Loading...
HomeMy WebLinkAbout2021-01-08; Housing Element Update - Status Report; Murphy, JeffTo the members of the: CITY COUNCIL Date l-6:-:2ICA ✓ CC ,(/ CM _!:'.ACM ~DCM (3).J:'.'.:. Jan. 8, 2021 To: From: Via: Re: Council Memorandum Honorable Mayor Hall and Members of the City Council Jeff Murphy, Community Development Director Gary Barberio, Deputy City Manager, Community Services Geoff Patnoe, Assistant City Manager @_ Housing Element Update -Status Report {city of Carlsbad Memo ID# 2021005 This memorandum provides information on the status of the Housing Element Update. Background Among other responsibilities, the California Department of Housing & Community Development (HCD) is responsible for developing state housing production goals. These goals represent the total number of housing units to be built within an eight-year housing cycle for varying income groups. The process of developing and assigning these housing units to local jurisdictions is referred to as the Regional Housing Needs Assessment (RHNA). As required under state law, jurisdictions throughout the state (including the city) have begun updating their respective Housing Elements to show how they intend to accommodate their housing obligations for the upcoming housing cycle. For the San Diego region, the housing cycle is April 2021 through April 2029. For more information on the RHNA process, please refer to the attached informational bulletin (Attachment A). In summary, the Housing Element provides the city with a coordinated and comprehensive strategy for promoting the production of safe, decent and affordable housing for varying income-levels within the community, including policies and programs on how it will accommodate its RHNA. The Housing Element itself is part of the city's General Plan and includes the following components: • An assessment of the demographics and housing needs in the city; • Review of accomplishments from the previous housing element; • An inventory and analysis of possible sites that could accommodate the RHNA; • Analysis of potential constraints on housing; and, • A listing of policies and programs to be implemented to meet required housing obligations. One of the most labor intensive and controversial components of the process is the inventory and analysis of sites that could be considered for meeting the city's RHNA. This is the portion of the Housing Element update process where sites are identified that could potentially Community Services Branch Community DeveloplTlent Department 163S Faraday Avenue I Carlsbad, CA 92008-7314 I 760-573-3927 t Council Memo -Housing Element Update -Status Report Jan. 8, 2021 Page 2 accommodate the city's assigned housing allocations, while also meeting HCD's minimum density requirements and strict site selection criteria. However, the inventory only reflects a collection of sites that could be considered for future housing opportunities. If the sites listed in the inventory need to be rezoned to accommodate the state's minimum density requirements, then a corresponding amendment to the jurisdiction's Land Use Element map of the General Plan is required along with the zoning amendment. Under state law, a jurisdiction is not required to have the rezonings completed at the time the Housing Element is due to HCD. The state gives cities up to three years to complete the necessary changes to their Land Use Element map (Government Code §65583(c}(l}(A)). Cities within the San Diego region are required under state law to adopt and submit their respective Housing Element to HCD for review and final approval by April 15, 2021. The city is on track to meet this deadline. While most cities elect to process updates to their Housing Element and Land Use Element map concurrently to save time and avoid certain state implications, the city will not be doing this concurrent processing for the reasons discussed below. Additional background is also available in the City Council Staff Report, dated Aug. 27, 2020 (Attachment B). Discussion A. Housing Element Update On Sept. 10, 2019, the City Council established the Housing Element Advisory Committee (HEAC), a nine-member committee made up of City of Carlsbad residents charged with the oversight of the Housing Element update effort. The HEAC held a total of 14 public meetings in 2020 where they and the public were educated on Housing Element law and HCD requirements, varying programs and policies that promote and encourage housing productions, minimum requirements of housing elements, and approaches and methodologies for site selection. On Nov. 19, 2020, a joint meeting of the HEAC and Housing Committee was held where a draft of the Housing Element Update was introduced. To provide additional time to review the document, meetings were then heJd on Nov. 30, 2020, and Dec. 3, 2020, to solicit input and comments from the HEAC and Housing Committee, respectively. On Dec. 14, 2020, the HEAC made their final comments/amendments to the draft Housing Element, endorsed the document and directed staff to submit the draft Housing Element to HCD for preliminary review. On Dec. 24, 2020, after revising the document to address comments from the HEAC, Housing Commission, City Attorney's Office, and outside legal counsel who specializes in Housing Element law, staff officially sent HCD the draft Housing Element. HCD has 60 days to review the document and provide preliminary feedback to the city on any deficiencies. City staff has been informally working with HCD staff over the past few months to get early Council Memo -Housing Element Update -Status Report Jan. 8, 2021 Page 3 input on the more complex and critical sections of the draft document; specifically, the sites inventory and sections covering impediments to fair housing. We are hopeful that these informal discussions will minimize the number of issues HCD raises with our draft and reduces their overall review time. The "Next Steps" section of this memo outlines the series of public engagement and public hearing milestones that remain for the Housing Element. B. Land Use Element Map Amendments There have been several factors affecting the processing schedule for amending the land use map. Some of the challenges that staff has experienced over the past year include delays in SAN DAG traffic modeling, difficulty confirming property owner interest in rezoning their property for housing, and compliance with new state housing laws, particularly those affecting the eligibility of housing sites. Additionally, as with many city functions and services, the pandemic has hindered our ability to utilize the more traditional "face-to-face" public engagement exercises and meetings that our community members have grown accustomed to over the years. While we have had a certain level of success with video conferencing, surveys and YouTube videos, the inability to talk to people and physically show maps impacted public participation. Also, COVID-19 related city priorities and needs have pulled staff away from this effort over the past year, which also adversely impacted the processing schedule. It was staffs intention to include the necessary rezonings (Land Use Element map amendments) as part of the Housing Element update. However, for the reasons specified above, staff were unable to timely identify appropriate sites and conduct the appropriate level of environmental review needed to provide the City Council with reasonable options for consideration by April 2021. The city, in collaboration with other jurisdictions in similar situations, SAN DAG and the League of California Cities, has petitioned the state to extend the Housing Element deadline by six months to solicit this needed public engagement and input. Unfortunately, HCD and the Governor's Office has not been supportive of any extension. As referenced above, while state law allows the rezoning to be completed three years after the official filing of the Housing Element, there are certain state implications that may affect the city's later processing of projects on the rezoned sites. All the sites to be rezoned, such as nonvacant sites identified in the prior Housing Element, vacant sites identified in the prior two Housing Elements, and all of the sites to be upzoned, must allow residential use "by right" at specified densities for housing developments in which at least 20% of the units are affordable to lower income households. "By right" means that, with certain exceptions (e.g. a subdivision map application), the city cannot require a discretionary permit as part of the housing project application or require review under the California Environmental Quality Act (CEQA). Design review is still permitted. Accordingly, it is important the city conduct detailed environmental review of each site before the rezoning is completed and adopt "objective" design standards and applicable mitigation measures. Council Memo -Housing Element Update -Status Report Jan. 8, 2021 Page 4 Next Steps The following are upcoming key milestones: April 6 April J.5 April 15 30-daypublic review of the diaftHousing.Element (track changes version included) Planning Commission hearing; public testimony and recommendation Housing Cornrnissic,n hearing;public testimony andrecornmeridation City Council hearing; public testimony and decision Housing Eleme11ts.ubmitted to HCD forfinal approval Staff will reinitiate mapping efforts to bring the rezonings to City Council by end of the year Attachments: A. Informational Bulletin: How new state mandates impact Carlsbad's Housing Plan B. City Council Staff Report, dated Aug. 27, 2020 (on file in the Office of the City Clerk): http://edocs.carlsbadca.gov/HPRMWebDrawer/RecordHTML/58600 I cc: Scott Chadwick, City Manager Celia Brewer, City Attorney Bob Vacchi, Assistant Director, Community Development Kristina Ray, Communication & Engagement Director Don Neu, City Planner Scott Donnell, Senior Planner Attachment A How new state mandates impact City of CARLSBAD'S HOUSING PLAN Carlsbad Since 1969, California has required that all cities and counties adequately plan for their share of the state's growing housing needs. While cities do not build housing -that is the function of private developers -they do adopt plans, regulations and programs that provide opportunities for how and where housing development occurs. One of the most important housing policy documents used by jurisdictions is the General Plan; more specifically, the Housing Element of the General Plan. The General Plan serves as the "blueprint"for how a city will grow and develop and includes seven state required elements: land use, transportation, conservation, noise, open space, safety, and housing. The law mandating that housing be included as an element of each jurisdiction's General Plan is known as "Housing Element Law:' This information bulletin outlines how the state determines housing requirements for jurisdictions, the process localities must follow to secure a certified Housing Element, and the implications for failing to meet required state housing goals. I. THE REGIONAL HOUSING NEEDS ASSESSMENT The California Department of Housing & Community Development is responsible for developing state housing production goals. These goals represent the total number of housing units to be built within an eight year housing cycle for varying income groups. This process is referred to as the Regional Housing Needs Assessment. Once the RHNA is determined, HCD assigns the RHNA figures to the 21 different council of governments located throughout the state, who in turn assign the housing goals to their respective member cities and counties. Carlsbad's COG is the San Diego Association of Governments, who represents 18 cities and the County of San Diego. The RHNA is developed by HCD and distributed to the individual cities and counties by the COGs in accordance with four state directed RHNA objectives: Plan for housing at all income levels/all jurisdictions Balance jobs and housing Focus development in urban areas Protect rural areas, open space and habitat land These objectives are achieved using several regional and local factors and influences including: » Share of existing and projected population growth » Distribution of existing households (by income) » Existing and projected jobs » Persons per household » Opportunities and constraints for housing » Availability of land suitable for development » Preserved or protected lands » Availability of high quality transit corridors » Historic vacancy rates and loss of units » Housing cost burdens » Social equity adjustments II. HOUSING BASED ON INCOME CATEGORIES Under Housing Element Law, RHNA is assigned to four income groups or categories. Families with ... Very low household income Low household income Moderate household income Above moderate household income The household income for each of these categories is based on a percentage of the Area Median Income, as reflected in the chart below. , Income Category Percent of AMI .•.•..•.. ····•··············•····•·•······················· -1 ! v~;; L~; <5o% Low 51 to 80% Moderate 81 to 120% Above Moderate > 120% These percentages are applied to the AMI for a region, not a specific city. Carlsbad falls under the AMI for San Diego County, which is currently $86,300 per year for a four-person household. In comparison, Carlsbad's median income is at $107,600. The income categories pursuant to the San Diego County AMI is reflected in the table below for a family of four: · 1nc_ome Category Percent of AMI H~~sehold ! Very Low <50% $53,500 ! Low 51 to 80% $85,600 Moderate 81to 120% $103,550 Above Moderate >120% >$103,550 OUR HOME OUR FUTURE Ill. DENSITY AND AFFORDABILITY The foundation of Housing Element Law is based on the premise that density is a proxy for affordability. The idea being, the more housing units on a site (density) translates to lower construction costs per unit, which translates to lower rental/sale prices of those units (affordability). As such, HCD assigns minimum density figures to each income category as reflected below. Income Category. PercentofAMl Mlnimum Density' low $53,500 30 du/ac low $85,600 30 du/ac Moderate $103,550 15 du/ac Above Moderate >$103,550 <15 du/ac 1 du/ac = Dwelling unit per 1 acre of land Most cities and counties can attest that higher density development alone rarely translates to housing that is affordable at the targeted income categories. As such, the state requires that cities develop and implement programs that will help facilitate affordable housing sales/rental costs (i.e., inclusionary housing requirements, locally-funded subsidies), but the programs cannot be too onerous as to make the housing development infeasible to construct (i.e., require that all higher-density projects be restricted as affordable). Until state law changes, this is the formula that cities and counties must use when planning for housing under state Housing Element Law. IV. THE LOCAL HOUSING ELEMENT Once a jurisdiction receives its RHNA allocations, it must update its General Plan and Housing Element to demonstrate how the jurisdiction, particularly through policies and zoning, can or will accommodate the RHNA. Generally, a Housing Element must include the following: Review of previous Housing Element Assessment of housing needs Inventory and analysis of adequate sites Analysis of potential constraints Housing policies and programs Quantified objectives One of the most labor intensive and controversial components of the process is the inventory and analysis of adequate sites. Each jurisdiction must evaluate the Land Use Element of their General Plan to determine whether there is enough land available, with adequate zoning (minimum density as described in Section 111), to accommodate their assigned RHNA allocation for each income category. If unable to accommodate the housing goals, the jurisdiction must rezone enough land to meet the RHNA obligation. In addition to adequately zoning sites, the law requires that each jurisdiction look for ways to streamline permit processes and remove processing barriers in order to facilitate the creation of affordable housing. A ministerial process with reduced fees and development incentives (i.e., increased density above plan allowance, waiver of design standards like parking or setbacks, expedited permit review) for affordable housing projects is highly encouraged by HCD. Ultimately, an effective Housing Element provides the necessary conditions for developing and preserving an adequate supply of housing, including housing affordable to seniors, families1 and workers. The update plan provides the opportunity to develop housing and land use strategies to reflect local changing needs, resources, and conditions and provides a vehicle to adopt approaches addressing state driven regulations related to sustainability and environmental concerns. Jurisdictions may also use the Housing Element as an opportunity to complement their economic development goals with their housing goals. Community Development Department I 1635 Faraday Ave. I Carlsbad, CA 92008 I www.carlsbadca.gov Page2of 4 V. HCD HOUSING ELEMENT CERTIFICATION Once updated, Housing Elements must be reviewed and approved by HCD and then adopted by the local jurisdiction (City Council) prior to state mandated deadlines (described in Section VIII). Failure to timely complete this process will result in several penalties, as highlighted in the section below. VI. PENALTIES FOR NONCOMPLIANCE & LIMITATIONS Failing to meet the state requirements can result in significant penalties. Given the current housing crisis in California, each year the state legislature introduces new laws that increase and expand the penalties for noncompliance as well as impose limitations on local controls affecting housing production. Below are a few of the more significant State acts. Housing Accountability and Affordability Act If HCD finds that a jurisdiction's RHNA goals are not being timely satisfied, SB 35 requires cities and counties to streamline review and approval of eligible affordable housing projects by providing a ministerial approval process, exempting such projects from environmental review under CEQA and public hearing process. Refer to the City Info Bulletin on this act. Building Homes and Jobs Act Under Senate Bill 2, jurisdictions that do not have an approved HCD certified Housing Element are not eligible for grant funding. Carlsbad's current housing element is HCD certified, which allowed the city to apply for and be awarded an SB 2 grant in the amount of $310,000. Housing Development and Financing Act Under Assembly Bill 101, jurisdictions failing to timely adopt a local Housing Element may be fined tens of thousands of dollars per month until HCD determines compliance. Housing Crisis Act SB 330 introduces an even more expedited review process for residential development projects than SB 35 and prohibits cities from imposing growth caps or moratoriums on housing projects or plans. This will likely impact how we can implement Carlsbad's Growth Management Plan. Residential Density and Affordability Act Under SB 166, a city cannot reduce residential density on a property without concurrently rezoning another property to make up the lost units. Furthermore, if a city approves a project that results in a density lower than the housing plan identified, it must rezone another property to make up the difference. Potential lawsuits Many cities without an approved Housing Element have been sued by developers and/or affordable housing advocates, resulting in decisions unfavorable to the city. For example: ✓ Courts have suspended a jurisdiction's local land use authority via a court ordered moratoria; the city was unable to issue building permits until a Housing Element was certified and approved. (City of Pasadena) ✓ Courts have assumed land use control over all housing development permits. Under this scenario, the courts could approve a housing development project that may not fit the character of the community. (City of Fremont) ✓ Courts have imposed aggressive timelines for a jurisdiction to approve a Housing Element (with threats of court-assumed land use control for noncompliance), thereby limiting community input in the housing plan development. (City of Encinitas) ✓ The State Attorney General has filed suit against cities that do not have an approved or compliant Housing Element. The implications of the lawsuits are currently unknown. (City of Huntington Beach) ✓ In virtually all cases, the litigation resulted in the city paying significant financial penalties and/or substantive attorney fees. Community Development Department I 1635 Faraday Ave, I Carlsbad, CA 92008 I www.carlsbadca.gov Page 3 of 4 VII. RELATED STATE HOUSING PROGRAMS/LAWS Beyond the mandates required under the Housing Element Law, the state has adopted other regulations and programs that encourage housing production. State Density Bonus Law Density Bonus is a state law that allows a developer to increase density beyond that allowed under a city's local land use plan. An applicant can also receive reductions in required development standards such as setbacks, height limits and parking requirements. In exchange for the increased density, a certain number of the new homes must be reserved for very low, low, or moderate-income households or for seniors. Accessory Dwelling Units The state has found that allowing Accessory Dwelling Units in residential zones where primary residences are already allowed provides additional housing throughout California. In recent years the state has continued to revise and update the programs around ADUs, limiting local city control of them, to more widely allow for ADUs to address housing production. Refer to the city informational bulletin on ADUs. Vil!. 2021-2029 HOUSING CYCLE The RHNA process for the next (sixth) Housing Element cycle is currently in process and will cover the period from April 2021 -April 2029. The RHNA process can be generally categorized into the steps bulleted below. It is important to note that the RHNA process is also being conducted in conjunction with the development of the 2050 Regional Transportation Plan and its Sustainable Communities Strategy in accordance with SB 375 (See Section IX for more on this process). RHNA Methodology and Allocation July 2018 -November 2019 This step includes the development of the methodology in which RHNA will be distributed by SAN DAG. Public review of the draft methodology was completed in September 2019, with HCD approval in November 2019. Currently, city staff coordinates and collaborates with the SAN DAG and regional jurisdictions through its participation in the SAN DAG RHNA Subcommittee meetings. RHNA Distribution and Allocation November 2019 -February 2020 Distribution of the draft RHNA to local jurisdiction occurred in November 2019. In January 2020 the following four jurisdictions filed appeals on the RHNA allocation: Coronado, Imperial Beach, Lemon Grove and Solana Beach. Results of the appeal are pending. Certified local Housing Element February 2020 -April 2021 Each city and county has until April 2021 to process a Housing Element update using their assigned RHNA allocation (this period includes HCD review and City Council adoption). IX. REGIONAL TRANSPORTATION PLAN AND SUSTAINABLE COMMUNITIES STRATEGY The Regional Transportation Plan is a federally required long range transportation plan prepared by SANDAG that is updated every four years, and includes projections of population, household, employment growth and travel demand, along with a specific list of proposed projects to be funded. In Carlsbad, the following local projects are included in the RTP: Carlsbad Boulevard realignment Village/Barrio roundabouts Road extensions for College Boulevard and Poinsettia Lane Road widenings for El Camino Real Road widenings for Avenida Encinas Other improvements at various locations: » Intersection improvements >> Turn lane improvements » ADA improvements » Complete street improvements » Traffic signal system improvements » Pedestrian and bicycle improvements » Lighting improvements » Pavement management program Pursuant to 58 375, SAN DAG must also develop a Sustainable Communities Strategy to integrate land use and transportation strategies that will achieve California Air Resources Board greenhouse gas emissions reduction targets. The SCS must demonstrate on a regional level, those areas sufficient to house all the population of the region, including the eight year projection of the RHNA. Both the RTP/SCS and RHNA have used local input as the basis for future demographic projections, including household growth. Community Development Department I 1635 Faraday Ave, I Carlsbad, CA 92008 I www.carlsbadca.gov Page4of 4