities. 2. EDU withdrawals are subject to City Council Policy Statement No. 43. To withdraw from the bank, a project must meet the Policy's criteria. Policy 43 is attached. 3. EDU withdrawals would need to be considered in light ofthe bank balance. Proposition E quadrant caps, and other projects requesting bank withdrawals. Other projects include city-initiated actions that need withdrawals, such as Housing Element Program 2.1 identifying Quarry Crfeek, the Barrio, the Village, and other sites which could accommodate additional density that are being considered under the General Plan update. • Constraints due to airport and industrial land uses 1. While there is an abundance of vacant industrial land, airport safety and noise considerations would preclude some Industrial corridor properties from residential use. 2. Residential uses may impact the types of industrial or manufacturing uses that can locate nearby. • General Plan Land Use Element and Housing Element considerations 1. Land Use Element locational criteria for higher density housing would apply. 2. Conversions may contribute to RHNA and provide housing for lower income persons. 3. Conversions of non-residential lands may fulfill specific Land Use and Housing Element policies on integration of housing with non-residential development and also may fulfill Housing Element Program 2.3, which encourages residential uses in major commercial and major office/industrial centers where appropriate and where not precluded by environmental and safety considerations. • Other 1. Conversion of non-residential areas may align with the Carisbad's Community Vision, established as part ofthe first phase of Envision Carisbad, by putting residences close to commercial and job centers and thus encouraging walking, sustainability, livability, and public transit. 2. Multi-family uses generate less traffic than industrial and commercial uses. 3. Conversion of non-residential land to residential uses may decrease tax revenue and increase public facility needs. 5. Currrent General Plan Policy Frameworl< on Locating Higher Density, Mixed Use and Affordable Housing • Overview Guidance on where housing should locate in Carisbad is provided in the General Plan Land Use and Housing elements. In addition, both elements contain specific criteria on the location of higher density, mixed use, and affordable housing. These criteria are in the form of goals, objectives, policies and programs. For this discussion, "higher density housing" is provided by the RMH and RH General Plan residential land use designations, which make up about 13 percent of ail existing residential lands. (The General Plan also uses the terms "multi-family development" and "medium-high density" when describing higher density housing.) "RMH" means Medium-High Density and "RH" means High Density. These designations require minimum densities of 12 and 20 dwelling units per acre, respectively. "Mixed use" housing refers to residential units located in commercial and industrial areas. "Affordable housing" means residences affordable to persons with lower and moderate incomes. All three terms are discussed together because more often than not, units built in affordable and mixed use projects are higher density housing. Land Use Element policies establish location criteria for all three housing types. The criteria call for affordable, higher density, and mixed use housing to be: 1. Located throughout Carisbad 2. Sufficient in quantity to meet anticipated growth while retaining the present predominance of single family residences 3. Compatible with adjacent land uses 4. In or near commercial areas, employment centers and by major transportation corridors 5. Close to open space, community facilities, and other amenities 6. Supported by public facilities and services (existing or proposed) adequate to accommodate the increased population 7. Served by adequate and convenient commercial services (existing or proposed) 8 Attachment D provides the complete wording of each goal, objective and policy. The programs In Carisbad's current Housing Element (2005-2012) implement General Plan policies to ensure Carlsbad provides a variety of housing for all economic segments and meets its Regional Housing Needs Assessment (RHNA). The programs identify specific locations or zones in which higher density housing should locate. Programs 2.1 and 2.3 in particular identify actions the City will take to provide land or standards at densities appropriate for higher density housing. The actions, which are consistent with the Land Use Element policies establishing location criteria, are summarized in Attachment E. Program 2.3 encourages mixed use developments. While the action part of the program (see Attachment E) is limited to commercial zones as noted above, the program also provides overall location guidance by stating "major industrial/office centers, where not precluded by environmental and safety considerations, should incorporate mixed industrial/office/residential uses." Summary and Policy Considerations Staff believes the city's existing General Plan policy framework is adequate and has served the city well. Should an application be filed to change the land use designation from non- residential or low density residential to high density residential, the existing General Plan policies are sufficient to evaluate such a request. Considerations: 1. New policies could specifically address land use conversions from non-residential to residentiai and the location of residential in industrial areas. 2. For conversions in established areas, a policy could emphasize the need for community engagement. 3. Conversions of non-residential land could be subject to a policy that requires analysis of fiscal impacts and any limitations that new residentiai uses would impose on surrounding land uses. Please note the opportunity to review the entire policy framework will occur as part of the General Plan Update. 6. Housing Elements • Overview The State ofCalifornia certified Carlsbad's current Housing Element in March 2010. The element addresses housing needs for the fourth housing cycle, which covers the period 2005-2012. The next, or fifth, housing cycle is effective for an eight year period that begins January 1, 2013, and ends December 31, 2020. During this cycle, Carisbad will adopt two, four year elements. 9 State law requires housing elements for the fifth cycle to be adopted by April 27, 2013, or 18 months after the adoption of SANDAG's 2050 Regional Transportation Plan (RTP) and its Sustainable Communities Strategy (SCS); the passage of these documents occurred on October 28, 2012. Staff anticipates Carlsbad's adoption of its next Housing Element by the April 2013 state deadline. The Housing Element will be updated as part ofthe overall General Plan update. Work has already begun to collect demographic data, identify housing needs and Regional Housing Needs Assessment (RHNA) accommodations, and prepare an outreach plan; a meeting with housing stakeholders to help Identify relevant issues for the update is tentatively scheduled for the end of March 2012. Following adoption, staff will send the housing element to the State Department of Housing and Community Development (HCD) for certification. Certification provides a number of benefits, described below. • RHNA Carisbad's RHNA allocation for the 2013-2020 (fifth) housing element cycle (see Table A below) was adopted by SANDAG concurrent with the RTP and SCS. The allocation requires Carisbad to identify sites at suitable densities to enable developers to build the number of homes identified in Table A during the cycle. While other methods exist to satisfy a portion of the allocation, such as acquisition of lower income housing to preserve its affordability (e.g., Tyler Court apartments), identifying adequate sites is the primary tool. Cities are not obligated to provide land or build units to meet RHNA. TABLE A CARLBAD'S RHNA ALLOCATION FOR THE FIFTH (2013-2020) HOUSING ELEMENT CYCLE Income Category Very Low Low Moderate Above Moderate TOTAL Number of Units 912 693 1,062 2,332 4,999 Percentage of total 18% 14% 21% 47% - Satisfying RHNA presented the biggest challenge with adoption ofthe current housing element. While identifying land at the low densities appropriate for above moderate households was and is not expected to be an issue, identifying sites to accommodate Carisbad's very low, low (together considered "lower") and moderate income RHNA will be difficult. Though the number and percentage of units to accommodate this need was much greater in the current cycle (4,965 units/59% ofthe total need) than the upcoming cycle (2,667 unlts/53% ofthe total need), staff anticipates the challenge will remain. With the current housing element, as Carisbad did not have adequate sites to accommodate the lower and moderate income need, land use amendments were required. 10 For the upcoming housing cycle, HCD will require Carlsbad to Identify available land at densities HCD considers necessary to make units affordable to lower and moderate income residents. Based on certification of Carisbad's current housing element, these densities will be at least 12 (moderate) and 20 (lower) dwelling units per acre. "Available land" consists of sites that are vacant or have redevelopment potential. Though two, four-year elements will be adopted over the upcoming eight year cycle, programs in the "first" housing element, to be adopted in 2013, will address the RHNA needs for the entire cycle. Sites the city identified in the current housing cycle toward meeting lower and moderate income needs can again be counted to help meet RHNA in the upcoming 2013-2020 housing cycle only If they meet the following caveats: 1. The site remains vacant with no approved project; 2. The site remains vacant with an approved project and it is clear that a portion or all of the project when built will provide or be affordable to lower or moderate income households (e.g., the west half of Robertson Ranch); and 3. Any land use actions Identified in the current housing element, whether city-initiated or otherwise, to provide necessary densities were completed during the current housing cycle, (e.g., General Plan, zoning and other amendments necessary to provide necessary densities at Quarry Creek or the Barrio neighborhood). Attachment E provides status and other information about current Housing Element programs 2.1 and 2.3. These programs specify the actions the city will take in the current housing cycle (2005-2012) to meet its RHNA obligations. • Certification Benefits The requirement for a certified housing element applies to a charter city and provides both legal and financial benefits. First, state certification provides a local jurisdiction with a rebuttable presumption that the housing element is legally valid. Thus, when a legal challenge is brought against a certified housing element, the burden of proof Is shifted to the challenger to demonstrate that the housing element is legally infirm. Without a certified housing element, the City has the burden of establishing its validity. Moreover, case law has established that a finding of consistency with the General Plan may not be valid where a general plan Is Incomplete or Inadequate. Since ail land use decisions require a finding of general plan consistency, a defective housing element may jeopardize the City's approval of both residential and non-residential projects. It Is also imperative that the City have a certified housing element to be eligible for certain funds from SANDAG and HCD; this funding is listed in Table B below. In fact, per SANDAG Board Policy 33 (revised January 2012), SANDAG will not award any discretionary funding identified in Table B unless cities meet these criteria: 11 1. Have a housing element certified by HCD, and; 2. Report annually the progress in providing housing to the four different income categories (Carisbad does this). TABLE B DISCRETIONARY FUNDING PROGRAMS SUBJECT TO SANDAG BOARD POUCY 33 CRITERIA Funding Program Allocating Agency Federal • Transportation Enhancement program SANDAG State • Transportation Development Act (TDA) Article 3 - Non-motorized Program SANDAG Local • TransNet Bicycle, Pedestrian, and Neighborhood Safety Program • TransNet Smart Growth Incentive Program SANDAG • Workforce Housing Grant HCD • In-FIII Development Grant HCD 7. Affordable Housing and Inclusionary Requirements Case Law • Overview The City Council has previously been briefed on recent court decisions that have an Impact on the production of affordable housing. Including the requirement to specifically identify adequate sites in the City's Housing Element, and those relating to the City's inclusionary requirements. Ifthe amount of new rental affordable housing developed/produced within the community Is reduced, that in turn impacts the city's ability to meet significant regional housing needs allocations; Industry trends in housing development are currently supporting development of apartments but not necessarily with affordable rents for low Income households, and the Po/mer decision dictates that inclusionary requirements cannot be applied to rental housing units without some form of direct financial assistance or other incentives. The city amended its inclusionary housing ordinance in 2010 to be consistent with the decision in Palmer/Sixth Street Properties, LP, v. City of Los Angeles, 175 Cal.App.4*'' 1396 (2009). The ruling has already Impacted Carisbad's ability to provide affordable housing. In 2011, the Planning Commission approved four, six-unit apartment projects in the La Costa area, all proposed bythe same developer. The Commission could not condition each project to pay a fee in lieu of providing affordable units as this would have violated the Costa- 12 Hawkins Act which invalidated rent control. The Commission did condition the developer to pay any applicable housing impact fee thatthe City Council might establish prior to building permit Issuance for the project. Staff anticipates the developer will begin project construction soon and before a fee is established. The decision In Building Industry Assodation of Central California v. City of Patterson, 171 Cal.App.4th 886,899 (2009) impacts how the city can Impose fees to assist with the development of affordable housing; financial resources are needed to assist developers In building affordable housing for low income households because Increased density alone typically does not result in the production of new units; If there is no inclusionary requirement for rental units and no related In lieu fee available, revenue to assist affordable housing developers will be substantially reduced. Summary and Policy Considerations The City has been presented with real impacts related to the Palmer and Patterson court decisions. Despite the rulings, staff believes the city can continue to realize affordable housing production from both ownership and rental projects through amending City Council Policy No. 43 and establishing a Rental Housing Impact Fee. These two recommended proposals, described below, could be Included on an agenda at a future regularly scheduled City Council meeting for City Council consideration, at which time the Council could direct staff to proceed accordingly. 1. First, staff recommends that the City Council consider structuring the withdrawal of units from the Excess Dwelling Unit Bank as a regulatory incentive granted only for (1) projects that produce affordable housing that furthers Carlsbad's Housing Element goals or (2) mixed Income projects that have a negotiated number of restricted units for low or moderate income households if this would allow the city to impose inclusionary requirements in rental projects. An amendmentto City Council Policy No. 43 would require a project seeking a withdrawal from the dwelling unit bank to meet the qualifications listed in the policy, and if so the project would be provided an automatic allocation of additional dwelling units resulting in a density Increase. Presently, the provision of low or moderate income housing with a project Is not always required for an allocation of units from the dwelling unit bank. Further, identifying a bank withdrawal as an "Incentive" may also require amendmentto Zoning Ordinance provisions regarding density bonus and incentives or concessions. If a bank withdrawal is an incentive, it would allow the city to mandate inclusionary requirements for a rental project, without the necessity for accord by the developer. However, if the project does not require a withdrawal from the bank or some other incentive such as direct financial assistance, the city couid not require inclusionary housing for a rental project. 13 2. Second, staff recommends placing on the council's regular agenda an item to consider obtaining a nexus study to establish a Rental Housing Impact Fee with the fees generated being used to develop affordable housing at appropriate locations within the City, or allow developers to voluntarily agree to restrict units within their developments in lieu of payment of a new housing Impact fee. Last year, the City of Solana Beach adopted an impact fee applicable to rental projects of five units or more based on a nexus study conducted by Keyser Marston Associates. The contracted amount for this study, approved in January 2010, was $52,000 (including a $5,000 contingency). Besides the two recommended proposals above, other options for City Council consideration include the following: 1. Advocate for legislative change to allow City inclusionary obligations to apply to new rentals to ensure that these developments are required to assist In producing housing affordable to low income households; and/or 2. Continue ali existing policies and programs without revisions. 8. Excess Dwelling Unit Bank - Purpose and Need • Purpose In 1986, Carisbad voters passed Proposition E (Growth Management), which established an overall dwelling unit cap for the city, as well as a dwelling unit cap for each of the four city quadrants (which cumulatively add up to the city dwelling unit cap). To ensure that residential development does not exceed the dwelling unit caps. Proposition E also established Growth Management Control Point (GMCP) densities for each ofthe residential land use designations. For example, the Residential Low Medium (RLM) land use designation has a GMCP density of 3.2 dwelling units per acre. Table C shows the Growth Management dwelling unit caps per the proposition and the number of existing dwelling units in the city. 14 TABLE C GROWTH MANAGEMENT DWELUNG UNIT CAPS (PER PROPOSITION E) AND EXISTING DWELUNG UNITS City Quadrant Growth Management Dwelling Unit Cap (Per Proposition E) Existing Dwelling Units as of Feb 29,2012 Percentage of Residential Buiit-Out NW 15,370 12,926 84% NE 9,042 5,708 63% SW 12,859 10,942 85% SE 17,328 15,609 90% Citywide Total 54,599 45,185 83% Because the General Plan allows residential development to occur below and above the GMCP density (within a specified range), the city established the Excess Dwelling Unit Bank as a tool to. ensure consistency with the Growth Management dwelling unit caps. City Council Policy Statement No. 43 (Attachment C) provides direction on the deposit and withdrawal of units from the Excess Dwelling Unit Bank. As described below and as per City Council Policy No. 43, when residential development is built at a density below the GMCP density, the "excess" units (the difference between what was built and what could have been built at the GMCP density) shall be deposited Into the Excess Dwelling Unit Bank; units In the bank mav then be used to allow residential development above the GMCP density for other projects. • How dwelling units get deposited into the Excess Dwelling Unit Bank "Excess" dwelling units become available and, per City Council Policy No. 43, shall be deposited into the Excess Dwelling Unit Bank as a result of: 1. Residential projects being approved and constructed with fewer dwelling units than would have been allowed by the density control points ofthe Growth Management Plan, or 2. Land designated for residential uses Is developed with non-residential uses, 3. A general plan amendment that changes a residential designation to a non- residential designation, thereby removing the density originally allocated to the property. • Need for/use of excess units The city may allow residential development above the applicable GMCP density; however, the units above the GMCP density must be allocated from and come out of the Excess Dwelling Unit Bank. City Council Policy No. 43 specifies that only certain types of projects qualify for an allocation from the Excess Dwelling Unit Bank, including: 15 1. Conversion of (I) non-resldentlal land to residential land or (ii) low-density residential land to higher-density residential land. 2. Housing located in the Village (a portion ofthe excess dwelling unit bank Is "reserved" for future housing In the Village). 3. Housing projects affordable to lower and moderate income households. 4. Housing projects that request a density bonus pursuant to state density bonus law. 5. Senior citizen housing. 6. Transit-oriented projects. Example of deposit/withdrawal from the Excess Dwelling Unit Bank The following two recently approved projects are examples of residential development that resulted In a deposit or withdrawal from the Excess Dwelling Unit Bank. TABLED EXCESS DWELUNG UNIT BANK DEPOSIT ANO WITHDRAWAL EXAMPLE Project Requested Action Dwelling Units Allowed Per GMCP Density Dwelling Units Approved Bank Deposit/ Withdrawal Rancho Milagro Single family subdivision (Sunny Creek area of NE Quad) 53 dwelling units (17 acres X 3.2 du/ac) RLM GMCP density 19 dwelling units 34 excess dwelling units deposited Tavarua Senior Apartments 100% Affordable senior housing (Barrio area) § dwelling units (1 acre x 6 du/ac) RM GMCP density §0 dwelling units (density increase) 44 excess dwelling units withdrawn • Excess Dwelling Unit Bank Current Balance City staff tracks the deposits and withdrawals from the Excess Dwelling Unit Bank on a project by project basis to ensure compilance with the Growth Management dwelling unit caps. In 2002, the City Council reduced the bank balance from approximately 5,500 to 2,800 units. Since that time, deposits and withdrawals from the bank have resulted in a current (Feb 29,2012) Excess Dweiling Unit Bank Balance of 3,002 dwelling units. Table E below shows how the City Council's 2002 removal of units from the bank resulted in (1) a reduction of the Proposition E quadrant caps, (2) a reduction of the Proposition E citywide cap (by 2,694 units) and, in turn, (3) an increase in the the build-out percentages in relation to the caps that resulted from the reduction by an average four percent. These figures are in comparison with those in Table C on page 14. 16 TABLE E GROWTH MANAGEMENT DWELUNG UNIT CAPS (PER CITY COUNCIL 2002 BANK REDUCTION) AND EXISTING DWELLING UNITS City Quadrant Growth Management Dwelling Unit Cap (Per City Council 2002 Bank Reduction) Existing Dwelling Units as of Feb 29,2012 Percentage of Residential Built-Out NW 14,592 12,926 89% NE 8,507 5,708 67% SW 11,831 10,942 92% SE 16,975 15,609 92% Citywide Total 51,905 45,185 87% Excess dwelling units for the Housing Element Program 2.1 ofthe current Housing Element (2005-2012) identifies various sites where the land use designation or zoning regulations need to be changed to accommodate the city's share ofthe Regional Housing Needs Assessment (RHNA) forthe current Housing Element. Excess units will need to be allocated to most of those sites because the Housing Element programs require a change that will result In more units on the sites than currently allowed by the existing General Plan. Table F lists the sites identified in Housing Element Program 2.1 that require an allocation from the Excess Dwelling Unit Bank. In addition, the table lists shopping center sites identified In Housing Element Section 3 as potential mixed use residential and commercial developments. Since these sites have no residential unit allocation, they too require a bank allocation. The residential units that could result from mixed use development at these sites also contribute toward the city's RHNA share. 17 TABLE F EXISTING EXCESS DWELUNG UNIT BANK BALANCE AND AVAILABIUTY CURRENT EDU BANK BALANCE^ NW Village NW Other NE SW SE TOTAL CURRENT EDU BANK BALANCE^ 875 493 645 722 267 3002 Excess Units Needed for Housing Element Sites Viiiage -875 -875 Excess Units Needed for Housing Element Sites Barrio -227^ -271 Excess Units Needed for Housing Element Sites Plaza Camino Real -285 -285 Excess Units Needed for Housing Element Sites North County Plaza -60 -60 Excess Units Needed for Housing Element Sites Vons Tamarack -25 -25 Excess Units Needed for Housing Element Sites Country Store -25 -25 Excess Units Needed for Housing Element Sites Quarry Creek -363 -363 Excess Units Needed for Housing Element Sites Sunny Creek -88 -88 Excess Units Needed for Housing Element Sites Ponto -117 -117 Excess Units Needed for Housing Element Sites Vons La Costa -42 -42 TOTAL AVAILABLE FOR OTHER PROJECTS NA NA NA NA NA 851^ ^ As of the bank reduction in 2002, the excess unit bank is no longer based on quadrants; however, the Growth Management cap for each quadrant cannot be exceeded. The balances shown here reflect the quadrant balances that existed at the time of the reduction adjusted per the changes to the bank that have occurred since the reduction to 2,800 units In December 2002. ^The number of excess units needed for the Barrio reflects the recent withdrawal of 44 units for the Tavarua Senior Apartments, which counted toward satisfying the Housing Element requirement for the Barrio. ^ All of these excess units, as well as some ofthe excess units that were removed from the bank in 2002, will be needed to facilitate the General Plan update, see below for more information on this topic. The city is currently in the processes of updating the General Plan, Including the Housing Element. The Housing Element update will include an analysis of the city's mventory of developable sites and their capacity to accommodate the city's share ofthe RHNA forthe next housing cycle (2013-2020). Although that analysis has not yet been completed, staff anticipates that the city will need to increase the number of dwelling units allowed on a certain number of sites to meet the RHNA requirements (see Table A, page 10), and that the number of dwelling units currently available in the Excess Dwelling Unit Bank may not be sufficient to allow for the necessary dwelling unit increase. This will be determined during the Housing Element update process and may require at least a portion ofthe units "removed" from the Excess Dwelling Unit Bank in 2002 to be restored. Excess dwelling units for the General Plan update As part of the General Plan update, the city's land use map will also be updated to ensure that planned land uses are appropriate to accommodate the projected housing need, as well as employment growth, over the next 25 years. In comparison to the amount of housing needed to satisfy the RHNA In the next Housing Element, which only addresses the housing need over an eight year period, the General Plan aims to establish residential land use designations and policies that will accommodate the amount of housing needed over the next 25 years. 18 More information about the General Plan update can be found above in the section titled Envision Carisbad. However, in relation to the Excess Dwelling Unit Bank, the General Plan update program is currently studying three proposed land use concepts that Illustrate different options for accommodating future growth. In terms of residential growth to meet future housing needs, all three land use options depend on restoring some, if not most or all, ofthe excess dwelling units that were removed from the Excess Dwelling Unit Bank in 2002. However, the build-out capacity of each ofthe three proposed land use concepts Is below the Growth Management dwelling unit caps, as shown in Table H below. Table G reflects the number of excess dwelling units that would be needed to facilitate the three proposed land use concepts. TABLE G EXCESS DWELUNG UNITS NEEDED FOR THE GENERAL PLAN UPDATE EDU Bank Balance as of Feb 29, 2012^ Excess Units Needed for the Proposed General Plan Update Land Use Concepts^ EDU Bank Balance as of Feb 29, 2012^ CONCEPT A CENTERS CON AC WATE CEPTB TIVE RFRONT CONCEPT C CORE FOCUS EDU Bank Balance as of Feb 29, 2012^ #of Excess Units Needed Excess Units Available for Other Projects #of Excess Units Needed Excess Units Available for other Projects #of Excess Units Needed Excess Units Available for Other Projects NW VILLAGE 875 875 0 875 0 875 0 NW OTHER 1271 1122 149 1068 203 1086 185 NE 1180 1108 72 953 227 1106 74 SW 1750 1140 610 1268 482 714 1036 SE 620 500 120 474 146 583 37 TOTAL 5696 4745 951 4638 1058 4364 1332 ^ Includes all Housing Element sites anc ^ Balances shown in this table reflect th bank in 2002. other sites within the concept map focus areas. e addition ofthe excess units that were removed from the 19 TABLE H BUILDOUT CAPACITY OF PROPOSED LAND USE CONCEPTS City Quadrant Growth Management Dwelling Unit Cap Concept A Centers Concept B Active Waterfront Concept C Core Focus NW 15,370 13,763 13,753 13,763 NE 9,042 7,322 7,192 7,352 SW 12,859 11,646 11,766 11,296 SE 17,328 16,157 16,127 16,227 Citywide Total 54,599 53,648 53,541 53,267 • Summary and Policy Considerations City Council Policy No. 43 mandates the depositing of excess dwelling units in the Excess Dwelling Unit Bank. On the other hand, withdrawing bank units is discretionary. The policy already identifies the limited instances in which withdrawals can occur. In light of the Palmer case and the ever-present challenge in providing affordable housing, staff recommends that the City Council consider further limitations on unit withdrawals from the bank. As discussed in the previous bulleted item, unit withdrawals are recommended only for projects that produce affordable housing in furtherance of Carlsbad's Housing Element goals. Additional limitations on unit withdrawal have these considerations: 1. It would preserve excess units for projects with affordable housing, helping Carlsbad meet Its RHNA obligations into the future. 2. By preserving units for affordable housing projects. It would assist with housing element certification. 3. It would limit the use of excess units. 20 Summary and Policy Considerations (as previously stated in items 5,1, and 8) Current General Plan policy framework on locating higher density, mixed use and affordable housing Staff believes the existing policy framework Is adequate and has served the city well. Should an application be filed to change the land use designation from non-residential or low density residential to high density residential, the policies are sufficient to evaluate such a request. Other options: 1. Place on the regular city council agenda consideration of new policies that could specifically address land use conversions from non-residential to residential and the location of residential in Industrial areas. 2. For conversions In established areas, a policy could emphasize the need for community engagement, 3. Conversions of non-residential land could be subject to a policy that requires analysis of fiscal Impacts and any limitations that residential would impose on surrounding land uses. Please note the opportunity to review the entire policy framework will occur as part of the General Plan Update. • Affordable Housing and Inclusionary Requirements Case Law The City has been presented with real Impacts related to the Palmer and Patterson court decisions. Despite the rulings, staff believes the city can continue to realize affordable housing production from both ownership and rental projects through amending City Council Policy No. 43 and establishing a Rental Housing Impact Fee. These two recommended proposals, described below, could be Included on an agenda at a future regularly scheduled City Council meeting for City Council consideration, at which time the Council could direct staff to proceed accordingly. 1. First, staff recommends that the City Council consider structuring the withdrawal of units from the Excess Dwelling Unit Bank as a regulatory Incentive granted only for (1) projects that produce affordable housing in furtherance of Carlsbad's Housing Element goals or (2) mixed income projects that have a negotiated numberof restricted units for low or moderate income households if this would allow the city to impose inclusionary requirements in rental projects. An amendment to City Council Policy No.43 would require a project seeking a withdrawal from the dwelling unit bank to meet the qualifications listed in the policy, and if so the project would be provided an automatic allocation of additional dwelling units resulting in a density increase. Presently, the provision of low or moderate income housing with a 21 project Is not always required for an allocation of units from the dwelling unit bank. Further, Identifying a bank withdrawal as an "incentive" may also require amendment to Zoning Ordinance provisions regarding density bonus and incentives or concessions. If a bank withdrawal is an incentive, it could allow the city to mandate inclusionary requirements for a rental project, without the necessity for accord by the developer. However, If the project does not require a withdrawal from the bank or some other incentive such as direct financial assistance, the city could not require inclusionary housing for a rental project. 2. Second, staff recommends placing on the council's regular agenda an item to consider obtaining a nexus study to establish a Rental Housing Impact Fee to be used to develop affordable housing at other locations within the City, or allow developers to voluntarily agree to restrict units within their developments in lieu of payment of the new Impact fee. Last year, the City of Solana Beach adopted an impact fee applicable to rental projects of five units or more and based on a nexus study conducted by Keyser Marston Associates. The contracted amount for this study, approved in January 2010, was $52,000 (including a $5,000 contingency). Besides the two recommended proposals above, other options for City Council consideration include the following: 1. Advocate for legislative change to allow City inclusionary obligations to apply to new rentals to ensure that these developments are required to assist in producing housing affordable to low income households; and/or 2. Continue all existing policies and programs without revisions. Excess Dwelling Unit Bank - purpose and need City Council Policy No. 43 mandates the depositing of excess dwelling units In the Excess Dwelling Unit Bank. On the other hand, withdrawing bank units is discretionary. The policy already Identifies the limited Instances in which withdrawals can occur. In light of the Palmer case and the ever-present challenge In providing affordable housing, staff recommends further limitations on unit withdrawals from the bank. As discussed in the previous bulleted item, unit withdrawals are recommended only for projects that produce affordable housing in furtherance of Carlsbad's Housing Element goals. Additional limitations on unit withdrawal have these considerations: 1. It would presen/e excess units for projects with affordable housing, helping Carisbad meet its RHNA obligations into the future. 2. By preserving units for affordable housing projects, it would assist with housing element certification. 3. It would limit the use of excess units. 22 GTB:SD Attachments A. North County Times article: Housing: Apartment construction rebounding (February 2012) B. Cities 8i Towns Online article: Dream tiomefor ttie new era: Compact, connected & mortgage free (February 2012) C. City Council Policy Statement No. 43 D. General Plan Land Use Element policy location criteria for higher density housing E. Summary and status of Housing Element programs 2.1 and 2.3 23 HOUSING: Apartment construction rebounding Page 1 of 2 (x| The North County Times-Califomian HOUSING: Apartment construction rebounding By ERIC WOLFF .ewolf«®nctim€s.coiii | Posted! Monday, Febraary 27,2012 6:00 pm The sounds of cranes and bulldozers can be heard again in San Diego County as builders expect to finish nearly five times as many apartments this year as they did last year, the most since 2004, according to a local real estate .analyst. In the past few months, developers in Riverside County got the bureaucratic wheels tuming for an apartment boom of their own to start in 2013, according to permit filings and local observers. Apartment ownership became attractive in recent years as former homeowners with bad credit and younger people determined to preserve Job mobility created enough demand to Jet landlords raise rents. Those ftindamentals plus low interest rates made apartment buildings a prime target for institutional investors looking for safe investments in both counties. "It's a nice rebound," said Russ Valone. founder of MarketPointe Realty Advisors, a homebuilder consultant, San Diego County builders will deliver 1,991 apartment units this year, a big jump from the 400 units delivered last year, according to MaricetPointe. San Diego County hasn't seen so many apartments compieted since 2004, when builders produced ,2,273 apartments. In North Counly, a 108-unit apartment complex fn San Marcos and a 198-unit project In Escondido should be ready for renters before the end of the year. Apartment construction doesn't have as wide a ripple In the economy as single-family houses — more people can be housed at lower cost in an apartment complex — but the new buildings offer a beam of hope to long-suffering building-trades woricers. No apartments are under construction in Southwest Riverside County, but builders are scouting locations and securing permits, said Paul Runkle. a senior vice president with CBRE Inc. who is a multifamily specialist with an office in Temecula. Last year in Riverside County, builders applied to put up 1,061 apartments, double the number of permits in 2010, according to the Construction Industrv Research Board, a nonprofit. "Some developers are now exploring development," Runkle said. "You wouldn't have heard that from me in the third quarter (summer) df 2011," Few builders constructed rental Units in the mid-2000s, as easy loans fi-eed prospective renters to become homebuyers. But as the foreclosure crisis took hold and unemployment rose, former homeowners with ruined credit still needed a place to live, and they tumed to apartments or house rentals. Meanwhile, a younger generation saw friends and family trapped in houses they couldn't sell and chose to rent to preserve their mobility, Valone said. "They're one of the first generations to see significant drops In real estate values," he said. "They don't have that 'I have to buy because real estate always goes up' attitude." The twin forces created strong demand for apartments, which pushed down vacancy rates and raised rents. As of the end of September, the most recent data available, vacancy rates In San Diego County fell 1.10 percentage points to 3.4 percent and the average effecttve rent rose 2.2 percent to $1,2S7, according to Marcus & Mlllichap Real Estate Investment Services. "The apartment :fiindamentals are at a point now where they're the best they've ever been — potentially ever," said Brian Hwisen. a director at Wood Partners, the company putting up the complex in San Marcos. That strong d^and means apartment-complex owners can be assured of a steacfy income, even ifthe sale value of apartment buildmgs remains unchanged. Investors, especially instiUitlonal Investors like pension i^nds, worried about volatile stock and commodity markets and tumed to top-quality apartment buildings as an option, said Darcv Miramontes. an apartment building broker with Jones Lang LaSaiie, a commercial real estate brokerage. http://www.nctimes.co^l/blogsnew^usiness/redside/housing-apa^tment-constmc^^ 03/01/2012 HOUSING: Apartment construction rebounding Page 2 of 2 At tiie same time, interest rates have been very low, making it easier for developers to atbract investor money at low cost so they could start construction, Miramontes said. "Apartment buildings are the darting of the commercial investment market," Miramontes said. Southwest County lags San Diego County in the overall economic cycle. High imemployment there forced parents and children to double up on housing, reducing demand. But there's also a shortage of rentals, creating an opportunity for builders, said Bill Blankenship, CEO of the Building Industry Association in Riverside County. And the worst of the foreclosure crisis may be ending as the economy starts to rebound. "We're at the bottom of a cycle and coming out of it," Runkle said. littp://wvyw.nctimes.coni^logsnew/business/realside/housing-apartment-cons^ 03/01/2012 Dream home for the new era: Compact, connected & mortgage-free | Better! Cities & To... Page 1 of 5 TOWNS Dream home for the new era: Compact, connected Sz: mortgage-free Bkig post by Ben Brown on 27 Feb 2012 Ben Brown, Better! Cities & Towns The future is here. And it's for lease. Even before the Great Recession, real estate market analysts Todd Zimmerman, Laurie Voik and Chris Nelson were patiently explaining tlie demography-is-destiny argument for an inevitable shift in American housing. Ifs all about the numbers. Between them, two monster generational cohorts, Boomers O^orn 1946-1964) and Millennials (born 1981- 2000), account for more than 150 million people. There's broad diversity within members ofthe generations when it comes to attitudes and capacities for acting on them, of course. But there are so just so darn many people in the two age groups that even small slivers of tlie total number will have multiplier effects on housing supply and demand. The difference-making population slivers may not be all that small, it turns out. These age groups both trend away from family norms of the past. Many more of them at both ends ofthe age dusters live alone or have no children. http://bettercities.net/news.opimon/blogs/ben-browii/17515/dream.homp-nftw.f.r«-^^^ n-j/ic/omo Dream home for the nev^^ era: Compact, comiected & mortgage-free | Better! Cities & To... Page 2 of 5 Percent of households with and without children I960 2000 2025 • HHs w/children 48% 33% 28% • HHs w/o children $2% 67% 72% • Single-person HHs 13% 26% 28% Source: Research/anailvsis by Arth-ur Xhris' Neison, University of Utah What's more, many in both generations seem more interested in compact, mixed-use neighborhoods than in car-centric, single-use suburban housing. The National Association of Realtors' 2miCim]LiiBMn.te MeiMcely^^ is among the latest of tlie attitudinal checks. In that report, 58% of respondents indicated a preference for "a neighborhood with a mix of houses and stores and other businesses within an easy walk." Since the pre-recession housing boom was producing nothing like a 60/40 mix of mixed-use, walkable neighborhoods compared to drive-to 'burbs, we can assume a pent-up demand for the Smart Growth stuff. And that was before the housing bust and rising gas prices began forcing Americans to rethink what, exactly, constitutes an affordable version of how and where they want to hve. In an article in the Nov./Dec. 2010 Washington Monthly, Patrick C. Doherty and Christopher Leinberger characterized the dilemma this way: "Both of these huge demographic groups want something that the U.S. housing market is not currently providing: small, one-to-three-bedroom homes in walkable, transit- oriented, economically dynamic, and job-rich neighborhoods." For many folks in those two generations, the combination of economic reahties and quality of life desires are pushing them towards rentals. "The country is on the cusp of fundamental changes m our housing dynamics," said Doug Bibby, president ofthe National Multi-Housing Council in a Januaiy online stoiy for Multifamily Executive. "Preferences are driving more people away from the typical suburban house and toward the type of lifestyle that rental housing offers." Housing industry trend watchers have been all over this stoiy for the better part of a year. Now, everybody else is picking up on it. The Birmingham News made note last week ofthe against-the-grain growth of http://bettercities.net/news-or>inion^loes/ben-brown/17515/dreann-hnme-Tiftw.ftrfi-PYimn!i n^/i ^nn 10 Dream home for the new era: Compact, connected & mortgage-free | Better! Cities & To... Page 3 of 5 downtown residences in a down market for home sales. In the decade between 2000 and 2010, downtown Birmingham residents increased by 32 percent and the number of occupied rental units by 18 percent. The New York Times weighed in with a stoiy on how demand for rental housing is outstripping supply and driving up rents. And the debate is heating up among developers and builders on how much to invest in this new direction. Is the rental explosion a temporary trend that will revert to old home-ownership patterns when the economy picks up? Or are we, as Bibby and the demographic analysts suggest, into a whole new housing era? I've been convinced by Zimmerman/Volk, Nelson and others that the shift to a higher proportion of rental housing is at least long-term, if not permanent. And I was on a panel at the International Building Show in Orlando earlier this month with multifamily experts whose numbers were even more compelling. Lesley Deutch of John Burns Real Estate Consulting said her research suggests "a 9.1 milhon increase in renter households over the next five years, more than double the rate ofthe last five years." And the trends driving those numbers are not likely to fade anytime soon. The Millennials, many of whom are stuck living with their parents until job prospects give them the bucks to move out on their own, account for much ofthe pent-up demand. 6.0 25 to 34 m$ ilvhfig vm th^ Pamm 15K 13% 12% 11% im Sowxe: US Census fhsvimi, Omt For the just-starting-out generation, tight credit and requuements for substantial down payments will continue to be barriers to home ownership. And even when they have incomes sufficient to invest, continumg volatility in the overall economy wiU dissuade thera from putting their money into something they can't pick up and take with them if they have to chase better jobs elsewhere. So here's what we have: A giganto demographic push towards flexible, close-in living; a demand for affordability on a broad scale; and an increasing desire for rental options. What this suggests for municipalities and private developers is an opportunity with a challenge. Obviously, there's a chance now to expand housmg choices in places people want to live and to achieve all the advantages that come wi& appropriate density. More diversity. Better options for aging in place. Increased economic vitality via the hanging-out effect. http://bettercities.net/news-opimon^loes/ben-h^nwn/^ 7S1 ^/drMm.Ji niYI_hr»nriia_T»oiir A'> /I ci'^n-fs Dream home for the new era: Compact, connected & mortgage-free | Better! Cities & To... Page 4 of 5 The problem is, outside of big city downtowns, where demand for rentals has always been high, the design and consti-uction of apartments, town houses and other rental models haven't consistently measured up to the range and standards of single-family, for sale residences. In too many places, "for rent" and "affordable" have become code words for subsidized government housing or cheaply built complexes likely to be opposed by neighbors worried about their property values or the increased traffic congestion. There's a stigma to overcome. The sure way to aggravate in-town neighborhood fears is to import suburban multifamily designs that assume no one can live without a parking space outside their door. Or relate to human beings who are not fellow occupants of their rented space. The ideal approach would be to produce neighborhood- appropriate rental choices that are impossible to tell from for-sale dwellings. Historic in-town neighborhoods provide the best models. True townhouses. Appropriately scaled stacked flats. And, of course, single-family detached homes that toggle between owner-occupied and rented depending upon market conditions and owner preferences. That latter approach is getting a significant try-out ~ and plenty of kudos - in Ocean Springs, MS. The evolution of Katrina Cottage clusters into rental nei^borhoods is in full swing. Last week, there was § eiebration of LEED Platinum certification of one ofthe homes in the Cottages at Oak Park. Designed from the beginning as rentals, the 29 homes are on two-plus acres within walldng and biking distance of everything in the historic waterfront town. Construction was complete in August of last year. And just about every cottage was leased within 60 days. Ben Brown is principal director of client public relations with Placemakers, aplanning, coding, marketing, and implementationfirm. This article was also published on PlaceShakpr^ and NPAmMnk^v^ For more in-depth coverage on this topic: • Sa&Sfidfefito Better! Cities & Towns to read aU ofthe articles (print+online) on implementation of greener, stronger, cities and towns. • See the iSmmMXrE^UMiyLMim issue of Better! Cities & Towns. Topics: Value capture and transit, Social networks aid downtown. Live smaller. Rentals are market key, Streetcar inspiration, Box building. Civilizing suburbs, Alley houses, Sprawl repair, Healthy communities, Funding for infrastructure, Chicago River reversal • Get ]v?ew Ur^anismLlfeSt: Practices GjjMg, packed with more than 800 informative photos, plans, tables, and other illustrations, this book is the best single guide to implementing better cities and towns' • See the Jm^^W issue of New Urban News. Mid-rise living, elevated walkways, Jane Jacobs and observational urbanism, Affordable transit-oriented development, the commg housing calamity, rental and TOD to dominate maricet, NewTown in bankruptcy, regional approach for high-speed rail, tlie civic costs of sprawl, redevelopment of mall CITY OF CARLSBAD COUNCIL POLICY STATEMENT General Subject: Specific Subject: Proposition E "Excess Dwelling" Unit Bank Established Policy for Number And Allocation of Proposition E "Excess" Dwelling Units Policy No. Date Issued Effective Date Cancellation Date Supersedes No. Attachment C 43 4/26/05 4/26/Q5 43. 12/l7/n9 Copies to: City Council. City l\4anager, City Attomey, Department Heads and Division Heads Employee Bulletin Boards, Press, File ' PURPOSE: unltf wNrf ^^^^^^^ If """^^^^ criteria for allocation of "excess" dwellinq EXCESS DWt'LLING UNITS Dwelling units that become "excess" shall be added to the then-existing citywide balance fexcess dwellina unif STATEMENT OF PQLICY allocation of excess units, a project shall possess one or more ofthe followingcteracierisfe: ^ ^ ^' deStnul I'aw.""^' ' ' '^"'^ """"^ P"^'"'"' ^"^Pli^^^^ «lth state Housing units made affordable to lower or moderate income households Senior citizen housing. Hoi^sing looated in the Village Redevelopment Area or the South Carisbad Coastal Redevelopment Transft-oriented, "smart growth" development projects where increased residential densitv is beino ser^ces" '° ^^^y^"' opportunities anZmSl suppo^ 'JttS7^::^.^;^tZ.'^'''' non-residentlal to residen«al or projects containing a mix The property lias a Generai Plan designation of Residentiai Low Density (RL) or Residential Low^ Medium Densrty RLM) and the base zone of the property would pennit a sllghMy h^^Sof unte ^.Z*^^ ^ ^ P'an designafion; providTC prS deS 2. 3. 4. 5. 6. 7. CITYOFCARLSBAD COUNCIL POLICY STATEMENT Page 2 of 2 Policy No. 43 CITYOFCARLSBAD COUNCIL POLICY STATEMENT Date Issued 4/26/05 CITYOFCARLSBAD COUNCIL POLICY STATEMENT Effective Date 4/26/05 CITYOFCARLSBAD COUNCIL POLICY STATEMENT Cancellation Date CITYOFCARLSBAD COUNCIL POLICY STATEMENT Supersedes No. 43. 12/17/02 General Subject: Proposition E "Excess Dwelling" Unit Bank Specific Subject: Established Policy for Number And Allocation of Proposition E "Excess" Dwelling Units Copies to: City Council. City Manager. City Attomey, Department Heads and Division Heads. Employee Bulletin Boards, Press, File 8. The growth management control point (GMCP) density for the property results In a unit yield that includes a fractional unit of .5 or greater. In this circumstance, a fraction of a unit may be granted in order to achieve, but not to exceed, the next whole unit; provided, the maximum density of the applicabie Generai Plan land use designation is not exceeded. The number of excess units allocated to a particular "qualifying" project shall be at the sole discretion of the City Council, Planning Commission or Planning Director as appropriate and shall be based on the Importance of the characteristic possessed by the projects or, where a project possesses multiple characteristics, the number and importance of the characteristics. In approving a request for allocation of excess dwelling units, the City Council shall consider the location of the requesting project and the compatibility of increased density with existing adjacent residential neighborhoods in accordance with the applicable principles of the General Pian. HISTORY: Action Date Summarv Originally Adopted February 2,1990 Established a formal policy for the allocation of "excess" dweiling units under the dwelling unit limitations of Proposition E. Amended April 22,1997 Refined the priority list of proiects that qualify for an excess dwelling unit allocation. Amended December 17,2002 Established the number of available excess dwelling units at a balance of 2800 units (this was a reduction to the number of units In excess dwellinq unit bank). Amended December 17,2002 Eliminated the individual city-quadrant dwelling unit bank balances, and Instead established a citywide excess dwelling unit bank. Amended December 17,2002 Revised the list of projects that qualify for an excess dwelling unit allocation, including the elimination of the "priority" system. Amended Modified list of projects that qualify for an excess dwelling unit allocation, Including the addition of a provision to allow projects to round up above the growth management control point by a fraction of a unit. 6 Attachment D General Plan Polfcy Framework on Locating Higher Density, Mixed Use and Affordable Housing • Land Use Element Residential Goal, Objectives and Policies o Goal • A.1: A City which provides for a variety of housmg types and density ranges to meet the diverse economic and social requirements of residents, yet still ensures a cohesive urban form with careful regard for compatibility while retaining the present predominance of single family residences. o Objectives • B.l: To achieve a variety of safe, attractive housing In all economic ranges throughout the City. • B.3: To offer safe, attractive residential areas with a wide range of housing types, styles and price levels in a variety of locations. o Policies C2: Allow density increases, above the maximum residential densities permitted by the Genera! Plan, to enable the development of lower-Income affordable housing through the processing of a site deveiopment plan. Any site development plan application request to increase residential densities (either above the Growth Management Controi Point or upper end of the residential density range{s)) for purposes of providing lower-Income affordable housing, shall be evaluated relative to: (a) the proposal's compatibility with adjacent land uses; (b) the adequacy of public facilities; and (c) the project site being located in proximity to a minimum of one of the following: a freeway or major roadway, a commercial center employment opportunities, a city park or open space, or a commuter rail or transit center. C4: Limit medium and higher density residential developments to those areas where they are compatible with the adjacent land uses, and where adequate and convenient commercial services and public support systems such as streets, parking, parks, schools and utilities are, or will be, adequate to serve them. C.5: Locate multi-family uses near commercial centers, employment centers, and major transportation corridors. C.7: Locate higher density residential uses in close proximity to open space, community facilities, and other amenities. C8: Consider high and medium high density residential areas only where existing or proposed public facilities can accommodate the increased population. Attachment D Page 2 • CIO: Encourage a variety of residential accommodations and amenities in commercial areas to Increase the advantages of "close in" living and convenient shopping. • C15: Consider residential development, which houses employees of businesses located in the PM zone, when it can be designed to be a compatible use as an integral part of an industrial park. • Housing Element Residential Goal, Objectives and Policies o Goals • 2: New housing developed with diversity of types, prices, tenures, densities, and locations, and in sufficient quantity to meet the demand of anticipated City and regional growth. • 3: Sufficient new, affordable housing opportunities in all quadrants of the City to meet the needs of current lower and moderate income households and those with special needs, and a fair share proportion of future lower and moderate income households. o Policies • 2.1: Ensure sufficient developable acreage in all residential densities to provide varied housing types for households in all economic segments. • 2.2: Allow development of sufficient new housing to meet Carlsbad's share of the regional housing need for 2005-2010 as determined by SANDAG and consistent with this Housing Element. • 2.5: Provide alternative housing environments by encouraging adaptive reuse of older commercial or industrial buildings. • 2.6: Encourage increased integration of housing with nonresidential development where appropriate. • 3.3: Accommodate General Plan Amendments to increase residential densities on all PC and LC zoned properties and ali other residentially designated properties to facilitate the development of affordable housing. Any proposed General Plan Amendment request to increase site densities for purposes of providing affordable housing, will be evaluated relative to the proposal's compatibility with adjacent land uses and proximity to employment opportunities, urban services or major roads. These General Plan Land Use designation changes will enable up to 23 dwelling units per acre, and, in conjunction with the City's Density Bonus Ordinance could potentially Increase the density by 35 percent. Through the City's Affordable Housing Program (i.e., the Inclusionary Housing Ordinance), density increases in excess of 35 percent may also be realized. Attachment E Current (2005-2012) Housing Element Programs to meet RHNA 2.1 2.1 Redesignate land to RMH and/or RH to minimum 12 or 20 units/acre ^Excludes **Quarry necessary Raise minimum densities to 12 (RMH) or20(RH) units/acre Raise minimum densities to 18 or 28 units/acre in the Village Permit by right residentiai above the first fioor of commercial uses in commercial zones at min. 20 units/acre Quarry Creek, Ponto, Barrio AH properties designated RMH and RH Action Completion Date (perthe program).* February 2013 September 2012 In process Approved, pending Coastal Commission Coastal Commission approvals, if necessary Creek land use actions are identified in Program 2.1 but are developer-initiated All to complete tiie actions of program 2.1 and 2.3 are city-initiated other actions 03/20/2012 Housing Issues Scott Donnell March 20, 2012 Discussion Overview Four Parts: - Background and Trends - Envision Carlsbad and Land Use Conversions - Housing Policy Framework - Inclusionary Housing and Excess Dwelling Unit Bank Q&A 03/20/2012 Background & Trends Part One Part One - Background & Trends Recent Development (past 10 years) 1,600 Residential and Non-residential Development 1,400 ..,«£!1Z \ .^..."..y 1,200 S 1,000 c J 800 ^^^zzziiiV:^^^^ _AI: / / \ \ Residential (d.u.'s) '««• Non-residential (000 s.f.) E a! 600 / \ \ ... / t \ \ Ji A . 400 200 2002 2003 2004 2005 2006 2007 2008 CalendarYear 2009 2010 2011 03/20/2012 Part One - Bacl<ground & Trends • Current market conditions - Active projects - Approved projects - Pending projects • Build-out status - 80 to 85% built Part One - Bacl<ground & Trends Demographic Trends - Slower growth -Older - Wealthier 03/20/2012 Part One - Background & Trends Land Use Trends - Single-family predominates - IVIulti-family increases - Non-residential uses grow - IVIore jobs than working-age residents 03/20/2012 Envision Carlsbad & Land Use Conversions Part Two Part Two - Envision Carlsbad • Shaping the city's future — Carlsbad Community Vision • Accomplishing the vision/accommodating growth 03/20/2012 Part Two - Envision Carlsbad Three land use concepts - Centers - Active Waterfront - Core Focus Part Two - Envision Carlsbad 2012 review ofthe land use concepts - Community review: Jan/Feb - ECS and Planning Commission: IVIar/April - City Council: June • Presentation of draft preferred plan 03/20/2012 Part Two - Land Use Conversions Current, active interest Points to consider - Public participation and expectations - Excess Dwelling Unit Bank - General Plan - Other 03/20/2012 Housing Policy Framework Part Three Part Three - Housing Policy Framework: Locating Housing Land Use Element - Throughout Carlsbad - Retain SFD predominance - Close to services, employment, recreation - Served by adequate facilities 03/20/2012 Part Three - Housing Policy Framework: Locating Housing Housing Element - Provide housing for all economic segments - Specific locations targeted Part Three - Housing Policy Framework: Higher Density Housing Summary and Policy Considerations - Existing framework adequate - Other considerations - General Plan Update 03/20/2012 Part Three - Housing Policy Framework: Housing Elements Current Housing Element Housing Element Update RHNA (Regional Housing Needs Assessment) Part Three - Housing Policy Framework: Housing Elements RHNA (for 2013-2020 housing cycle) - Total need for 2013-2020: 4,999 units - Lower and moderate income need: 2,667 units - Entire need addressed in 2013 element 10 03/20/2012 Part Three - Housing Policy Framework: Housing Elements Certification benefits 11 03/20/2012 Inclusionary Housing & Excess Dwelling Unit Bank Part Four Part Four - Inclusionary Housing • Affordable Housing • Inclusionary Requirements and recent case law - Rentals vs. ownership 12 03/20/2012 Part Four - Inclusionary Housing Impacts to Carlsbad - Rental housing - Density vs. affordability - Providing vs. production Part Four - Inclusionary Housing Summary and Policy Considerations - Bank withdrawals an incentive - Housing Impact Fee 13 03/20/2012 Part Four - Excess Dwelling Unit Bank Purpose and need 2002 reduction Policy 43 - withdrawals and deposits Growth Management Control Point (GMCP) Current bank balance: 3,002 units Part Four - Excess Dwelling Unit Bank Dwelling unit caps: - Per Proposition E: 54,599 units - After 2002 reduction: 51,905 units Existing dwelling units: 45,185 units 83% or 87% of build-out 14 03/20/2012 Part Four - Excess Dwelling Unit Bank Current Housing Element Programs - Need for most existing bank units General Plan Update - Need for all existing bank units -Need for additional units Proposition E caps maintained Part Four - Excess Dwelling Unit Bank Summary and Policy Considerations - Policy 43 mandate and discretion -Withdrawal limits for affordable housing — Benefits 15 03/20/2012 Summary Discussion • General Plan Policy Framework • Inclusionary Requirements and case law • Excess Dwelling Unit Bank - need and purpose 16 <^ CITY OF >^ CARLSBAD CONFIDENTIAL A TTORNEY CLIENT PRIVILEGE March 14, 2012 To: MAYOR AND CITY COUNCIL From: CITY ATTORNEY Re: HOUSING ISSUES AGENDA ITEM ON MARCH 20.2012 WORKSHOP Attached is an article and previous memoranda from our office explaining the critical legal impacts and importance of having a certified Housing Element, The Importance of Housing Element Certification (March 24, 2009) City of Pleasanton's Growth Management Ordinance (June 30, 2009) Growth Management Plan, City of Pleasanton (March 24, 2010) Palmer/Sixth Street Properties, LP. v. City of Los Angeles (August 25, 2009) Palmer/Sixth Street Properties, LP. v. City of Los Angeles (March 15, 2010) Decision Overturning the City of Patterson's Affordable Housing Fee (December 4, 2009) Honchariw v. County of Stanislaus ''Anti-Nimby Law'' (December 7,2011) Please review these documents prior to the March 20**^ workshop to refresh your understanding of the pertinent legal concepts. Should you have any questions regarding the aboysr^ilease do not hesitate to contact me RONALD R. BALL City Attorney /rn Attachment c: City Manager Community 8t Economic Development Director Planning Director Housing & Neighborhood Services Director Senior Planner, Scott Donnell Principal Planner, David de Cordova City Attorney 1200 Carlsbad Village Drive | Carlsbad, CA 92008 I 760-434-2891 | 760-434-8367 fax I www.carlsbadca.gov The Importance of Housing Element Certification March 24th, 2009 What Happens If a Junsdiction Does Not Adopt a Housing Element or the Element Does Not Comply with State Law? If the California Department of Housing and Community Development determines that a Housing Element fails to substantially comply with the State's Housing Element Law, there are potentially serious consequences that extend beyond the realm of residential land use planning. When a jurisdiction's Housing Element is found to be out of compliance, its General Plan is at risk of being deemed inadequate, and therefore invalid. Because there must be fmdings of general plan consistency in most planning and development decisions, a local government may run the risk of approving projects based on a noncompliant General Plan (see item #2 below). If a jurisdicdon is sued over an inadequate General Plan the court may impose requirements for land use decisions until the jurisdiction brings its General Plan—^including its Housing Element—^into compliance with State law. A Housing Element is considered out of compliance with State law if one of the following applies: 1. It has not been revised and updated by the statutory deadline, or 2. Its contents do not substantially comply with the statutory requirements. If a Housing Element is certified, there is a presumption that it is adequate, and a plaintiff must present an argument showing that it is in fact inadequate. Over the years, California has steadily increased the penalties for not having a legally compliant Housing Element, and this trend is expected to continue. Repercussions include: 1. Limited access to State Funding, Both the CaHfornia Infrastructure and Economic Deveiopment Bank (CIEDB) and thc Bay Area's Metropolitan Transportation Commission (MTG) award funds based on competitions that take into consideration the approval status of a community's Housing Element. See the list below for specific programs. 2. Lawsuits. Developers and advocates have the right to sue jurisdictions if their Housing Element is not compliant with State Law. Recent Bay Area cities diat were successfully sued include Corte Madera, Pittsburg, Pleasanton, Alameda, Benecia, Fremont, Rohnert Park, Berkeley, Napa County, and Santa Rosa. According to a memo from the Santa Barbara County Council, there has never been a city that has successfully argued that they do not Page 20 |4 IWarln Countywide Housing Element Workbook The Importance of Housing Element Certification need to comply with Housing Element iaw Ouly 2007, Housing Element Law: Mandates and Risks of Defiance). There are several potential consequences of being sued, including: a. Mandatory compliance - The court must order the commumty to bring the Element into compliance within 120 days. b. Suspension of local control on building matters - The court may suspend the locality's autiiority to issue building permits or grant zoning changes, variances or subdivision map approvals. c. Court approval of housing developments - The court may step in and approve housing projects, including large projects that may not be wanted by the local community. d. Fees - If a jurisdiction faces a court action stemming from its lack of compliance and eitiier loses or sctdes tiie case, it often must pay substantial attorney fees to the plaintiffs attorneys in addition to tiie fees paid to its own attorneys. These fees can easily exceed $100,000. Case Studies The following case smdies show tiie potential consequences of not having an adequate Housing Element. Few jurisdictions take die position tiiat tiiey do not need to comply witii Housing Element law, as tiiis strategy has never worked in court. The irony is that after spending large amounts of time and money defending tiieir position, most jurisdictions diat lose in court (or make an agreement to avoid going before a judge) end up witii a plan tiiat tiiey can live with. A legaUy adequate Housing Element does not compromise their identity or character; in contirast it often makes tiieir community more inclusive and stronger. In a number of cases, like Corte Madera and Napa, tiie housing plans ended up winning national awards and being a point of pride. The following case studies are taken from a report prepared by the Santa Barbara County Council (July 2007, Housing Element Law: Mandates and Risks of DeHance) or from conversations with tiie California Affordable Housing Law Projects, unless otiierwise specified. Town of Cbrte Madera - The Town did not have a State certified Housing Element and was sued by advocates. The suit was settied once Corte Madera agreed to impose a fee on all commercial development to provide money for an affordable housing trust fund. It also created tiiree new zoning distiicts tiiat eitiier required affordable housing or offered incentives for affordable units. One of tiiese districts allows mixed use and triples the aUowable residential density and tiie commercial Floor Area Ratio for developments where half tiie units are affordable. AdditionaUy, tiie Town agreed to simplify procedures and waive niany fees for affordable housing developers. The Housing Element was updated and certified by HCD under close scrutiny by the plaintiff. In tiie end, die Town had to pay approximately $100,000 for tiie plaintiffs attorney fees as weU as tiie costs for their own attorneys. IVlarch 24th, 2009 Page 21 IWarin Countywide Housing Element Workbook The Importance of Housing Element Certification County of Madera - The County of Madera argued tiiat Housing Element law was iUegal and die County did not need to comply. The County attorney described this approach as providing a "slam dunk" to die plaintiffs. The Court ordered tiie County to pay 3150,000 for the plaintiffs attorney fees. County of Sorioma - In 1998, an affordable housing advocacy group sued Sonoma County because its Housing Element did not adequately address the needs of low income residents. The County agreed to pass an inclusionary housing ordinance, build a homeless center, and add a jobs/housing linkage fee on commercial development. The Court ordered a moratorium on aU new development until a certified Housing Element was adopted, and ordered the Counly to pay over $300,000 in legal fees. Cily of Santa Rosa - Santa Rosa had a track record of producing almost no affordable housing, and was sued by advocates. In tiie end, Santa Rosa agreed to aUow higher density affordable housing developments without a conditional use permit, to identify a site for a homeless shelter and provide financial assistance, to establish an affordable housing tirust fund, to provide more farm woricer housing, and to impose an affordable housing fee on commercial and industrial development. The City had to pay $28,000 for die plaintiffs legal fees. County of Santa Cruz - The County proposed meeting aU of its need for low income housing through second units. A consortium of groups sued in the mid-1990s and again in 2004, and after many legal batties the County lost. The County was ordered to rezone 30 acres of land and devote $15 milHon to support development of low income housing. (Source: MetiroActive SantaCruz, Dec 20-27, 2006, http: / /www.meti-oacrive.com /meti:o-santa-cfuz/l2.2Q.Q6/nu?.- 0651-.htinn City of Benecia - Benecia inaccurately ideotified sites as being avaUable for development. They were sued and lost. In tiie end, after several appeals, the City spent more tiian $500,000 in attorney fees and eventuaUy was forced to comply. Two major pieces of the agreement included an inclusionary zoning ordinance and setting aside land for affordable housing. County of Napa - The County of Napa submitted a draft Housing Element to HCD in 2001, but did not make changes to die document to make it compUant with State law, which led to lawsuits. The Court ordered a moratorium on new developments and that the County pay the plaiiitiff s legal fees. EventiiaUy, tiie County agreed to rezone some sites, better supply affordable low income housing and farm worker housing, and develop a way for neighboring cities to accept some of its fair share number. FoUowing a review of land capacity by the cities of Napa and American Canyon, an agreement was developed between the County and the cities, transferring some of the housing need numbers. (Note: Under State law counties are aUowed to tiransfer a portion of tiieir RHNA.) As part of tiie agreement, tiie County paid for improvements in the dties of Napa and American Canyon costing mUUons of doUars and agreed to other concessions. The fees awarded to tiie plaintiffs attorney's totaled over $238,000. (Source: HUlary Gitelman, Napa County Planning Department) March 24th, 2009 Page 22 Marin Countywide Housing Element Workbook The Importance of Housing Element Certification City of Folsom - In 2001, the City of Folsom was sued by housing advocacy groups. They agreed to rezone 120 acres for multifamUy housing, adopt an inclusionary zoning ordinance, create an affordable housing trust fund, donate land for affordable housing, change the zoning to aUow for emergency shelters by right, and direct more money from tiieir redevelopment authority to housing. Attorney fees totaled over $58,000. Access to Funding with a Certified Housing Element Housing Elements have been mandatory portions of local general plans in CaHfornia since 1969. This reflects the statutory recognition that the avaUabiUty of housing is a matter of statewide importance, and cooperation between government and the private sector is critical to attainment ofthe State's housing goals. To incentivize and reward local governments that have adopted compUant and effective Housing Elements, several housing, community development and infrastructure funding programs include Housing Element compUance as a rating and ranking or threshold requirement Housing Element compUance is generaUy included as a set of rating and ranking criteria in programs where die primary appHcants are local governments. As eUgible appUcants vary by program (e.g., only non-entitiement jurisdictions eUgible for State CDBG or HOME programs), not aU jurisdictions are affected by these programmatic requirements. The effect or significance of the Housing Element factor within the context of other competitive factors varies by program. Some of the programs tiiat consider Housing Element certification in their criteria are: BuUding Equity and Growth in Neighborhoods (BEGIN) Program Commutiity Development Block Grants (CDBG) HOME Investinent Partnerships Program (HOME) Housing Enabled by Local Partnerships (HELP) Program, CaUfornia Housing Finance Agency InfUl Incentive Grant (JIG) Program Infrastructijre State Revolving Fund (ISRF) Program, California Infrastructure and Economic Development Bank (I-Bank) Single FamUy Home Program Workforce Housing Reward (WFH) Program (no current funding available) Resources The best source of additional information is a memo written by Santa Barbara's legal councU in 2007, Housing Element Law: Mandates and Risks of Defiance, located on the Marin Housing Workbook website in the documents/resources and facts sheets/reports folder. Another source of information that offers insight in the advocacy community's interpretation of tiie law is CaUfornia Housing Law Element Manual, CaHfornia PubHc Interest Law Project, AprU, 2008. An authoritative book on the subject is CaHfornia Housing Element Law: The Issue of Local NoncompUance. by Paul Lewis (2003, PubUc PoHcy Institute of CaUfornia). Jurisdictions are also encouraged to review the relevant CaHfornia State Law. avaUable on HCD's website, and talk to their staff attorneys. March 24th, 2009 Page 23 P CONFIDENTIAL ATTORN EY-CUENT PRIVILEGE June 30,2009 TO: MAYOR AND CITY COUNCIL ^ FROM: CITY ATTORNEY RE: PLEASANTON'S GROWTH MANAGEMENT ORDINANCE The City of Pleasanton has a growth management ordinance siniHar to Carlsbad's in that it contains a build-out limitation of 29,000 residential units. It aiso contains an annual restriction of residential buiiding permits to 750. It Is a general law city. It has not been able to meet its "fair-share" housing numbers in the past and now cannot meet them In the future since to do so would violate Its Growth Management Plan and its policies and procedures. The build-out limitation (referred to as a building "cap") was adopted by the voters of the City of Pleasanton in 1996 and cannot be amended except by another vote unless the Attorney General has his way. The City of Pleasanton has been sued by the Attorney General (AG) claiming that Pleasanton's growth cap and annual limitation violate state law and that Pleasanton can no longer enforce it. It has asked the court to declare that Pleasanton's growth controls cannot be enforced and, as a consequence, no vote of the citizens is necessary. I discussed this with Pleasanton's City Attorney who told me If the city loses it will return to the voters for direction. This is an extremely important case and we wiil monitor it. It will not become the law of this State unless appealed and on its face this decision does not apply to charter cities. That will require another case and a different argument by the AG. In a charter city case the AG must prove that a city's growth management of its residential future is not a local affair. Please let me know if you have any questionsifigarding the above. RONALD R. BALL City Attorney rn c: City Manager Planning Director Assistant City Attorney Jane Mobaldi CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE March 24, 2010 TO: MAYOR AND CITYCOUNCIL FROM: CITY ATTORNEY RE: GROWTH MANAGEMENT PLAN As you know, we have been following the events In the City of Pleasanton regarding the challenge to its Growth Management Plan, its plan was adopted by the voters In 1996 and reaffirmed by the voters in 2008. Under that plan, the city had an annual limitation on residential building permits and a total maximum number of housing units at 29,000 from 1996 forward. The only exception permitted by the Growth Management Plan was that it could be amended but onty by a vote of the people. In 2003, the City of Pleasanton adopted its current Housing Element and acknowiedged in it that it would be short ofthe number required to meet its fair-share housing numbers. It planned to study other vacant land within the city within one year of the adoption of its Housing Element Jt did not do so. The city council did, however, adopt an ordinance about a month before the Tltigation, which will be explained below, was commenced re-zoning one portion of the city in order to increa:SE its numbers. The city was then sued by a housing advocacy group and was then joined by the Attorney General. (Urban Habitat Proaram and Sandra De Greaorio and People ofthe State ofCalifornio, ex rel. Edmund G. Brown, Jr., Attornev General v. Gtv of Pleasanton and the City Council of the Citv Pleasanton, Alameda Superior Court Case No RG06-293831). The thrust of the lawsuit was to invalidate the housing cap placed on the number of residential units by the voters ofthe City of Pleasanton. The Regional Housing Needs Assessment (RHNA) numbers relating to the first element from 1999 to 2007 was 5,059 and that number was followed up with an additional 3,277 housing units for the Housing Element period from 2007-2014. The City of Pleasanton could not accommodate these numbers. After briefings and arguments by counsel, the trial court issued its opinion which was not good news for city. The court invalidated the voter approved housing cap and invalidated the portion of the General Plan which codified the voters decision and then when on to issue its remedy which prohibits the city council and the City of Pleasanton from enforcing any of Its General Plan provisions limiting the number of housing units In Pleasanton, ordered the city council to remove all provisions referring to the growth cap from any of the city's planning documents, rdered the city to implement zoning changes to accommodate the un-met housing numbers for ^^**rhe 1999-2007 planning period and that the zoning and land use changes must be such that they are without condition or in need of further discretionary approvaL Pending these corrections, the court ordered the city to cease issuing non-residential building permits and all related building permits until the city brings its General Plan into conformance with the requirements of : ( state law. Such a severe remedy almost guarantees an appeal and I have a call into the city '^•^ttorney to find out if this will happen. The reason the judge struck down this city's housing caps is that he felt the city's local law was clearly preempted by the state law. The judge was not required to address the constitutional powers and duties of a charter city such as CaHsbad. This case does not resolve that issue. However, the judge's harsh remedies against Pleasanton reveal the power of the court to interfere with local land use decisions. This issue may not arise in Carlsbad for a long time. The planners have indicated that the City of CaHsbad has enough vacant land and enough housing units left In the "dwelling unit bank" to meet our housing obligations for the foreseeable future. Nonetheless, our Housing Element is being challenged on both environmental and planning grounds. (Fnends of Aviara v. Citv ofCarlsbad. Vista Superior Court Case No.37-2010-00050553- CU-TT-NC). In this challenge petitioners claim that enough environmental studies were not undertaken but concede that the individuai projects which they may not desire In their neighborhood wilt receive full environmental review. This will be a difficult position for them to sustain. As to the planning issues, petitioners argue that our General Plan was internally inconsistent since the Housing Element was amended first, before the Land Use Element was amended, and both should have been amended simultaneously. The problem for them is that our Land Use Element contemplates allowance for affordable housing developments and contemplates that when such developments are proposed it will be required to apply for General Plan and zoning amendments. Therefore, this lawsuit is really the flip-side of ^leasanton's lawsuit. I intend to ask the Attorney General if he would be willing to Intervene on oehalf of,the City in support of our Housing Element. If he can spend the state's, resources challenging a .city's Housing Element he should be able to spend money to defend a city's Housing Element when it is in concert with the state's laws, policies and objectives. Since it is so important, 1 have attached a copy of the judge's ruling in the City of Pleasanton's case. I believe it will be appealed and 1 wiil let you know when that happens. In the meantlnie, should you have questions regarding the above, please do not hesitate to contact me. RONALD R. BALL City Attorney /rn Enclosure ^*^: City Manager Community and Economic Development Director Planning Director Senior Planner, Scott Donnell '7845207' FILED ALAMEDA COUNTY MAR 1 2 2010 CIERK OFTHE SUPERIOR COUBT SUPERIOR COURT OF THE STATE OF CALIFORNIA IN AND FOR THE COUNTY OF ALAJMEDA •URBAN HABITAT PROGRAM-AND SANDRA DE GREGORIO, Petitioners & Plaintiffs, PEOPLE OF THE STATE OF CALIFORNIA, ex rel. EDMUND G. BROWN, JR., ATTORNEY GENERAL, et al., Plaintiff-Iritervenor, V. CITY OF PLEASANTON, A MUNICIPAL CORPORATION AND THE CITY COUNCIL OF PLEASANTON Respondents & Defendants. Caseno.RG06-293831 ORDER GRANTING PETITION FOR WRIT OF MANDATE The hearing on the First Amended Verified Petition of Petitioners and • Plaintiffs Urban Habitat Program and Sandra De Gregorio (collectively. "Petitioners") for Writ of Mandate came regularly before the court-on Pecember 18, 2009, Judge Frank Roesch presiding. Appearing for the Petitioners were Richard Marcantonio, Esq. of Public Advocates, Inc., Michael Rawson, Esq. ofCalifornia Affordable Housing Project, and Christopher Moody, Esq. of Paul^ Hastings, Janofsky & Walker LLP. Appearing for the Respondents were Thomas Brown, Esq. and Adam Hofinann, Esq. of Hansen Bridgett LLC and Michael Roush, Esq., Interim City Attomey. Appearing for Intervener was Clifford Rechtschaffen, Esq. ofthe Office ofthe Attorney General. The matter was argued and submitted. The court has carefully considerea the papers and pleadings filed herein and has considered the argument of counsel. Good cause appearing therefore, the court HEREBY GRANTS the Petition for Writ of Mandate. The reasoning ^' • follows. BACKGROUNB This lawsuit concems allegations relatmg to Respondent's city planning process, and the adequacy or inadequacy of its planning documents. Policy 15 ofthe Land Use Element ofthe City's 1996 General Plan and Policies 24 et seq, of the Land Use Element ofthe City's.2005 general plan codify measure GG, a housing cap. Measure GG was an initiative measure passed by the voters in 1996. It (and the Land Use Element's policy codifications/restrict and place limits on the Pleasanton City.Council and City government, prohibiting them from permitting the construction of more than 29,000 housing units from 1996 until the end of time. The only exception permitted by the Measure is that it may be amended, but only by a vote of the people.' It is the continuing validity ofthis housing cap that is one of the subjects of this action. Pleasanton Municipal Code Chapter 17.36, entitled Growth Management Program, includes section 17.36.060, which places annual limits on building pennits for the construction of new housing units. This provision ofthe Pleasanton Municipai Code was modified about a month and a half before the hearing ofthe present Petition to allow an exception to the inaximum number of building permits rule allowing an increase to the maximum amount, but only ifthe City is obligated to do so in order to meet its Regional Housing Needs'Allocation ("RHNA"). In 2003 the City of Pleasanton adopted its cunrent Housing Element ofthe General Plan. Within that plan was an acknowledgment that "the amount of units projected from [all.of] the City's residentially owned land wouid be short ofthe number required require to meet the city's aggregate share of regional needs...." (Housing Element, p. 35.) Also in that Housing Element is apian to study (within ^ The measure was amended by Measures PP and QQ in 2008 by public vote. Those measures reaffumed the 29,000 units housing cap, reaffirmed that the City Council had no discretion to allow any waiver to the housing cap, and excluded in-law units and extended-stay motel rooms from the housing cap. * ^llllll'"' one year of 2003) which other vacant land in this City ought be rezoned to "residential" to accomplish the City's obligation to accommodate its RHNA. The City did not conduct its study within that year and has not yet completed a complete land-use change/zoning change necessary for it to accommodate the shortfall of RHNA existing in 2003. The City Council did, a montii and a half before the hearing on the present Petition, pass Pleasanton Ordinance 1998 approving the rezoning of a portion of the land located in the "Hacienda Business Park." However, a careful reading of the ordinance discloses that the status quo was not changed. The ordinance requires that the approval ofany development plan for residential development "shall not be granted until the completion ofa PUD Major Modification for the entire Hacienda Business Park." This is a process that could take up a period of time ranging from one year to forever. Local govemments such as the City of Pleasanton are delegated the authority over land-use decisions and planning within their borders, and "have a responsibility to use the powers vested in them to facilitate" new housihg construction that "make(s) adequate provision for the housing needs of all economic segments ofthe community." (Govt. Code § 65580, subd. (d).) The scope of that responsibility is spelled out in detail in the Housing Element Law. (Govt, Code §§ 65580-65589.8.) It-was the intent ofthe Legislature by the enactment ofthe Housing Element Law to assure that counties and "cities recognize their responsibilities in contributing to the attainment of the state housing, goal, and to assure that counties and cities will prepare and implement housing elements which, along with federal and state programs, will move toward attainment ofthe state housing goal. (Govt, Code § 65581.) In order to attain state housing goals, the Legislature prescribed that cities, including Pleasanton, maintain an inventory of land available for residential development (see Govt Code § 65583.2), and that cities must make available for residential development sufficient suitable land to accommodate its share of regional housing needs. (See, e.g.. Govt. Code § 65584.) Existing and projected regional housing needs are determined in the manner detailed in Govemment Code secfions 65584.01 and 65584.02, and those regional needs are allocated within the various regions ofthe State by the council of local govemments in each respective region. (See Govt. Code §§ 65584,04,65584,05 and 65584.06.) Here that council of govemments is the Association of Bay Area Govemments (AB AG). A city's obligations under the Housing Element Law require it to implement programs to zone or rezone land to establish adequate sites to accommodate its Regional Housing Needs Allocation (RHNA) and must timely adopt a housing element with an inventory of sites which can accommodate a city's share ofthe regional housing need. (See, e.g., Govt. Code §§ 65583, 65584.09, and 65588.) The RHNA allocated by ABAG to the City of Pleasanton in 2001 relating to the 1999-2007 planning period is 5,059 units of housing. The RHNX allocated by ABAG to the city of Pleasanton in 2007 relating to the 2007-2014 planning period is an additional 3277 housing units. THE HOUSING CAP There is a difference of opinion regarding the number of housing units built since the imposition of the housing cap, but the difference is not material. The parties do not disagree that the number of units allowable under the Measure GG housing cap is less than the City's RHNA obligation. It is self-evident that the City cannot comply with the State statue requiring the City to accommodate its RHNA when the city is not permitted by its local law, Measure GG, to allow the number of housing units to be built that would satisfy theRHNA.. The question of which law prevails is elementary. State law preempts whenever local laws contradict state law. (See Cal. Const, article XI, § 7.) The Supreme Court has stated it succinctly : "The general principles governing state statutory preemption of local land use regulation are well settled," "The-Legislature has specified certain minimum standards for local zoning regulations (Govt. Code §65850 et Seq.)" even though it also "has carefuiiy expressed its intent to retain the maxknum degree of local control (see, e.g., id., §§ 65800, 65802)." {IT Corp. v, Solano Comty Bd. of Supervisors (1991) 1 Cal.4"' 81, 89.) "A county or city may make and enforce within its Hmits all local police, sanitary, and other ordinances and regulations not in conflict with general laws.'' (Cal, Const,, art. XI, § 7, .italics added.) "Local legislation in conflict with general law is void. Conflicts exist if the ordinance duplicates [citations], contradicts [citation], or enters in an area fully occupied by general law, either expressly or by legislative implication [citations]. {People ex rel. Deukmejian v. County of Mendocino (1986) 36 Cal.3d 476, 484, quoting XflKCflJte;' v. Municipal Court (1972) 6 Cal.3d 805, 807-808; accord, Sherman-Williams Co. v. City of Los Angeles (1993)4Cal.4'^ 893,897.r Morehart v County ofSantg Barbara (1994) 7 Cal.4"^ 725, 747. Here Measure GG, with the passage of time and the promulgation ofa RHNA obiigation that is contradicted by the provisions of Measured GG, has become pre-empted by the Housing Element Law, rendering it void. (See also Building Industry Association of Sah Diego v. City of Oceanside (1994) 27 Cal.App.4'''744). - THE GROWTH MANAGEMENT PROGRAM At the eleventh hour, the city has avoided the invalidation of its annual limitation on new housing units, which conflicts with the RHNA, by promulgating an exception to tiie program. The change cures tiie facial invalidity ofthe program and there is no as-applied challenge presented here. COMPLIANCE WITH THE 1999-2007 RHNA OBLIGATION The City is in clear violation of tiie Housing Element Law, tiie Least Cost Zoning Law, and its obligations to complete its 2003 Housing Element prograra designed to satisfy its RHNA for the 1999-2007 planning period. ^ This lawsuit is about the City's obligation to plan and to accommodate its RHNA in its plans. It matters not that the City planners have a belief that the State's RHNA requirements are unlikely to be satisfied because of the current economic climate. First and foremost, the City does not have the discretion to ignore the specific mandates of State law and second, the City planners' current beliefs are subject to change based on economic events beyond the control of either the City or the State. The City still has not accommodated the RHNA allocated to it in 2001. The City's enactment of Ordinance 1998 a month and a half before the hearing on this petition may start a process to cure the City's failure in this matter, but is wholly inadequate to be considered a cure. Its requirement of further necessary acts before any development plan can be approved vitiates any actual remedial effect ofthe Ordinance. Moreover, the "good cause" exception in the Ordinance is illusory because it is not defined and because it is an obvious I disincentive to developers. The requirement that a developer might have to spend a great deal of money just to reach the point where a discretionary detennination of whether "good cause'; exists to allow a developer to continue with a project will inhibit any developer from proposing any residential development. For the above stated reasons, the Writ of Mandate is GRANTED. Respondents City of Pleasanton and City Council ofthe City of Pleasanton must cease and desist from the enforcement, administration, and/or implementation ofthe provisions of Measures GG, PP, and QQ, which limit the number of housing units permitted in Pleasanton, and must remove those provisions from all of Pleasanton's planning documents including the General Plan and any element of the General Plan. This includes Policy 24 and Programs 24.1,24.2, and 24.3 of the Land Use Element of the General Plan. Respondents must implement non-illusory zoning changes sufficient to accommodate the unmet RHNA for the 1999-2007 Planning Period. That is, tiie zoning and land-use changes need be implemented such that they are without condition or need of future discretionary approval Respondents must cease issuing non-residential building permits and all related building permits for any construction or development except as provided in Government Code sections 65755, subdivisions (a)(1) and (b) and 65760 until the City brings its General Plan into compliance witii the requirements of State Law. Petitioners are to prepare a fonn of Writ returnable in 120 days and a form of judgment for the Courts review and consideration and submit them to the court- within ten days. EVIDENTIARY DETERMINATIONS • 1. Petitioners' and Intervener's Objections filed 12/7/09. STERN DECLARATION 1. overruled - goes to weight and credibility. 2. sustained on all three grounds asserted. 3. sustained on all three grounds asserted. 4. overruled. 5. sustained - relevance. 6. sustained - legal conclusion, 7. sustained - legal conclusion. 8. sustained - speculation. 9. ovenuled - goes to weight 10, overruled ~ goes to weight but is Hmited to declarant's expertise as a city planner. ISERSON DECLARATION" 1. sustained - hearsay and relevance. 2. sustained - relevance. 3. overruled - intemal inconsistency, or incorrect facts or incomplete facts are not evidentiary obj ections. 4. overruled-admissible lay opinion. ERICKSON DECLARATION 1. sustained - relevance, LIBIKI DECLARATION 1. sustained - relevance. 2, sustained - relevance. 2. Respondents' Objections dated December 14,2009 CRESSWELL DECLARATION 1. overruled. 2. sustained - relevance. 3. overruled - the portion of the Creswell Declaration contains admissible evidence of an agency's interpretation of its duties. The ruling made on May 17,2007 relates to a different declaration which is not identical to"the declaration at issue. 10 , ( TAEB DECLARATION 4. overruled. 5. overruled, 6. overruled on the grounds asserted. . 7. overruled. 8. sustained. 9. overruled. GHIELMETTI DECLARATION 10. overruled. 11. overruled. 12. overruled. 13. overruled, 14. overruled. • - • RICHARD MARCANTONIO DECLARATION . 15. overruled. Objections to Intervener's Supplemental Request for Judicial Notice, 16 and 17 ~ overruled. 3. Respondent's Request for Judicial Notice is granted. 4. Petitioner's Request for Judicia:! Notice is granted and the objections asserted to it are all overruled. n r 5. Intervener's Request for Judicial Notice is granted and the objections asserted to it are all overruled. 6. Intervener's Supplemental Request for Judicial Notice is granted and the objections asserted to it are overruled. Dated Judge of the Superior Court I . ' ' . • . Frank Roesch 12 CLERK'S DECLARATION OF MAILING I certify tiiat I am not a party to this cause and that on the date stated.below I caused a tme copy ofthe foregoing ORDER GRANTING PETTTION FOR WRIT OF MANDATE to be mailed first class, postage pre paid, in a sealed envelope to the persons hereto, addressed as follows: Richard A. Marcantonio, Esq. . Public Advocates, Inc. 131 Steuart Street, Suite 300 San Francisco, CA 94105 Michael Rawson, Esq. The Public Interest Law Project 44915h Stieet, Suite 301 Oakland, CA 94612 Michael Roush, Deputy City Attomey 123 Main Street P.O. Box 520 Pleasanton, CA 94566 Thomas B. Brown, Esq. Hanson Bridgett Marcus Vlahps & Rudy, LLP 425'lVIarket Street, 26* Floor San Francisco, CA 94105 Cliff Rechtschaffen, Deputy Attomey General 1515 Clay Street, 20* Floor Oakland, CA 94612 Megan H. Acevedo Califomia Department of Justice 1515 Clay Street, 20tti Floor Oakland. CA 94612 I declare under penalty of pequry that the same is true and correct. Executed on March 15,2010 By: Vicki DaybeU, Deg^Sty Clerk Department 31 CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE August 25,2009 TO: Mayor & City Council FROM: City Attomey RE: Palmer/Sixth Street Properties, LP. v. City of Los Angeles (2009 WL 2170637 ^. (Cal. App. 2 Dist.)) - Affordable Housing Rentals Found to Violate State Rent ConUrol Law On July 22,2009 tiie Califomia Court of Appeal published its decision in Palmer/Sixth Street Properties, LP. v. City of Los Angeles ("Pa/mer") and determined that local inclusionary requirements may be pre-empted by State laws regarding rent control. In Palmer, the Court of Appeals found diat any local restriction on rents must comply with State rent control statutes, in particular, tiie Costa-Hawkins Act (Civil Code §§ 1954.51 - 1954.535). The Costa-Hawkins Act provides that, barring an exception, "an owner of residential real property may establish the initial and all subsequent rental rates for a dwelling or unif* (Civil Code§a954.52(a)). The City of Los Angeles adopted a specific plan requiring Palmer to restiict the rents of 60 of the 360 units he was constmcting to levels that were affordable to lower-income households or» altematively, to pay in in-lieu fee. The Palmer court held that tiie language of Costa-Hawkins was "clear and unambiguous" and that forcing Palmer to provide affordable housing at regulated rents was "clearly hostile" to his right under Costa-Hawkins to establish the initial rental rate for tiie dwelling unit. Further, the Court found that because tiie objective of tiie City's ordinance was to impose affordable requirements and the amount of an in-lieu fee option was "inextricably intertwined" witii the pre-empted rent control option, it was also pre-empted by State law. The Court went even further and stated in a footnote tiiat if tiie base requirement had been an in-lieu fee, with voluntary provision of rental affordable units as an altemative, both tiie fee and the voluntary provision of units would be part of "an overall plan that is pre-empted by [Costa- Hawkinsj" and illegal. Costa-Hawkins' limitations do not apply if the owner agrees by contract to lirait rents in exchange for "a dhect financial contribution or any other forms of assistance specified in [density bonus law]" (Civil Code § 1954.52(b)). However, Palmer did not accept a density bonus or any otiier incentive from the City of Los Angeles. The conclusions reached in Palmer are inconsistent witii a previous decision involving the City of Napa's inclusionary ordinance, where the Court of Appeals found tiiat because tiiere were many options to the actual provision of affordable units (such as an in-lieu fee and dedication of land), the ordinance did not impose rent controi. There are also potential conflicts between Palmer and tiie Mello Act (Govenunent Code § 65590 - 65590.1), which requires affordable housing in the coastal zone, and a provision of housing element law allowing inclusionary units to be rented (Government Code §65589.8). The City of Los Angeles has decided to request review from tiie Califomia Supreme Court, However, if tiie case is not modified, it will have implications for the City's inclusionary ordinance. The case will have no effect on inclusionary requirements applied to ownership housing, nor wUl it affect rental housing that received financial assistance or other incentive, * where the developer agreed by contract to limit rent. However, affordable rental housing could not be required in newly created units receiving no assistance or incentives from the City. I would not recommend that the City modify its inclusionary ordinance at this time pending the outcome of the Palmer appeal. Facial challenges to the adoption or latest amendment to the City's inclusionary housing ordinance would have to have been brought widiin the 90-day period established under Govemment Code Section 65009(c)(1)(B). With regard to "as-applied" challenges to the City's mclusionary ordinance, in development projects with a recorded condominium map or other map allowing units to be sold individually, it is likely that the City can continue to require inclusionary even if the developer intends to rent the unit. For development projects that will have no recorded condominium raap or other maps allowing units to be sold individually, it would be best for staff to negotiate some financial '^^^ assistance or other incentive with the developer, or have the developer agree by contract to restrict rents. If the Palmer decision is not ultimately overturned on appeal to the Califomia Supreme Court, our office will revisit the issue with the City Council with recommendations for amending our ordinance. If the Supreme Court refuses to hear the case, the City Councii will be able to decide which District Court of Appeals decision it wishes to follow and will likely follow the First District's mling in the Napa case upholding the constitutionality of an inclusionary ordinance with rent restrictions on new units. We will keep you advised of all developments in this case. A complete copy of this case is on file in our office for your review. JANEMOBALD! Assistant City Attorney kr cc: Community Development Director Planning Director Housing & Redevelopment Director Page 1 of 15 WestLaw -- Cal.Rptr,3d — — Cal.Rptr.3d —, 2009 WL 2170637 (Cal.App. 2 Dist.), 09 Cal. Daily Op. Serv. 9321 (Cite as: 2009 WL 2170637 (CaUApp. 2 Dist.)) Page 1 H Court of Appeal, Second District, Division 4, Cali- fomia. PALMER/ SIXTH STREET PROPERTIES, L.P., et al.. Plaintiffs and Respondents, V. CITY OF LDS ANGELES, Defendant and Appel- lant. NO.B206102. July 22,2009. Background: Developers filed petition for writ of mandate, seeking to preclude city from enforcing an affordable housing ordinance against developers' mixed use project. The Superior Court,' Los Angeles County, No. BS107637,DzinUa Janavs, J., issued the writ, and city appealed. Holdings: The Court of Appeal, Suzukawa, J., held thai: (1) amended complaint did not render moot de- velopers' claim that ordinance conflicted with and was preempted by the vacancy decontrol provisions of die Costa-Hawkins Rental Housing Act; (2) ordinance's affordable housing requirements were hostile or inimical lo Costa-Hawkins Rental Housing Act and thus invalid; and (3) in lieu fee provision was inextricably inter- twined with ordinance's affordable housing require- ments such that fee provision was not severable. Affirmed. West Headnotes [1] Municipal Corporations 268 €^111(2) 268 Municipal Corporations 268IV Proceedings of Council or Other Govern- ing Body 268IV(B) Ordinances and By-Laws in Gener- al 268k 111 Validity in General 268k 111(2) k. Conformity to Constitu- tional and Statutory Provisions in General. Most Cited Cases If otherwise valid local legislation conflicts with state law, it is preempted by such iaw and is void. West's Ann.Cal. Const. Art. 11, § 7. [2] Municipal Corporations 268 €=^592(1) 268 Municipal Corporations 268X Police Power and Regulations 268X(A) Delegation, Extent, and Exercise of Power 268k592 Concurrent and Conflicting Ex- ercise of Power by State and Municipality 268k592(l) k. In General. Most Cited Cases A conflict exists between local legislation and state law if the local legislation duplicates, contradicts, or enters an area fully occupied by general law, either expressly or by legislative implicadon. West's Ann.Cal. Const. Art. 11, § 7. 131 Municipal Corporations 268 €=»S92(1) 268 Municipal Corporations 268X Police Power and Regulations 268X(A) Delegation, Extent, and Exercise of Power 268k592 Concurrent and Conflicting Ex- ercise of Power by State and Municipality 268k592(l) k. In General. Most Cited Cases Local legislation is duplicative of general law for preemption purposes when it is coextensive there- with. West's Ann.Cal. Const. Art. 11, § 7. [4] Municipal Corporations 268 0==>111(2) 268 Municipal Corporations 268IV Proceedings of Council or Other Govern- © 2009 Thomson Reuters/West. No Claim to Orig. US Gov. Works. httn7/wph7 wpsstiaw rnm/nrinr/nrtnt.';trf.am asr>x'?.«:v=:.Snlft<%'nrft=HTMT .F.^ifm=Nnt5;*»t*^mt 8/S/9nnQ CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE March 15,2010 TO: MAYOR & CITY COUNCIL FROM: CITY ATTORNEY PALMER/SIXTH STREET PROPERTIES, LR v. CITY OF LOS ANGELES (2009 WL 2170637 (Cal,App. 2 Dist)) - Affordable housmg rentals found to violate State rent controi law. In a previous memorandum dated August 25, 2009,1 infonned you of the July 22, 2009 Court of Appeal decision in Palmer/Sixth Street Properties, LP. v. City of Los Angeies ('^Palmer''). That decision detennined that local inclusionary requirements for rental units are pre-empted by State law regarding rent control unless the developer agrees by contraa to limit rent in exchange for "a direct financial contribution" or any other forms of assistance specified in density bonus law. The Court found that forcing Palmer/Sixth Street Properties to provide affordable housing at regulated rent was "clearly hostile" to its right under the Costa-Hawkins Rental Housing Act ("Act"), adopted in 1995, to estabUsh the initial rental rate for the dwelling unit. The Act (Civil Code §§1954.51- .535) allowed owners in rent control commumties to establish the initial rent for a new unit and to increase the rent to market levels whenever a unit is vacated. In addition, the Court found that because the object ofthe City's ordinance was to impose affordable requirements and the amount of the in-lieu fee option was "inextricably intertwined" with the pre-empted rental control option, it was also pre-empted by State law. After this decision, the City of Los Angeles requested review from the California Supreme Court. In my previous memorandum, I informed you that if the Palmer decision was not ultimately overturned on appeal by the Supreme Court, our office would revisit the issue with a recommendation as to whether or not to amend our inclusionary ordinance since there was a previous conflicting Court of Appeal decision in Home Builders Association of Northem Califomia v. City of Napa, etal (2001) (90 Cal.App.4* 188) {*'Napd"). That case upheld the constitutionality of an inclusionary ordinance, which required developers of residential housing units to sell or rent 10% of their units at affordable levels. In the event of conflicting Court of Appeal decisions in districts other than our own 4* District Court of Appeal, the City Council is allowed to decide which analysis to follow. On October 22, 2009, the California Supreme Court denied review of the Palmer decision, allowing h to remain vaHd law. It is my recommendation at this tiime that the City Council follow the more current 2"^ District Court of Appeals' decision in the Palmer case rather than the Napti case because the Palmer decision specifically focuses on the issue of whether inclusionary rental housing is pre-empted by State law. Therefore, in conjunction with Planning and Housing staff, I am drafting proposed amendments to CMC Chapter 21,85 which will first be reviewed by the Planning Commission and th^n forwarded on to the City Council for final action. This amendment to the Zone Code will also require a Local Coastal Plan amendment, as Chapter 21.85 is the implementing ordinance forthe Local Coastal Plan inthe Coastal Zone. ^ANE MOBALDI Assistant City Attomey /kr cc: City Manager Community Development Director Planning Director Housing & Redevelopment Director PaliTfer/Slxth Street Properties, L.P. v. City of Lo, 175 Cal App.4th 1386 96 Cal.Rptr.3d 875, 09 Cal. Daily Op. Serv. 9321, 2009 Daily Journal D.AR. 10.859 96Cal.Rptr.3d875 Court of Appeal, Second District, Division 4, California. PAl^MER/Simi STREET PROPERTIES, L.P., et al.. Plaintiffs and Respondents, V. CITY OF LOS ANGELES, Defendant and AppeUant. No. B206102. July 22,2009. Review Denied Oct. 22,2009. Synopsis Background: Developers filed petition for writ of mandate, seeking to preclude city from enforcing an affordable housing ordinance agauist developers* mixed use project. Thc Superior Comt Los Angeles County, No. BS107637, Dzintra Janavs, J., issued the writ, and city appealed. Holdings: The Court of Appeal, Suzukawa, J., held that; 1 amended complaint did not render moot developer' claim that ordinance conflicted with and was preempted by the vacancy decontrol provisions of the Cceta-Hawkins Rental Housing Act; 2 ordinance's affordable housing requirements were hostile or inimical lo Costa-Hawkins Rental Housing Act and thus invalid; and 3 in lieu fise provision was inextricably intertwined with ordinance's affordable housing requirements such that fee provision was not severable. Affirmed. West Headnotes (10) 1 Municipal Corporations v» Conformity to constitutional and statutory provisions in general If otherwise valid local legislation conflicts with state law, it is preempted by such law and is void. West's Ann.Cal. Const. Ait. 11, §7. Cases that cite this headnote 2 Municipal Corporations Concurrent and Conflicting Exercise of Power by State and Municipality A conflict exists between local legislation and state law if the local legislation duplicates, contradicts, or enters an area fully occupied by general law, either expressly or by legislative implication. West's Ann.Cal. Const. Art. 11. § 7. Cases Uiat cite this headnote 3 Municipal Corporations v» and Conflicting Exercise of Power by Municipality Concurrent State and Local legislation is duplicative of general law for preemption puiposes when it is coextensive therewith. West's Ann. Cal. Const. Art. 11, § 7. Cases that cite tliis headnote 4 Municipal Corporations v» Conformity to constitutional and statutoiy provisions in general Local legislation is contradictoiy to general law for preemption purposes when it is inimical thereto. West's Arai.C^l. Const. An. lh §7. Cases that cite this headnote 5 Municipal Corporations ^ and Conflicting Exercise of Power by Municipali^ Concurrent State and Local legislation enters an area that is fully occupied by general law, for preen^>tion puiposes, when the Legislature has expressly manifested its intent to fiilly occupy the area or when it has impliedly done so in light of one of die foliowing indicia of intent: (I) the subjeci matter has been so ftilly and completely covered by general law as to clearly indicate that it has become exclusively a matter of stale concern, (2) the subject matter has been partially covered by general law couched in such terms as to indicate cleariy tbat a paramount state concern will not tolerate further or additional local action, or (3) the subject matter has been partiaUy covered by general law, and the subject is of such a nature that the adverse effect of a local ordinance on Oie transient citizens of tiie state outweighs the possible benefit to the locality. West's Ann.Cal. Const. Art. 11, § 7. Cases that cite this headnote Zoning and Planning v<» Mootness 'A'esilavvNexl 'v; 2QiO Tnotnsofi Rfuie!.-< v\"..!S! Cici.iu ic Ouij. Palnler/Slxth Street Properties, L.P. v. City of Lo, 175 Cal7^pp.4th 1396 96 Cal.Rptr.3d 875,09 CaL Dally Op. Serv. 9321,2009 Daily Joumal D.AR. 10,859 Developers' amended complaint, which stated that developers would pay in Ueu fee rather than build required affordable housing units if city's afifordable housing ordinance was upheld, did not render moot developers' daim (hat ordinance conflicted with and was preempted by the vacant decontrol provisions of the Costa-Hawkins Rental Housing Act; amendment simply clarified that an adverse raling on die complaint would result in the payment of the in lieu fee rather than the constniction of low income housing units. West's Ann.Cal. Const. Art. 11, § 7; Wesf s Ann.Cal.Civ.Code § 1954.50 et seq. See 12 Witldn, Summary of Cal Law (10 ed. 2005) Real Properfy, § 574; Friedman et ai, CaL Practice Guide: iMndlord-Tenant (The Rutter Group 200$) \ 5:10 et seq. (CAUNDTEN Ch. 5-A): 7 mier & Starr, CaL Real Estate (3d ed 2001) § 19:91; Cai Civil Practice (Thomson Reuters 2009) Real Property Litigation, § 30:8 etseq.; CaL Jur. 3d, Landlord and Tenant, ^ 166. Cases that cite this headnote 7 Zoning and Planning cases Otiier particular City ordmance's affordable hotising requirements were hostile or inimical to Costa-Hawkms Rental Housing Act provision allowing residential landlords to "establish the initial rcntal.rate for a dwelling or unif such that the Act preempted the city ordinance; ordinance denied developer the rigjlit to establish the initial rental rates for the affordable housing units that are required to be built under the ordinance and preserved their regulated rent levels for 30 years or ilie life of Uie unit, and ordinance's in lieu fee option, which provided an altemative to the affordable housing requirements, was inextricably intertwined with the affordable housing requirements because the fee amount was based solely on the number of affordable housing units that a developer must provide. West's Ann.Oil. Const. Art. H, § 7; West's Ann.Cal.Civ.Code § 1954.53. Cases that cite this headnote 8 Municipal Corporations <ip' partial invalidity Statutes v» Effect of Paitial Invalidity Effect of Although not conclusive, a severability clause normally calls for sustaining the valid part of the enacUnent, especially when the invalid part is mechanically severable. Cases lhat cite this headnote 9 Municipal Corporations partial invalidity Statutes Effect of Partial InvalidiQr Effect of A severabiUty clause plus tiie ability to mechanically sever the invalid part whUe nonnally allowing severability, does not conclusively dictate it; the final determination depends on whether the remainder is complete in itself and would have been adopted by the legislative body had the latter foreseen the paitial invalidity of the statute or constitutes a completely operative cx|ncssion of thc legislative intent and is not so connected with the rest ofthe statute as to be mseparable. Cases that cite this headnote 10 Municipal Corporations partial invalidity Effect of City affordable housing ordinance's in lieu fiee provision, which allowed a developer to pay a fee in lieu of providing affordable housing, was mextricably intertwined with ordinance's affordable housing requirements, because the fee amount was based solely on the number of affordable housing units that a developer must provide, and Uius in lieu provision was not severable from the ordinance's affordable housing requirements, which were iznalid due to conflict with Costa-l^bwkins Rental Housing Act provision allowing residential landlords to "establish the initial rental rate for a dwelling or unit." West's Ann.Cal. Const. Art. U, § 7; West's Ann.Cal.Civ.Code § 1954.53. Cases that cite this headnote Attomeys and Law Firms **877 Rockard J. Delgadillo, City Attorney, Jeri L. Burge, Assistant City Attorney, Tayo A. Popoola and Michael L. Bostrom, Deputy City Attomeys, for Defendant and Appellant ACLU Foundation of Soutiiern California, Peter Bibring, Peter J. Eliasberg, and Mark D. Rosenbaum, Los Angeles; Westem Center on Law & Poverty, Richard Rothschild, Los Angeles, and Lynn Martinez, Vallejo; Legal Aid Foundation of Los Angeles and Christian Abasto; Califomia Affordable Housing Law Project, Public Interest Law Project and Michael Rawson; Public Counsel and Shaslii Hanuman; and Bet Tzedek Legal Services and Michelle Marie Kezirian for Amici Qiriae Southem California Association of Non-Profit Housing and The Association of Community Organizations fbr Reform Now on behalf of Defendant and Appellant Costell & Cornelius Law Corporation, Jeffrey Lee CosicU, Alexandre Ian Cornelius, Santa Monica. Mitchell E. Rishe, Los Angeles, and Sean M. Cronin for Plaintiffs and Respondents. Palmer/Sixth Street Properties, L.P. v. City of Lo, 175 Cal App.4th 1396 96 Cal.Rptr.3d 875.09 Cal. Daily Op. Serv. 9321,2009 Daily Joumal D.AR. 10.659 Piero II project conflicts with and is preempted by the Act. Opinion SUZUKAWA, J. *1399 Hie superior court issued a writ of mandate tiiat precludes ai^Uant City of Los Angeles (the City) from enforcing an affordable housing ordinance a^dnst a mixed use project that is being developed hy respondents Pahner/Sixth Street Properties, L.P., and Geoffrey Palmer (jointiy, •*878 Palmer). The superior court concluded tiiat, as appMod to Palmer's proposed project, the affordable housing ordinance conflicts with and is preempted by the vacanqr decontrol provisions of the Costa-Hawkins Rental Housing Act (Civ.Code, § 1954.50 et seq. (the Costa-Hawkins Act or the Act)), which allows residential landlords to set the initial rent levels at the commenoement ofa tenancy. The Cily lias appealed from fhe judgment, whidhi we afiirm. BACKGROUND In 1991, tiie City adopted a Speciflc Plan (tiie Plan) for development projects! within the area located inunedialely west of the Hdibor Freeway near downtown Los Angeles called Central Cily West (the Area), hi relevant part, section I l.C of the Plan (section I l.C) imposes affordable housing requirements on residential and mixed U5e2 projects of more than 10 dwelling *1400 units per lot:3 According to section 2.D of the Plan, the City adopted these requirements in order lo protect tiie Area's " existing residential community from further displacement, replace dwelling units previously removed firom the Spocific Plan area, and provide new housing in proportion to the need, by household size and income, associated with tiie existing commuiuty and new jobs generated m tiie Plan area.''4 This litigation concerns tite City's conditional approval of a mixed use project (Piero II or the project) Uiat Palmer plans to build Tvithin the Area. The site is currently used as a paiking lot, but it previously contained a 60-iniit low income apaitment hotel tiiat was demolislied in 1990. The City conditionally approved the project subject to Palmer's compliance with section ••879 ll.C's affordable housing requirements, but Palmer contends tiie requirements conflict with and are preempted by die Costa-Hawkins Act. As previously mentioned, the Costa-Hawkins Act's vacancy decontrol provisions allow residential landlords to set tiie initial rent levels at tiie commencement of a tenancy. The Plan, on tiie other hand, requires either the construction of affordable housing units tiiat are subject to rent restrictions for tiie life of the units or for 30 yeais, whichever is greater, or the payment of an in lieu fee that the City will use to build affordable housing units elsewhere. The dispositive issue, both below and on appeal, is whether the City's application of section ll.C's affordable housing requhements to the I. Section ll.C's Affordable Housing Requirements Section ll.C.2.a requires ai^licants for multiple-femily residential or mixed use projects to comply with whichever of the following will result "in the greater number of affordable dwelling units: 1) Document and replace, on a one-for-one basis in the form of new dwelling unit construction. Low •140! and Veiy Low Income Dwelling Units5 and/or guest rooms demolished on tiie lot or lots on or after Februaiy 14,1988; or [%\ 2) If no dwelling units were demolished on the lot or lots on or after Februaiy 14, 1988, a Project Applicant shali designate [and] reserve a total of 15% of the dwelling unitl ]s within the Project as Low [IJiicome Dwelling Units." Altematively, if a multiple family residential project applicant does not wish to comply with the Plan's replacement and inclusionary dwelling requirements, section 1 l.C provides for the payment of an "in lieu" fee. Section n.C describes tite in lieu fee as follows: "In lieu of the requirements of this Subdivision, a multiple-family residential Project Applicant may pay a fee. {fj 1) The in lieu fee for a required Very Low Income Dwelling Unit shall be $100,576.14 per unit ITfl 2) Thc in lieu fee for a required Low Income DweUing Unit shaU be $78,883.41 per unit." The Plan limits the monthly rents that may be ch^gcd for any required affordable housing unit that is built under section II.C. According to section 1 I.E of the Plan, tiie monthly rent for low income dwelling units "shali not exceed 30% of 80% of Qie median monthly income for persons or families residing in the Los Angeles Standard MetropoUtan Statistical Area," and for very low income dwelling units, the moiUhly rent "shall not exceed 30% of 50% of the median monthly income." Section 11 .E fiiititcr provides that these rent restrictions shall remain in place, tiirough fhe use of deed restrictions, "for the life of the dwelling units or for 30 years, whichever is greater." IL Pjiimer*s Project Application and Waiver Request In 2006, Palmer aj^lied for approval of the Piero II project, which wiU mclude "350 residential units and 9,705 square feet of commercial space on 2.84 acres, consisting of 11 separate, contiguous lots." Because the project site formerly contained a 60-unit low income apartment hotel tiiat was demolished in July 1990, the City concluded ••880 tiiat the project faUs witiun tiie scope of section ll.C's replacement dwelling requirements. Palmer requested a waiver of section ll.C's affordable to Ofjg. I'S Gov, WoiKs Palnler/Sixth Street Properties, L.P. v. City of Lo, 175 Cal.App.4th 1396 96 Cal.RptrSd 875,09 Cal Dally Op. Serv. 9321.2009 Dally housing requirements. In support of its waiver request, Palmer pointed out tiiat the cost of providing 60 rq>Iaoement low income dweUing unite "would reduce tbe amount of loan proceeds otherwise available to the project by approximately t]402 $10 miUion, which would render the project economicaUy infeasable."6 Palmer also stated that because the site is "currently being used as a parking lotl,l no existing dwelUng units wUl be demohshed or removed as a result of the project Instead, the [t»roject] wUl pro\'ide an additional 350 units to the existing supply of rental housing in the area, which wiU enlionce the housing opportunities for people who work in downtown." Palmer objected that applying section 1 l.C's affordable housing requirements to the project would violate tiie Costa-Hawkins Act. Palmer aigued that the C^sta-Hawkins Act "pre-empte the area of rental control regulation and provides, among other things, that an 'owner of residential real property may estabUsh the initial and aU subsequent rental rates for a dwelUng or a unit... [which] has a certiflcate of occupancy issued after Febniaiy I, 1995.' [Civ.Code, § 1954.52, subd. (a)(1).]" Palmer contended that section I l.C's affordable housing requirements are "exactiy thc type of local regulation fliat the (3osta-Hawkins Act was designed to prohibit, as it would reduce, if not entirely eliminate, flie economic motivation to produce the vety rental housmg that the C!osta-Hawkins Act seeks to encourage, as it would interfere with appUcant's right to set initial rents on all of the new apaitinents produced, and aU future rental increases for the property." Palmer fiirther argued that because it was not "applying for any aMtional incentives" or receiving "any form of any govemment support," the project should be exempted &om section ll.C's affordable housing requiremenls. (See Civ.Code, § 1954.52, subd. (b) [the Costa-Hawkins Act "does not apply where the owner has otherwise agreed by contract witii a pubUc entity in consideration for a direct flnancial contribution or any other forms of assistance specified m Ciiapter 4.3 (commencing witii Section 65915) of Division 1 of Titie 7 of tiie Govemment Code"].) Although both the Costa-Hawkins Act and section 11.C pennit developers to obtain density bonuses,? Palmer pointed out that ••SSI it has no need for a density bonus, because the project involves "approximately 40% fewer " units than are allowed by the zoning onlinances. •1403 m. The City's Administrative Rulings The local plannmg commission, the planning and land use management committee, and tiie city council reviewed Palmer's waiver request At each level, the waiver was denied on the ground tiiat the site formerly contained a 60-unit low income apartment hotel that was destroyed Joumal D.AR. 10,859 witiun the time period covered by the Plan. The planning commission condUionally approved the project subject to section ll.C's affordable housing requirements, as stated in condition 10 of the project approval. Under condition 10, Palmer must: (1) provide 60 replacement low income dweUing units, eitW on or off-site, or pay an in-lieu fee of $96,182.17 per unit for 60 units, for a total of $5,770,930.20;8 and (2) execute a "Covenant and Agreemenf to maintain the rent restrictions set forth m section 1 I.E of the Plan for at least 30 years afler the project's certiflcate of occupancy is is5ued.9 The City's planning and land use inanagement committee review^ the administrative record and, afier conducting a public hearing, sustained condition 10 of the project approval. The city councU also considered the matter and, after conducting a hearing, adopted the committee's recommendation and denied the administnitive appeal. IV. This Judicial Action Following flie denial of its administrative appeal, Pahner flled tiie present complaint for administrative writ of mandate, damages, and declaratory and ^1404 injunctive relief. 10 In tiie mandamus claim, whidi is the only claim at issue on appeal, Pahner alleged that flie application of section ll.C's affordable housing requirements to the project violated both Uie Costa-Hawkins Act and the Mitigation Fee Act. (Gov.Codc, § 66000 et seq.) The superior court stayed the other causes of action pending a hearing on tiie mandamus claim. Prior to the mandamus bearing, leave to intervene in the action was requested by associations of affordable housing tenants (the Association of Community Organizations for Reform Now (ACORN)) and nonprofit developers (the Southern CaUfomia Assodation for Non-Profit Housing (SCANPH)). Palmer argued that tiie request should be denied as moot because, regardless of the outcome of the mandamus proceeding, it would not be building any low income housing units, either within ••882 the project or elsewhere. To clarify this point, Palmer flled an amended complaint stating that if it did not obtain relief from condition 10 of the project approval, it would pay the in lieu fee rather than buUd the reqiured affordable housuig units. The trial court denied tiie intervention request, which is the subject of a related appeal by ACORN and SC^ANPH.ii (Palmer/Sixth Street Properties, LP. v. City of los Angeles, B200813.) In the mandamus proceeding, Palmer argued that applying section ll.C's affordable housing requirements to flie project would violate the Costa-Hawkins Act. Palmer stated below that "the Costa-Hawkins Act indicates a clear mtent on the part of the state legislature to preempt all local rent control laws. -55?^ Apartment Ass'« of Los .Angeles County, Inc. v. City of Los Angeles (2006) 136 Palnier/Sixth Street Properties, L.P. v. City of Lo, 175 Cal.App.4th 1396 96 CaLRptrSd 875,09 Cal. Daily Op. Serv. 9321,2009 Dally Cal.App.4tii 119, 130 [38 Cal.Rptr.3d 575] (holding that the Costa-Hawkins Ad 'preempts local rent control by permitting landlords to set the initial rent for vacant units'). As such, the [rqilacement dwelling requirements] of the Speciflc Plan, which impose restrictions on the initial and subsequent rents Petitioner may charge for [Piero n] units, violates and is preempted by Costa-Hawkins Act"i2 •1405 The si^rior court concluded that applying section ll.C's affoniiaibie housing requirements to flie project would be fetaUy inconsistent with the Costa-Hawkins Act. The superior court rejeded ttie City's altemative £u^unienl to eitibrce section U.C's "in Ueu" fee provision as a stand-^tione fee provision, while striidng the preenqned provisions fixim the rest of the ordinance. The superior court concluded that the fee provision was so inextricably intertwined with the preempted provisions of the ordinance that severing the fee provision was not a viable option. FoUowing Palmer's dismissal of the non-mandamus claims, tiie superior court entered a judgment (1) requiring the City to set aside, eUxoinate, and not enforce condition 10 of the project approval; and (2) prohibiting the City flom applying section 1 l.C's affordable housing requirements to the Piero II project The City has appealed from the judgment DISCUSSION t Standard of Reiicw Although the parties disagree as to whether the mandamus claim is properiy characterized as a claim for traditional (Code Civ. Proc., §§ 1084-1094) or adntinistrative (id, § L094.5) mandamus, in either case tiie standard of review would be the same because there are no disputed issues of fact **S83(Bo.'stean v. Los Angeles Unified School Dist. (1998) 63 Cal.App4fli 95, 107, 73 Cal.Rp&-.2d 523.) As tiie issues regarding tiie Costa-Hawkins Act present pure questions of law, we wUI review the trial court's decision de novo. (lbid.;Pellerin v. Kern County Employees' Retirement Assn. (2006) 145 Cal.App.4tii i099, 1105. 52 Cal.Rptr.3d20i.) U. Preemption by the Costa-Hawkins Act The C^sta-Hawkins Act, which was enacted in August 1995, "established *what is known among landlord-tenant specialists as "vacancy decontrol," declaring that "[njotwithstanding any otiicr provision of law," all residential landlords may, except in specifled situati(Mis, "establish the initial rental rate for a dweUmg or unit" (Civ.Code, § 1954.53, subd. (a).)' (DeZerega v. Meggs (2000) 83 Cal,App.4tii 28, 41 [99 Cal.Rptr.2d 366).) The •1406 effed of ti^s provision was to pennit landlords 'to impose whatever rent fliey choose at thc commencement of a tenancy.' (Cobb v. San Francisco Residential Rent Stabilization & Arbitration Bd. (2002) 98 Cal.App.4tii Journal O.AR. 10,859 345, 351 1119 Cal.Rptr.2d 741].)" (Action Apartment Assn., Inc. v. City of Santa Monica (2007) 41 Cal.4tii 1232, 1237-1238,63 Cal.Rptr.3d 398,163 R3d 89.) The City contends that tiie judgment must be rex'ersed because the affordable housing requirements that were imposed m condition 10 of the projed approval do not conflid with the Costa-Hawkins Act For flie reasons that follow, we disagree. A. General Preemption PrincipUs In Sherwin-Williams Co. v. City of Los Angeles (1993) 4 CaL4tii 893, 897-898, 16 Cal.Rptr.2d 215, 844 P.2d 534, our Supreme C^urt stated the following general principles goveming preemption anafysis: "Under article XI, section 7 of the (lifornia Constitution, Ta] county or dty may make and enforce witiiin its Umits aU local, police, sanitary, and other ordinances and regulations not in conflict witii general laws,' [Fn. omitted.] 1 " 'If otiierwise valid local legislation conflicts with slate law, it is preempted by such law and is void.' (Candid Enterprises, Inc. v. Grossmont Union High School Dist. (1985) 39 Cal.3d 878, 885 [218 Cal.Rptr. 303. 705 P.2d 876]; accord, e.g., IT Corp. v. Solano Countv Bd of Supen'isors (1991) I Cal.4fli 81, 90 [2 Cal.Rptr,2d 513, 820 P.2d m3];People ex rei Deukmejian v. County of Mendocino (1984) 36 C;al.3d 476, 484 [204 Cal.Rptr. 897,683 P.2d \\50\\Uncasterv. Municipal Court (1972) 6 Cal.3d 805, 807 [ioO Cal.RpU-. 609,494P.2d681].) 2 " 'A conflict exists if the local legislation " 'dupUcates, contradicts, or enters an area fully occupied by general law, either expressly or by legislative implicatioa" " (Candid Enterprises, Inc. v. Grossmont Union High School Dist., supra, 39 Cal.3d at p. 885, 218 Cal.Rptr. 303, 705 P2d 876, which quotes, witiiout dtations, People ex rei Deukmejian v. County of Mendocino, supra. 36 Cal,3d at p. 484, 204 Cal.Rptr. 897, 683 P. 2d 1150, which in tum quotes, with citations, Lanca.ster v. Municipal Court, supra, 6 Cal.3d at pp. 807-808, 100 Cal.Rptr. 609,494 P2d 681; accord, e.g., IT Corp. V. Solano County Bd. of Supervisors, supra, I Cal.4tii at p. 90, 2 Cal.Rptr.2d 513. 820 R2d l023;Western Oil & Gas Assn. v. Monterey Bay Unified Air PoUution Control Dist. (1989) 49 Cal.3d 408, 423. 261 Cal.Rptr. 384, 777 R2d l57;Cohen v. Board of Superx'isors (1985) 40 Cal.3d 277, 290. 219 CaLRpir. 467,707 R2d 840.) •1407 3 "Local legislation is 'di^licative' of general law when U is coextensive therewith. (See In re Portnoy (1942) 21 Cal.2d 237, 240 [131 P2d 1] [finding 'duplication' where local legislation purported to impose ••884 the same criminal prohibition fliat gen^ law Palnier/Sixth Street Properties, L.P. v. City of Lo, 175 Cai.App.4th 1396 96 Cal.Rptr.Sd 875, 09 Cat Daily Op. Serv. 9321, 2009 Daily Journal D.AR. 10,859" imposed].) 4 "Similarly, local legislation is 'contradictoiy' to general law when it is inimical thereto. (See Ex parte Daniels (1920) 183 Cal. 636, 641-648 [192 R 442] [flndmg 'contradiction' where local legislation puxport^ to fix a lower maximum speed limit for motor vehicles ttian that which general law fixedl.) 5 "FinaUy, local legislation enten; an area that is 'fidly occupied' by general law when the Legislature has expressly manifested its mtent to 'fully occupy' the area (see, e.g.. Candid Enterprises, Inc. v. Grossmont Union High School Dist., supra. 39 Cal.3d at p. 886 [218 Cal.Rptr. 303, 705 P.2d 876]), or when it has impUedly done so in U^t of one of the foUowing indicia of intent: '(1) the subjed matter has been so fiiUy and completely covered by general law as to clearly indicate that it has become exclusively a matter of state concern; (2) the subject matter has been partiaUy covered by general law couched in such terms as to indicate clearly that a paramount state concem wiU not tolerate further or additional local action; or (3) flie subjed matter has been partiaUy covered by general law, and the subject is of such a nature that the adverse effect of a local ordinance on die transient dtizens of the state outweighs flie possible benefit to flie' locality (In re Hubbard (1964) 62 Cal.2d 119,. 128 [41 C:al.Rplr. 393, 396 R2d 809], 'overruled' on another point. Bishop v. Citv of San Jose 1(1969)] 1 Cal.3d [56,] 63, fn. 6 [81 Cal.Rptr. 465, 460 P.2d 137]; accord, e.g., JTCorp. v. Solano County Bd. of Supervi.wrs. supra, 1 Cal.4tii at pp. 90-91 [2 Cal.Rptr.2d 513. 820 R2d m3];Western Oil & Gas .4ssn. v. Monterey Bay Unified Air Pollution Control Dist., supra, 49 Cal.3d at p. 423 [261 Cal.Rptr. 384, 777 P.2d \57\;Cohen v. Board of Supervisors, supra, 40 Cal.3d at pp. 292-293 [219 Cal.RpU-. 467. 707 R2d m]:Candid Enterprises, Inc. v. Grossmont Union High Schoot Dist., supra. 39 Cal.3d at p. 886 [218 Cal.Rptr. 303. 705 R2d 876|:Peop/e ex rel Deukmejian v. County of Mendocino, supra, 36 CaL3d at p. 485 [204 CaLRptr. 897, 683 R2d 1150])." B, The Preemption Issue Was Not Rendered Moot in This Case 6 The City contends that the preemption issu^ was rendered moot when Pahner amended the complaint to allege that if condition 10 is upheld. Palmer will pay the in Ueu fee rattier than build flie required affordable housing units. The City argues that "Palmer cannot take the issue of [section ll.C's] rental limitations out of flie Utigation in order to deprive proposed interveners of standing, and then reinsert the issue in the case when litigating against flie City. Chice Palmer lrre\'ocably elected to pay the fees, there was no longer •UOS even the potential danger tl^ [section ll.Cj would have any impad on flie initial rents at the Piero II. As such. Palmer's Costa-Hawkins claim became moot, and the trial court should have decUned to entertain it Piatt v. Wells Fargo Bank Am. Tr. Co.. 222 Cal.App.2d 658, 670 [35 CaLRptr, 377] (1963) (equity does not caU for the detennination of 'conjectural or premature matters which do not constitute adual or present controversies ...'); Branick v. Downey Sav. & Loan Ass'n, 39 CM4th 235, 243 [46 Cal.Rptr.3d 66, 138 R3d214] (2006) ('rendering of advisoiy opinions falls within neither the ftinctions nor die jurisdidion of this court'). ([C]itations and quotations omitted.)" We disagree fliat flie issue was rendered moot by the amended pleading. The amendment sunply clarified that an adverse mUng on the complaint would result in the payment of thc in Ucn fee rather than flic constmction of low income housing ••SSS units. This clarification did not constitute a waiver or forfeiture of any of the complaint's substantive allegations. Accordingly, we reject the City's argument ' C, Other Preemption Cases Although we have found no case diredly on point, we note that other courts have invaUdated other rent control provisions that conflicted with the Costa-Hawkins Act. For example, in Bullard v. San Francisco Residential Rent Stabilization Bd (2003) 106 Cal.App.4fli 488, 130 Cal.Rptr.2d %\9(Bullard), the appellate court overturned a provision that pennitted evictions if the landlord was reclaiming a rent-controUed apartment as the landlord's pruicipai residence, provided flie landlord offered Uie displaced tenant another unit at a regulated rent The appellate court rejected flie tenant's aigument tiiat the rent restriction was a permissible form of local evidion control under the Costa-Hia\^iis Ad, which allows public entities to regulate aod monitor the grounds for eviction. (Civ.Code. § 1954.53, subd. (e) ["Nothing m tius section shaU be constmed to affed any authority of a public entity that may otherwise exist to regulate or monitor the grounds for eviction."].) Tlie appellate court concluded that because a rent restriction is not a ground for eviction, il could not be justified as a form of eviction control: "Had flie Legislature Intended to preserve local authority to control rent foUowing evidions, we do not beUeve it would have spoken in terms of the 'grounds for eviction,' which sin:q}fy do not include flie amount of rent a landlord may charge afler evicting a tenant The San Frandsco rent control ordinance, by purporting to Umit the amount of rent a landlord may charge for a replacement unit following an owner move-in eviction, directiy contradicts state law providing: 'Notwithstanding any other provision of law, an owner of residential real property may estabUsh flie initial rental rate for a dwelling or unit...' (Civ.Code, § 1954,53, subd. (a).) Therefore, ttie challenged ^1409 provision is preempteil. (Birkenfeld v, City of Berkeley (1976) 17 Cal.3d 129, 141 [130 C:al.Rptr. V;'astlawNext ZOIC "h^itivson Rf^iiters/Wf-si h:.- CiMsnj io 0;V) •!'.'i-''<': Palnher/Sixth Street Properties, L.P. v. City of Lo, 175 CalApp.4th 1396 96 Cal.Rptr.3d 875, 09 Cal Dally Op. Serv. 9321, 2009 Daily Journal D.AR. 10,859 465, 550 P.2d lOOl];Sherwin-Williams Co. v. City of Los Angeles [. supra,] 4 Cal.4tti 893,897-898 [16 Cai.Rptr.2d 215, 844 R2d 534].)" (Bullard, supra. 106 Cal. App.4tti at pp. 492-493,130 Cal.Rptr.2d 819.) la Apartment Assn. of Los Angeles County. Inc. v. Cityof Los Angeles, supra. 136 Cal.App.4tti 119, 38 Cal.Rplr.3d 575 (Apartment Assn.), the appellate court overturned a Los Angeles rent conirol onUnaiice ttiat preserved certain rent restrictions indefinitefy. The ordinance required landlord^ foUowing the termination of their "Section 8 housing confrad with the City's Housing Authority," to continue charging the restricted "rent und^ the former contract, wittiout any limitation as to time." (Id at p. 122, 38 CaI.RpU;.3d 575.) The Cosla-Hawkins Act, on the other hand, provides only a 90-day period during which the tenant may continue paying the prior restricted rent (Civ.Code, § 1954.535.) The appellate court concluded that the ordinance's unUmited rent restriction conflicted with and was preemjHed by tiie Costa-Hanldns Act, stating: "The Legislature, in Civil Code section 1954.535, specUied the period of time a tenant's rent payment is frozen foUowing termination or nonrenewal of a Section 8 agreement-90 d^tys following receipt of notice of termination or nonrenewal. Because the Legislature has fully occupied flie fleld in this area, Munidpal Code sedion 151.04B., the 2002 Ordinance, which purports to confer greater protections upon the tenant by freezing thc tenant's pajrment beyond 90 days, and apparentiy indefinitely, is preempted." (Apartment Assn., at p. 132, 38 Cal.Rptr.3d 575.) ••886 hi contrast witti the above cases. Division Three of this distrid recentty concluded fliat the Costa-Hawkins Act did not preempt the City's rent recontrol ordmance, which "[»ovide$ that if a landlord demolishes residential propeity subjed to City's rent control law, and builds new residential rental units on the same property within five years, ttie newly constmcted units are also subject to the rent control law." (Apartment Assn. of Los Angeles County, Inc. v. City of Los Angeles (2009) 173 Cal,App.4tti 13, 17, 92 Cal.Rptr.3d 441.) The ordinance was authorized by flie EUis Ad (Gov.Code, § 7060 et seq.), which predates ttie Costa-Hawkitts Act The EUis Ad, which aUows residential landlords to evict their tenants and go out of business if they comply with certain procedural requuements, was amended to include recontrol provisions that prevent landlords from evicting tenants under ttie prdext of going out of business and then re-leasmg ttie units at an unregulated rental rate wittiin ttie next five years. ((jov.Code, § 7060.2, subd. (d).) Division Three concluded that ttie <I!osta-Hawkins Ad neittier impliedly repealed ttie EUis Ad (Gov.Code, § 7060.2, subd. (d)), nor preempted the ordinance. (Apartment Assn. of Los Angeles County. Inc. v. City of Los Angeles, supra, 173 Cal.App.4tti at pp. 25-30,92 Cal.Rptr.3d 441.) In ttiis case, however, the Ellis Act does not apply because more than five years have elapsed since the former residential rental units were demolished on the site. •1410 D. As Applied to the Project in Condition 10, Section I l.C's Requirements Conflict With and Are Preempted by the Coata-Hawkins Acl The Legislature in the Costa-Hawkins Ad clearly stated that "[njotwittistanding any other provision of law," ail residential landlords may, except in specifled situations, "estabUsh the initial rental rate for a dwelling or unit" (Civ.Code, § 1954.53, subd, (a).) Sedion ll.C, on flie oflier hand, requires Palmer to provide 60 affordable housing units at regulated rent levels that must be preserved for the Ufe of the dwelling units or 30 years, whichever is greater. 7 A local ordinance is " 'contradidoiy' to general law when it is uiimical ttiereto." (Sherwin-Williams Co. v. City of Los Angeles, supra, 4 Cal.4th at p. 898, 16 Cal.I^.2d 215, 844 R2d 534.) We find sedion ll.C's affordable housing requirements to be hostile or inimical to Civil Code section 1954.53 by denying Pahner die right to establish the initial rental rates for the affordable housing units that are required to be built under section 1 l.C, and by preserving their regulated rent levels for 30 years or the Ufe of tiie units, whichever is greater. Although the Costa-Hawkins Act does not apply when "[t]be owner has otherwise agreed by contrad witii a public entity [to build affordable housing] in consideration for a dired finandal contribution or any other forms of assistance specified in Chapter 4.3 (commencing with Section 65915) of Division 1 of Title 7 of tiie (joverament Code" (Civ.Code, § 1954.53, subd. (a)(2)), there is no such agreenient in this case. Because Palmer has refiised to build affordable housing units undter any circumstances, the issue is whether requiring Palmer's involuntary compliance with section ll.C's affordable housing requirements is hostile or inimical to Palmo-'s right under ttie Costa-Hawkins Act to estabUsh fhe initial rental rates for ttie projea's dwelUng units. We conclude that it is. Under ttie plain meaning rule of statutoiy constmction, if the language of the statute " 'te clear and unambiguous our inquiiy ••SS? ends. There is no need for judicial constmction and a court m^ not mdutge in it [Citation.] "ff there is no ambiguity in flie language, we presume flie Legislature meant what it said and the plain meaning of the statute govems." [Citation,]' (Diamond Multimedia Systems, Inc. v, Superior Court (1999) 19 Cal.4tti 1036, 1047 [80 Cal.Rptr.2d 828, 968 R2d 539].)" (El Dorado Palm Springs, Ltd. v. City of Palm Springs (2002) 96 Cal.App.4Ui 1153, 1161, 118 CaI.Rptr.2d 15.) Applying fliis rule to Civil Code section 1954.53, subdivision (a), we find that it is clear and unambiguous. According to its plain language, the Costa-Hawkins Act provides in Painter/Sixth Street Properties, L.P. v. City of Lo. 175 Cal.App.4th 1396 96 Cal.Rptr3d 875.09 Cal Daily Op. Serv. 9321, 2009 Dally Journal D.AR. 10.859 relevant part that, "[nlotwifhstanding any other provision of law," aU residential landlords may, except in specified •1411 situations, " estabUsh the initial rental rate for a dwcUmg or unit" (Civ.Code, § 1954.53, subd. (a).) Forcing Palmer to provide affordable houshig units at regulated rents in order to obtain project approval is clearly hostile to flie right afforded under the Costa-Hawkins Ad to establish the initial rental rate for a dweUing or unit The City argues ttiat sedion ll.C does not confUct with ttie (}osta-Hawkins Act because section 1 l.C is not a rent control statute fliat governs the entire rental housing maikct According to the City, section II.C docs not violate the Costa-Hawkins Act because it simply mandates either the r^lacement ofthe 60 affordable units that were demolished on the projed site in 1990, or the payment of an in Ueu fee. We are not persuaded. Section ll.C must be read in conjunction with section 11.E, which dir^y confUcts with the Costa-Hawkms Ad's vacancy decontrol provisions by imposmg rent restrictions on the units required to be buUt under section 1 I.e. Not only does section ll.E clearly restrict the initial rents for those units, but it imposes deed restrictions to control the rents "for the life of the dwelUng units or for 30 years, whichever is greater." Accordingly, it is plain that the Plan imposes rent restrictions that conflid with and are inimical to the Costa-Hawkins Ad, even if those restrictions ajiply only to a portion of the residential units within the projed and does not control the r^ts for the entire project The City fiirflier argues that sedion U.C's in lieu fee provision does not conflict with the Costa-Hawkins Ad, which does not mention impad fees, hi our view, however, the in Ueu fee provision does not eluninate the conflid between flie Costa Hawkins Ad and the Plan's affordable housing requirements. Although the fee option provides an altemative to the Plan's affordable housing requirements, because the fee amount is based solely on the number of affordable housmg units that a developer must provide under flie Plan, flie Plan's affordable housmg requirements and in lieu fee option are inextricably intertwined. The objective of section ll.C is not to impose fees, but to impose affordable housing requiremenls that may be satisfied by paying fees that ttie City concedes are "/n lieu of the set-aside provisions, not ttie other way around" 13 Because the affordable housmg requirements confUd with and are inimical to the C^sta-Hawkins Act, ii necessarily foUows that the in lieu fee provision, which e,\ists only within the context ofthe preempted affordable ••SSS housing requirements, is also preempted by the Act •1412 FmaUy, the City asserts that because Palmer has the option of buUding fewer than 10 units per lot, which would remove the projed from tiie scope of section ll.C's affordable housing requirements, there is no conflid between the affordable housing requirements and the Costa-Hawkins Act This contention ignores the fad that because the projed complies with appUcable zonmg laws. Palmer has no heed for a density bonus or other assistance in retum for compiyiD$ with sedion ll.C's affordable housing requirements. That Palmer could avoid sedion ll.C's requirements by Umiting the number of residential units per lot does not eliminate flie confUct fliat exists between the Plan and the Ad. UL The In Lieu Fee Pro^rion Is Not Sevembte 8 9" 'Although not conclusive, a severabUity clause nomially calls for sustaiiung flie vaUd part of the enactment, especially when the invaUd part is mechanicaUy severable.... Such a clause plus the ability to mechanicaUy sever the invalid part while nomially allowing severabUity, does not conclusively dictate it The final detenmnation depends on whether the remamder... is complete in itseff and would have been adopted by ttie legislative body had the latter foreseen the paitial invalidity of the statute ... or constitutes a completely operative expression of the legislative mtent... [and is not] so connected with fhe rest of the statute as to be inseparable.' (Santa Barbara Sch. Dist. v. Superior Court (1975) 13 Cal.3d 315, 331 [118 Cal.Rptr. 637, 530 R2d 605]Metromedia, Inc. v. City of San Diego (1982) 32 Cal.3d 180, 190 [185 Cal.Rptr. 260, 649 R2d 902].) (Interior quotation marks and citations omitted.)" (Calfarm Ins. Co. v. Deukmejian (1989) 48 C:al.3d 805, 821,258 Cal.Rpfr. 161,771 P.2d 1247.) 10 The City altematively contends that under ttie Plan's severability clause,!4 the valid portion of the Plan's in Ueu fee {provision should be severed from any invalid portion of thc Plan's affordable housing requirements. The severabUity clause does not apply, however, because, for the reasons previously stated, the in Ueu fee provision is inextricably intertwined with the invaUd portion of ttie Plan's affordable housing requirements. Severing the invaUd m Ueu fee provision fi'om the invaUd affordable housing requirements would serve no usefiil puipose. i s •1413 DISPOSITION The judgment is affirmed. Palmer is awarded its costs on appeal. We concur: WDLLHITE, Acting P.J., and MANELLA, J. Parallel Citations 175 Cal.App.4tti 1396, 09 Cal. DaUy Op. Serv. 9321, 2009 DaUy Journal D.AR. 10,859 Pafrher/Sixth Street Properties, L.P. v. City of Lo, 175 Cai.App.4th 1396 96 Cal.Rptr.3d 875.09 Cal Daily Op. Serv. 9321, 2009 Daily Joumal D.AR. 10,859 Footnotes I The Plan defines a "prvjocT as "[tihe coiutniction, erection, addition to or attenitioa ofany twitding or stnicture, or a use of land or change of use on a 101 Iocat«d in whole or in part witfab the Specific Plan area, which requires the issuance ofa grading pennit, foundation permit, building permit, sign permit or use of land pennit after the effecttve date ofthis Specific Plan. A Project does not include remodeling ofa building which does not increase the number of Trips;, as detennined in writing by the Depaitment of Transportation, or docs not increase thc Qoor area." (Plan, § 4, Definitions.) Tbe Plan defines a "mixed use" prcycct as "[n]ny Project which cond>incs a commercial use with a residenfial use, either in the same building or in separate buildings on the same lot or tots." (Plan, § 4, Definitions.) Although the Plan also imposes affordable housing requirements on coimnercial and industriai projects, those requirements are ticyond the scope ofthis opinion, which is limited to the mixed use project at issue. Section 11 .C.2.e states that "[mjultiple-family residential Projects consisting of 10 dwelling units or fewer shall be exempt from the requirements ofthis Sutxiivision." In its opening brief, the City described the Area's need for affordable housing aa follows; "Before adopting fhe Specific Plan, the Ci^ conducted a study regarding the need for affordable housing in tbe Specific Plan area. Thc study concluded thai fi'om 1984 to 2010 more than 50% ofthe households in the Spedfic Plan Area had, and would continue to have, income below $10,000 per year. Aa of1980, that income level wa.<« conxidcred to be 'helow the poverty level.* Baned on these and other facts, the City determined that tiie 'provision of affordable housing is critical to both protection of the existing residential community and balancing hou«ng costs with employment income.' [f| Tbe City also found that demolition of affordable housing in the Specific Plan area was creating i very serious problem. 'Acceding to Rent Stabilization Division records, between 19S4 and 1990,1,233 rental units have been demolished.' A study ofthe actual conditions on the ground revealed that the problem was even more dire: the 'housing slock ha[d] declined by one-third, or more than twice as much as demolition pennit figures indicate.' " (Record citations omitted) The Plan defines a "low income dwelling unit" as a unit that *'is rented or sold to and occupied by persons or families whose annual income does not exceed 80% ofthe median annual income for persons ar families residing in the Los Angeles Standard Metropolitan Statistical Area." It defines a "very low income dwelling unit" as a unit that is rented or sold to and occupied by those "whose annual income does not exceed 50% ofthe median annual income." Section 11.0.3 authorizes the city council to grant administrative relief from section I l.C's replacement dwelling unit requirements, either underthe terms of specified earthquake hazard reduction ordinances, or*4n cases of extreme hardship duly established tothe satistadion of the City Council." A density bonus is an ntcentiye, in the form ofa density increase, which local governments provide in return for a developer's voluntary inclusion of affordable housing units within a project (Sec Gov.Code, §§ 65915-65918.) The term "density bonus" is defined in Govemment Code section 65915, subdivision (f) as '^a density increase over the otherwise maximum allowable residential density as of the date of application bythe applicant to the city, county, or city and county. The applicant may elect to accept a lesser percentage of density bonus. The amount of density bonus to which thc applicant is entitled shall vary according to the amount by which the percentage of affordable housing units exceeds the percentage established in subdivision (b)." Section 11 .C.2.f.(l) states that "[a] Project Applicant for a multiple-family residential or Mixed Uso Project subject to the requirements of Subsection C.Z.a.(2) ofthis Section shall I>e eligible Cor a density bonus." The Costa-Hawkins Act provides that the Act "does not a^^ly where the owncr has otherwise agreed by contract with a pubtic entity in consideration for a direct financial contribution or any other Torms of assistance i^ecified in Chapter 4.3 (commencing with Seclion 65915) of Division 1 of Title 7 ofthe Govemment Code." According to thc record, the "in iieu" fee was adjusted in 2006 to $122,632.02 for very low income dweUing units, and $96,182.17 for low ^mir' income dwelling units. •vVr»stlawNexl €• 2010 Thorn.<ion R^?iiirrs-Wesl No Ciann ii-Oiici US Gov' Works Painfer/Sixth Street Properties, L.P. v. City of Lo, 175 Cai.App.4th 1396 96 CalRptr.Sd 875, 09 Cal Daily Op. Serv. 9321.2009 Daily Journal D.AR. 10,859 Condition 10 also relaxed some of section 11 .Cs requirements. For example, section 11 .D. I .a specifics that fyr mixed use projects, at least 30 percent ofthe required replacement dwelling units must be two bedrooms or laiger, and section 11.D.3 states that a mnnmum of 30^ percent of the required low income dwelling units shall be two bedrooms or larger. However, condition 10 stated that 'Notwithstanding Section 11.D.3 ofthe Centra] City West Specific Plan to the contrary, the Low Income Dweiling VnHts provided on-site may be composed of: studio apartments, 1-bedroom apartments, and/or 'dual master' apartments." 10 !2 13 14 15 Palmer also filed a concurrent federal district court action that, according to Palmer's respondent's brief, involves "essentially the same constitutional claims as wore asserted in Pabner's Superior Court Complaint." According to Palmer, the federal action was stayed pending the outcome ofthis actioa ACORN and SCANPH have filed an amicus brief in this appeal in support ofthe City. Palmer has filed a response to their brief Additionally, Palmer aigued that section 11 .C's affordable housing requirements violated the Mitigation Fee Act because it "prohibits a local agency from imposing an exaction (here, thc [rqfilaccment dwelling provisions] requiring the setting aside or building of 60 affordable units orthe payment of in iieu fees of $96,182.17 per unit) as a condition of ipproval of a local developmem project, unless the tocal agency makes a determination thai there is: (i) 'a reasonable relationship between the fee's use and &e type of development project on which the fee is imposed' [Gov.Code, g 66001, subd. (aX3)}; [HI (ii) 'a reasonable relationship belween the need for the public faciUty and the type of dgvttlopntentproject on which the fee is imposed' [Gov.Code, § 66001, subd. (8X4)]; and/or HQ (iii) *[«] reasonable relationship between fte amount oflhe fee and the cost o/*the publicfadlity attributable to the devetopment on which the fee is imposed' [Gov.Code, § 66001, subd. (b) ].' (Emphasis added.)" The trial court did not reach this issue. The City ai^es that focusing on the fact that the in lieu fee provision follows the set-aside provision "does nothing more than elevate fonn over substance. It contends the ordinance would not violate tbe Costa-Ha^^kins Act ifthe set^aside provision were an in lieu option to the fee. We are nol persuaded. The only way the builder could avoid the fee would be to permit itself to be bound by a set-aside provision that is illegal under the Act. Thus, the fee would still exist as part of an overall plan that is preempted by the AcL Section 18 ofthe Plan provides: "If any provision ofthis Specific Plan orthe application thereof to any person, property or circumstances, is held invalid, thc remainder ofthis Specific Plan orthe application of such provisions to other persons, property or circumstances shall not be affected." Iniightof our determination that the in lieu fee option is preempted by the Costa-Hawkins Act, we need not reach the City's remaining contention that the fee option docs not violate the Mit^tion Fee Act End of Document ^ 2010 Thomson Reuters. No claim to original U.S. Government Work.s. CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE December 4, 2009 TO. PLANNING DIRECTOR FROM: CITY ATTORNEY Decision Overturning tlie City of Patterson's Affordable Housing Fee Withstands Petition to U.S. Supreme Court Earlier this year, in Building Industry Association of Central Califomia v. City of Patterson^ the Califomia Court of Appeal struck down a local affordable housing requirement imposed on residential development. The Califomia Supreme Court decided itf June 2009 not to take the case, and the United States Supreme Court has now similarly retiised to intervene. The Court of Appeal's decision therefore stands as an important limitation on the powers of cities and counties to adopt affordable housing requu-ements. The case centered on a Development Agreement between the City of Patterson and a homebuilder conceming two residential subdivisions. When the City approved the Agreement, residential developers were requured to pay a fee of $734 per house in Heu of building affordable housing. The homebuilder knew that the City was considering whether to raise the fee and agreed to pay an increased tee in an amount that was "reasonably justified." The City subsequently raised the fee to $20,946 per house and the homebuilder sued. The Court of Appeal invalidated the new fee, finding it was not "reasonably justified." The Court mterpreted this term in light of the constitutional test articulated by the CaUfomia Supreme Court in San Remo Hotel v. City and County of San Francisco for evaluating local ordinances that impose exactions on new development. This test examines whether the exaction bears a "reasonable relationslup, in both intended use and amount, to the deleterious pubHc impact of the development.*' Applying this test, the Court found there was no reasonable relationship between the City's affordable housing fee and the new homes that would be built. In particular, the City's fee was based on the costs of meeting the City's existing affordable housing needs, the record showed no connection between these pre-existing needs and the demand, if any, for affordable housing that the new homes would create. This case raises serious questions about the propriety of imposing affordable housing requirements on residential developments and shows that cities will be subject to constitutional scrutiny when they adopt uniformly applicable affordable housuig fees. Our City's in-lieu fee is currently $4,950 per unit, wWchwas reduced from the previous fee of over $30,000 per unit. Therefore, I do not anticipate any challenges. However, if Carlsbad does receive a challenge, we would need to do a new comprehensive nexus study to justify the fee. ^ JANE MOBALDI Assistant City Attorney kr cc: Housing & Development Director Community Developraent Director Page 2 of 12 Westlaw 171 Cal.App.4th 886,90 CaI.Rptr.3d 63,09 Cal. Daily Joumal D.A.R. 3029,2009 Daily Journal D.A.R. 3168, 4327 (Cite as: 171 Cal.App.4th 886,90 Cal.Rptr.3d 63) H Court of Appeal, Fifth District, Califomia. BUILDING INDUSTRY ASSOCIATION OF CENTRAL CALIFORNIA et al.. Plaintiffs and Ap- pellants, V. CITY OF PATTERSON, Defendant and Respond- ent. No. F05478S. Jan. 30,2009. Certified for Partial Publication."^* FN* This opinion should be published in the Official Reports wifli tiie exception of parts I. and II.B. As Modified March 2,2009. As Modifled on Denial of Rehearing Mar. 20,2009. Review Denied June 17,2009. Bacl^round: Afler an increase In the aifordable housing fee applicable to its subdivisions, de- veloper flled a complaint and writ petition against city for alleged violations of its vested property rights, its contractual rights under the development agreement, various statutory provisions, and consti- tutional provisions requiring voter approval of spe- cial taxes. The Superior Court, Stanislaus County, No. 610611,David G. Vander Wall, J., entered judgment for city. Developer appealed. Holdings: The Court of Appeal, Dawson, J., held tiiat: (1) city's approval of conditional vesting tentative map did not confer any rights beyond those in de- velopment agreement; (2) development agreement did not require city to continue to use "leverage" method of analysis it had used in past; but (3) "reasonably justified," in development agree- ment, meant fliat any increase io affordable housing in-Ueu fee would conform to existing law; (4) existing law would require reasonable relation- Page 1 Op. Serv. 2617,2009 Daily Joumal D.A.R. 3027,2009 Daily 2009 Daily Joumal D.A.R. 3170,2009 Daily Journal D.A.R. ship between amount of increased fee and deleteri- ous public impact of development; and (5) affordable housing fee based on city's total need was not "reasonably justified." Reversed and remanded with directions. West Headnotes [1] Zoning and Planning 414 C=>472.5 414 Zoning and Planning 414Vin Permits, Certificates and Approvals 4I4VIII(D) Effect of Determination; Revoca- tion 414k472.5 k. Tentative or Preliminary Approval of Map, Plat, or Plan. Most Cited Cases Vested rights protection extends to a property own- er who has obtained a vesting tentative map. West's Ann.Cal.Gov.Code § 65961. [2] Zoning and Planning 414 €>^472.5 414 Zoning and Planning 4l4Vin Permits, Certificates and Approvals 414Vni(D) Effect of Determination; Revoca- tion 4I4k472.5 k. Tentative or Preliminary Approval of Map, Plat, or Plan. Most Cited Cases City's approval of a vesting tentative map for de- veloper's subdivisions subject to the condition that, in the event of a conflict between flie development agreement and the vesting tentative map, the terms of the development agreement would control, did not confer any vested rights protection against the imposition of additional fees beyond the protection provided for in the development agreement; if an increased fee was authorized by the development agreement, it would not offend the rights estab- lished by die approval of the vesting tentative map. West's Ann.Cal.Gov.Code § 65961. [3] Zonuig and Plannuig 414 €=^382.4 414 Zoning and Planning © 2009 Thomson Reuters. No Claim to Orig. US Gov. Works. http://web2.westiaw.com/print/printstream.aspx?utid=2&sv=Split&prft=HTMLE&mt==C... 12/07/2009 CITY OF ^CARLSBAD CONFIDENTIAL ATTORNEY CLIENT PRIVILEGE December 7, 2011 To: CITY PLANNER AND PLANNING COMMISSION MEMBERS From: CITY ATTORNEY Re: HONCHARIW V, COUNTY OF STANISLAUS (2011 WL 5517010) "ANTI-NIMBY LAW" In a decision interpreting a long standing statutory provision, the Fifth District Court of Appeal ruled that Stanislaus County erred when it denied a residential development but did not make findings under Government Code section 65589.5(j). Government Code section 65589.5 is known as the Housing Accountability Act {§65589.5, subd. (o)) ("Act"), and has been referred to colloquially as the "Anti-NIMBY law". The purpose of the statute is to limit the ability of local governments to "reject or make infeasible housing developments.-.without a thorough analysis of the economic, social, and environmental effects of the action..." (§ 65589.5, subd. (b)}. Subdivision (j) of the statute provides that [w]hen a proposed housing development project complies with applicable, objective general plan and zoning standards and criteria, including design review standards, in effect at the time the housing development project's application is determined to be complete, a local agency which proposes to disapprove a project shall base its decision regarding the proposed housing development project upon written findings supported by substantial evidence on the record that (1) the housing development project would have a specific, adverse impact upon the public health or safety unless the project is disapproved and (2) there is no feasible method to satisfactorily mitigate or avoid the adverse impact otherthan disapproval ofthe housing development project. Subdivision (h) of section 65589.5 defines the term "housing development project" as: "(A) Residential units only. (B) Mixed-use developments consisting of residential and nonresidential uses in which nonresidential uses are limited to neighborhood commercial uses and to the first floor buildings that are two or more stores... (C) Transitional housing or supportive housing." City Attorney 1200 Carlsbad Village Drive I Carlsbad, CA 92008 I 760-434-2891 I 760-434-8367 fax I www.carlsbadca.gov Page 2 In this case, the applicant proposed to subdivide 33.7 acres into eight lots, one of which had an existing residence. The existing residence was served by public water; the other lots would be served by private wells. The applicant also requested an exception to the local subdivision regulations that require lots connect to a public water system when available. The Planning Commission denied both the subdivision and exception applications. On appeal, the Board of Supervisors followed suit, making findings under the local subdivision regulations and the Subdivision Map Act that the project site was not physically suitable for the proposed lot development. Neither the Planning Commission's nor the Board of Supervisor's denials were supported by findings under GC §65589.5(1) of the Housing Accountability Act which requires detailed findings when a housing development project complies with applicable objective general plan and zoning standards but the decision maker denies the project or conditions the project to reduce its density. The County argued that no findings were required under §65589.5(j) because the rest of the statute addressed affordable housing. Therefore, paragraph (j) only pertained to such housing. Reviewing the plain language ofthe statute and the legislative history from its first enactment in 1982, the court agreed that the rest of the §65589.5 focused on affordable housing. By contrast, the language of this section (j) was clear and unambiguous and not limited to affordable housing projects. Therefore, the County should have made findings under §65589.5(j) when it denied the project. The court also rejected the County's argument that the project was noncompliant with the public water system connection requirement, stating that the related finding was not supported by evidence in the administrative record. This case Is an excellent reminder that any "housing development project" which comports with applicable objective general plan, zoning and design standards should not be denied or reduced In density without the requisite findings of a specific adverse impact and no feasible method to satisfactorily mitigate or avoid that impact. If you have any questions regarding the above, please do not hesitate to contact me. JANE MOBALDI City Attorney /rn Council Priority Projects C CITYOF ^ CARLSBAD FY 11/12 Priority Goal/Project Title status Responsible Dept. Team Leader Current Milestone Complete Estimated Project Completion ECONOMIC DEVELOPMENT Partner with property owners in the Village to create a "Main Street" type program to spur local investment and foot traffic. CURRENT MILESTONE: Initial phase complete. Successor agency has awarded agreement to Urban Places. NEXT MILESTONE: Urban Places scheduled to update Council in 6 months on progress. CM J.Coates Mar. 2012 Mar. 2012 * Launch a business attraction and retention program. CURRENT MILESTONE: Outreach visits ongoing; 6 of 12 leadership meetings complete; 21 of 50 staff visits complete; update data on business visits and add to attraction plan. NEXT MILESTONE: Attend SDNEDC Board retreat and work with North County cities and SDNEDC to address regional economic deveiopment; develop foilow-up matrix for business visits. CED K. Dodson Apr. 2012 June 2012 * streamline city processes to support faster turnaround times & more efficient handling of business requests: * - Development Review Process Recommendations CURRENT MILESTONE: Landscape Manual Update completed. "Decision Making Level" proposed amendments to Titie 21, Zoning tentatively scheduled for CC hearing in April 2012. Preparing "Decision Making Level" proposed amendments to Title 20, Subdivisions, for CC consideration by end of fiscai year. NEXT MILESTONE: Distribute, train staff, and implement new Landscape Manual. Submit "Decision Making Level" Titie 21 LCP amendments to the CCC for review and approval in Mav/June Aor 2012. CED G. Barberio Apr. 2012 Jun. 2013 * - Prop D Implementation - CCC Process CURRENT MILESTONE: LCPA application submitted to California Coastal Commission in 07/11. Achieved "complete status" on LCPA submittal to CCC in September 2011. CCC continued application for up to one year at their September hearing. Meet with CCC staff to work out application issues. NEXT MILESTONE: LCPA scheduled for CCC Hearing. CED G.Barberio Apr. 2012 Dec. 2012 * - Business License Process Streamline CURRENT MILESTONE: Complete flow chart for business license process. Document and streamline process and set performance standards. NEXT MILESTONE: Implement process improvements and performance standards. CED K. Dodson May 2012 June 2012 = FY 11/12 Priority 3/20/2012 1 of 7 <4C CITY OF ^ CARLSBAD Council Priority Projects FY 11/12 Priority Goal/Project Title Status Responsible Dept. Team Leader Current Milestone Complete Estimated Project Completion - Car Country Carlsbad Working Group CURRENT MILESTONE: Work pian and schedule to implement CC's recommendations prepared and submitted to CM. Set up meeting with Car Country representative group to explain city work plan. Start implementation of CC direction. NEXT MILESTONE: Implement CC direction from Jan 11, 2012 workshop. CED G. Barberio Mar. 2012 TBD * Expand the amount and quantity of useful city information available to businesses: * - Economic Development Communications Plan CURRENT MILESTONE: Track website visitation from May 2011; publish Sth newsletter. NEXT MILESTONE: Work with communications to expand city brand to meet attraction pian needs. CED K. Dodson Apr. 2012 June 2012 Proposed Power Plant - Power Plant State permitting CURRENT MILESTONE: CEC issues preliminary decision Mar. 21 NEXT MILESTONE: Public Hearing in Carlsbad Apr. 19 PEM J.Garuba Mar. 2012 Apr. 2012 Westfield Lease and Project Review CURRENT MILESTONE: City offer presented to Westfield, waiting for response. NEXT MILESTONE: If Westfield accepts; prepare draft agreement PEM J. Garuba Mar. 2012 TBD * Envision Carlsbad Phase II - Generai Plan Update CURRENT MILESTONE: Report to EC3, PC & CC results of concept plan workshops and community feedback in March and April 2012. NEXT MILESTONE: Develop Preferred Land Use Pian and report to PC & CC in June of 2012. CED G. Barberio Apr. 2012 Dec. 2013 FINANCIAL HEALTH * Streamline city operations to ensure balanced budget & most efficient use of resources: CURRENT MILESTONE: Complete operational assessment for Parks and Recreation Department. NEXT MILESTONE: Review Parks and Recreation recommendations. Complete operational assessment for Transportation department. CM CMT May 2012 Ongoing * Complete a plan to maximize the value & use of city- owned real estate CURRENT MILESTONE: Prepare guiding principles and send memo to City Manager. NEXT MILESTONE: Prepare draft report and return to Council for review. PEM J. Garuba Mar. 2021 May 2012 Golf course operational improvements to reduce operating subsidies = FY 11/12 Priority 3/20/2012 2 of 7 Council Priority Projects •A <\C^^ CITY OF ^ CARLSBAD FY 11/12 Priority Goal/Project Title Status Responsible Dept. Team Leader Current Milestone Complete Estimated Project Completion * - Dedicated players lounge CURRENT MILESTONE: Construction. NEXT MILESTONE: Compietion. Due to a minor construction delay the project completion date has moved to April. PARKS & REC C. Hazeltine Mar. 2012 Apr. 2012 * - 18th hole green redesign CURRENT MILESTONE: Construction. NEXT MILESTONE: Completion. PARKS & REC C. Hazeltine Mar. 2012 May 2012 Constituent Relationship Management Program CURRENT MILESTONE: Evaluate CRM proposais and negotiate with vendor; secure services of external project manager. NEXT MILESTONE: Implement Phase 1 of Call Center. CM J. Coates Mar. 2012 Nov. 2012 Maintenance and Operations Center Construction CURRENT MILESTONE: Re-evaluation of program space needs pending Best Value Services review of maintenance departments. NEXT MILESTONE: Retain Bridging Consultant to prepare program, performance specification and approved planning documents. PEM P. McGarry TBD TBD Desalination Plant Review CURRENT MILESTONE: Enter Reimbursement Agreement with Poseidon. NEXT MILESTONE: Determine amount of desal water to be purchased as a local supply UTILITIES G. Pruim Mar. 2012 Mar. 2012 Human Capital Management System CURRENT MILESTONE: Roll out Cybershift timekeeping to all remaining City departments. NEXT MILESTONE: Identify and prioritize all activities included in Phase II ofthe HCMS project. HR J. Clark July 2012 Aug. 2012 Hydro Electric Project CURRENT MILESTONE: Awaiting proposal from power purchase provider on alternatives for all four CWA aqueduct connections. Content of proposal wiil guide staffs future recommendation. NEXT MILESTONE: Finalize design, obtain FERC approvai and advertise project for bids. UTILITIES B. Plummer Mar. 2012 Dec. 2012 TRANSPORTATION AND aRCULATION * improve traffic flow by upgrading & synchronizing all traffic signals on major thoroughfares throughout the city, beginning with Palomar Airport Road and El Camino Real. CURRENT MILESTONE: Aviara, Poinsettia, Cannon, College and Rancho Santa Fe linked to Traffic Management Center NEXT MILESTONE: Remaining signals linked to Traffic Management Center. TRANSPORTATION D.Bilse Dec. 2012 July 2013 * Install lighted, pedestrian friendly crosswalks along Carlsbad Boulevard in the Village & other areas with heavy foot traffic. CURRENT MILESTONE: Present staff recommendations from the TSC and other opportunities to enhance pedestrian mobility in Viiiage area to CC. NEXT MILESTONE: Prepare preliminary design based on CC direction. TRANSPORTATION B. Jones Apr. 2012 Oct. 2012 = FY 11/12 Priority 3/20/2012 Sof 7 Council Priority Projects << CITYOF CARLSBAD FY 11/12 Priority Goal/Project Title Status Responsible Dept. Team Leader Current Milestone Complete Estimated Project Completion PARKS, OPEN SPACES AND TRAILS Alga Norte Community Park: - Finalize Alga Norte Park operating plan CURRENT MILESTONE: RFP draft currently being reviewed and will be distributed in March 2012. NEXT MILESTONE: Pre-submittal meeting April 2012. PARKS & REC C. Hazeltine Mar. 2012 May 2012 - Construct Alga Norte Park CURRENT MILESTONE: Select Design/Builder - present recommendation to Council for approval. NEXT MILESTONE: Execute contracts and initiate construction. PEM P. McGarry Apr. 2012 Dec. 2013 * Create new coastal land for recreation & economic deveiopment by completing iand exchange w/ the state for the Manzano property & realigning Carlsbad Blvd.: CURRENT MILESTONE: Work with consultant team to complete complete initial evaluation and appraisal of city/state lands . NEXT MILESTONE: identification of lands to be exchanged. CM C.Haas Mar. 2012 Ongoing * Carlsbad Blvd. Preliminary roadway design and environmental review to facilitate land exchange CURRENT MILESTONE: Prepare preliminary base maps. NEXT MILESTONE: Submit 6f application to Dept. of interior for consideration TRANSPORTATION S. Hammann Apr. 2012 Dec. 2013 Expand the amount of open space & trails in the city through active monitoring of potential acquisition sites and partnering with others, where possible, to leverage taxpayer funds. CURRENT MILESTONE: Considering two new trails projects in FY 2012-13 CIP. NEXT MILESTONE: Scheduled fourth of on-going quarterly meetings with appropriate staff. PARKS 8i REC C. Hazeltine Apr. 2012 Ongoing - Lake Calavera Master Plan Implementation CURRENT MILESTONE: Construction documents compieted; continue to await for agency permits. NEXT MILESTONE: Start construction of boardwalk (contingent on agency permit success). PARKS & REC L. Ketabian Mar. 2012 Aug. 2012 New restrooms at Pine Park CURRENT MILESTONE: Prefabricated building under construction. NEXT MILESTONE: installation of buiiding. PARKS & REC M. Steyaert Apr. 2012 June 2012 BALANCED COMMUNITY DEVELOPMENT * Housing Element Program implementation CURRENT MILESTONE: Writ of Mandate in Friends of Aviara lawsuit discharged by court on 01/23/11; F of A has appealed court decision on original ruling. Ord amendments re: transitional/supportive housing, farmworker housing, managed living units, and emergency shelters to PC hearing in April of 2012. NEXT MILESTONE: CC hearing for various programs above, implement various programs in adopted Housing Element. CED D. de Cordova Apr. 2012 Apr. 2013 * _ = FY 11/12 Priority 3/20/2012 4 of 7 <^ «2-> CITY OF ^ CARLSBAD Council Priority Projects FY 11/12 Priority Goal/Project Title Status Responsible Dept. Team Leader Current Milestone Complete Estimated Project Completion ENVIRONMENTAL MANAGEMENT Agua Hedionda dredge project CURRENT MILESTONE: Submit finai permitting plans to Resource Agencies for permit processing. NEXT MILESTONE: Council approve plans and authorize project advertisement. UTILITIES G. Pruim Mar. 2012 Nov. 2012 Solid waste strategy and contracts CURRENT MILESTONE: Co-deveiop outreach plan with Waste Management for roll-out of new services NEXT MILESTONE: New services go into effect. UTILITIES C. Ruess Apr. 2012 July 2012 Vista-Carlsbad interceptor CURRENT MILESTONE: Obtain resource agency permits and acquire easements. Finalize plans, specs and estimates, and receive Council approval to advertise. NEXT MILESTONE: Construct Vista-Carisbad Interceptor. UTILITIES T.Smith Sept. 2012 Dec. 2014 Sewer Master Plan CURRENT MILESTONE: Prepare DEIR. NEXT MILESTONE: Adopt MND. UTILITIES T.Smith Jun.2012 Oct. 2012 SAFE COMMUNITY Safety Training Center: - Construct Safety Training Center CURRENT MILESTONE: Under construction - completion scheduled for 1st Qtr. 2012. NEXT MILESTONE: Deliver project to owner for operation. TRANSPORTATION P. Vaughan Mar. 2012 Mar. 2012 - Prepare Operations Plan CURRENT MILESTONE: Plan submitted to City Manager for review. NEXT MILESTONE: Finalize operations plan and budget. PEM J. Garuba Mar. 2012 Apr. 2012 Fire Station 3 relocation CURRENT MILESTONE: Obtain Planning Approval. NEXT MILESTONE: Building Permit Approval. PEM P.McGarry Apr. 2012 Late Fall 2013 WATER----.. Water Master Plan CURRENT MILESTONE: Prepare DEIR. NEXT MILESTONE: Adopt MND UTILITIES B. Plummer Jun. 2012 Oct. 2012 Recycled Water Master Plan CURRENT MILESTONE: Prepare DEIR NEXT MILESTONE: Adopt MND UTILITIES D.Ahles Jun. 2012 Oct. 2012 * = FY 11/12 Priority 3/20/2012 Sof 7 Council Priority Projects <jr^: CITY OF ^ CARLSBAD FY 11/12 Priority Goal/Project Title Status Responsible Dept. Team Leader Current Milestone Complete Estimated Project Completion Recycled Water Phase III Feasibility Study and North County Cooperative Use Project CURRENT MILESTONE: Preparing consultant agreement to prepare Feasibility Study and Environmental Assessment required for Bureau of Reclamation grant eligibility. This effort wiil be cost shared by 10 North County water agencies. NEXT MILESTONE: Consider recycled water sales arrangement with Vista Irrigation District to serve the Shadowridge Golf Course UTILITIES D.Ahles Apr. 2012 Jun. 2012 COUNCIL REQUESTS * Public/Private Compensation Survey CURRENT MILESTONE: Conduct in-depth review of total compensation for 25 - 30 city positions with private sector counterparts. NEXT MILESTONE: Outline best practices and alternatives to assist the City in reviewing market and internal equity; report on parity and disparity in the market(s) to the City Council. HR J.Clark Mar. 2012 Apr. 2012 * Design Pay for Performance Plan for CCEA- represented employees CURRENT MILESTONE: Continue to meet with labor/management committee to begin education and committee work. NEXT MILESTONE: Design a pay for performance plan that aligns what employees contribute to the organization with what they achieve for their efforts. HR J. Clark Apr. 2012 Dec. 2012 COMPLETED * Vacation Rentals CURRENT MILESTONE: Report completed and distributed to CM and CC. NEXT MILESTONE: Complete. CED D. Neu N/A Complete - Power Plant Land Use Amendments CURRENT MILESTONE: Draft text changes considered by PC on 09/07/11 and CC on 09/27/11. Final report on moritorium went to CC on 09/27/11. Second read of Ord occurred on Oct 11, 2011. NEXT MILESTONE: Compiete. CED D. Neu N/A Complete * - Development Services Manager Communications Plan CURRENT MILESTONE: Development of video explaining the role of the Development Services Manager underway. Video completed and available on city web. NEXT MILESTONE: Complete. CED M. Peterson N/A Complete La Costa Avenue Traffic Calming CURRENT MILESTONE: The interim measures and conceptual plans for the long-term vision for La Costa Avenue have been accepted by City Council. NEXT MILESTONE: Incorporate La Costa Avenue improvement Plan into General Plan Update process. TRANSPORTATION D.Bilse N/A Complete = FY 11/12 Priority 3/20/2012 6 of 7 Council Priority Projects <^ »i CITYOF ^ CARLSBAD FY 11/12 Priority Goal/Project Title Status Responsible Dept. Team Leader Current Milestone Complete Estimated Project Completion Landscape improvements to Pine Park (Madison Property) CURRENT MILESTONE: N/A NEXT MILESTONE: Project Completed. PARKS & REC M. Steyaert N/A Complete = FY 11/12 Priority 3/20/2012 7 of 7