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CITY OF
NEWPORT BEACH
City Council Staff Report
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ABSTRACT:
January 14, 2020
Agenda Item No. 20
HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
Seimone Jurjis, Community Development Director - 949-644-3232,
sjurjis@newportbeachca.gov
Jim Campbell, Deputy Community Development Director
949-644-3210
Housing Action Plan to Address State Mandate for Additional
Housing and Resolution No. 2020-6: Dissolving the General Plan
Update Steering Committee and Establishing the Housing Element
Update Advisory Committee
At the November 7, 2019, Southern California Association of Governments (SCAG)
meeting, the Regional Council radically changed the Regional Housing Needs Allocation
(RHNA) methodology that was developed without input from the City. The "substitute
motion" RHNA methodology submitted by the County of Riverside cities, was approved
by SCAG's Regional Council, and changed the City's RHNA allocation from 2,751 to
4,832 housing units while reducing the County of Riverside cities' RHNA allocations. The
City's increased RHNA number accelerates four decades worth of planning and
development into the next decade. Due to this State mandate to plan for additional
housing and the un -vetted changes by SCAG, the City Council directed staff to create an
action plan to immediately address the exceptionally high number of housing units. Staff
was also directed by the General Plan Update Steering Committee to seek guidance from
the City Council about how the revised RHNA affects the City's General Plan update
process.
Staff has drafted the Housing Action Plan (Attachment B) that takes an aggressive
approach to addressing the recent SCAG change that significantly increased the City's
RHNA allocation. As part of the Housing Action Plan, staff is also recommending the City
Council consider establishing a Housing Element Update Advisory Committee to focus
on updating the necessary elements of the City's General Plan that address the RHNA
allocation.
RECOMMENDATION:
a) Determine the recommended actions exempt from the California Environmental
Quality Act (CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA
Guidelines because this action will not result in a physical change to the environment,
directly or indirectly-,
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Housing Action Plan to Address State Mandate for Additional Housing and
Resolution No. 2020-6: Dissolving the General Plan Update Steering Committee and
Establishing the Housing Element Update Advisory Committee
January 14, 2020
Page 2
b) Direct staff to file an appeal to SCAG regarding the RHNA methodology;
c) Adopt Resolution No. 2020-6, A Resolution of the City Council of the City of Newport
Beach, California, Dissolving the General Plan Update Steering Committee and
Establishing the Housing Element Update Advisory Committee; and
c) Provide direction to staff on the Housing Action Plan and amending Section 423 of the
City's Charter to be voted upon by the residents.
FUNDING REQUIREMENTS:
No additional funding is being requested at this time.
DISCUSSION -
At the November 7, 2019, SCAG meeting, the Regional Council radically changed the
RHNA methodology that had been developed and vetted over a long period of time
without meaningful analysis by SCAG staff or member jurisdictions. The "substitute
motion" RHNA methodology approved by SCAG would change the City's RHNA
allocation from 2,751 to 4,832 housing units. To obtain compliance with the State
mandate, the City must update its Housing and Land Use Elements. The Housing
Element must be submitted to the California Department of Housing and Community
Development (HCD) by October 15, 2021. Combining excessively high housing units with
recent changes to Housing Element law limiting what would potentially qualify as a
housing opportunity site will make it nearly impossible for the City of Newport Beach to
obtain Housing Element certification. Furthermore, the City's Charter Section 423 will
require a vote of the electorate given the magnitude of the RHNA housing unit increase.
Given the October 2021 deadline, a special election will be necessary, costing the City
approximately $400,000.
At its November 19, 2019, meeting, the City Council requested that staff bring forward an
action plan to address the estimated 4,832 RHNA housing units anticipated to be
distributed to the City through the State's mandate. Staff has developed a 12 -point
Housing Action Plan with four main objectives:
A. Pursue legislative amendments to assist the City to obtain compliance with the
Housing Element deadline of October 15, 20211-
With
021;
With the projected 4,832 RHNA housing units to be distributed to the City, the Land
Use Element of the General Plan would be required to increase residential
development opportunities. The update would necessitate a vote of the residents
due to Charter Section 423, which requires a vote for any major General Plan
amendment resulting in a density increase greater than 100 dwelling units. A
special election vote would increase cost and add significant time to the overall
schedule for updating the necessary elements. Therefore, to help ensure a
successful adoption of a certified Housing Element, staff believes the City must
pursue the following legislative amendments to housing element law:
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Housing Action Plan to Address State Mandate for Additional Housing and
Resolution No. 2020-6: Dissolving the General Plan Update Steering Committee and
Establishing the Housing Element Update Advisory Committee
January 14, 2020
Page 3
1. An extension of time beyond the current October 15, 2021, Housing Element
due date;
2. Reform CEQA to allow for an exemption for general plan element updates due
to the housing crisis declared by the State;
3. Amend Government Code Section 65583.2 to allow for more flexibility or
automatic approval of sites meeting certain objective standards when
determining suitability of housing opportunity sites needed to meet RHNA; and
4. Amend allowance that permits a local government to credit up to 25 percent of
their RHNA sites requirements through existing units that will be substantially
rehabilitated, converted from non -affordable to affordable housing, or
preservation of affordable units that are at -risk of converting to market -rate
units. The current allowance is severely limiting and revisions to the law may
allow for greater use of this credit.
B. Find ways to reduce Regional Housing Needs Allocation;
Staff recommends the City file an appeal after HCD issues their comments to
SCAG's methodology and SCAG adopts the final RHNA in February 2020.
C. Review priorities of the General Plan Update process to focus on housing;
Staff recommends the City Council redirect the City's resources (staffing and
budget) towards a focused update of the Housing, Land Use, and Circulation
Elements. As part of this shift, staff also recommends dissolving the General Plan
Update Steering Committee and establishing a Housing Element Update Advisory
Committee to provide guidance on policy decisions and act as the advisory
committee for the more focused update.
D. Regional Collaboration
Collaborate with surrounding and regional cities, the League of California Cities,
and Association of California Cities of Orange County.
General Plan Uodate Steerina Committee Feedback
It is important to note that the General Plan Update Steering Committee (Committee) was
created by City Council resolution in January 2019 and has been meeting since February
2019. The Committee was not tasked with guiding policy decisions, rather its focus was
on overseeing the outreach and engagement process. In this capacity, the Committee
has worked with City staff and City Council to select an outreach consultant and has
shaped the Listen and Learn (i.e., the community engagement and outreach process).
During the 13 meetings the Committee held, and even since the Listen and Learn kickoff
in October, a lot has changed. The Committee frequently received updates from City staff
on SCAG's determination of 4,832 new housing units for the City. The Committee was
consistently mindful of this requirement, as it worked to guide the Listen and Learn
process.
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Housing Action Plan to Address State Mandate for Additional Housing and
Resolution No. 2020-6: Dissolving the General Plan Update Steering Committee and
Establishing the Housing Element Update Advisory Committee
January 14, 2020
Page 4
Most recently, the Committee met on December 4, 2019, to discuss the Listen and Learn
process and to consider staff's recommendation on immediately forming a broader
General Plan Advisory Committee (GPAC) to help guide policy decisions. The Committee
expressed frustration with the State mandating the City to plan for 4,832 RHNA housing
units, especially given a seemingly unreasonable time constraint with an October 15,
2021, deadline to update the City's Housing Element. The Committee believed there were
still unanswered questions, such as: what will the final RHNA number be for the City?
What will the HCD guidelines state? How many ADUs can the City utilize in the Housing
Element? Instead of recommending or not recommending the formation of a GPAC, the
Committee believed that staff should seek further direction from the City Council on the
General Plan update process, as much has changed since they received their initial
charge. Of particular concern is how the City Council would like to address the immediate
need of pursuing a General Plan update in response to the updated RHNA numbers. The
Committee discussed the current update efforts and concluded the City's focus should be
on planning for the 4,832 RHNA housing units. A more broad and comprehensive General
Plan update would follow later.
In summary, the Committee believes there should be an immediate pause in the overall
General Plan update process and a redirection of the priorities and resources towards
addressing the RHNA housing numbers.
Some of the comments received from the Committee are:
1. Go back to City Council and receive direction on the General Plan update process
before forming the GPAC;
2. Redirect the General Plan update process and focus on addressing the RHNA
housing numbers;
3. It is premature to continue with further community workshops on a broader General
Plan update;
4. The City should not let the Housing Element submittal deadline dictate the City's
process;
5. The City should not rush the update process, as it should be done right;
6. Our City is too important and this issue is so very transformational; and
7. The City may compromise too much if it goes too fast.
Staff's Recommendations
Based on the Committee's comments and recommendation to seek guidance from the
City Council on these issues, City staff recommends the following:
Pause the overall General Plan update and refocus the City's resources on
updating the Housing, Land Use, and Circulation Elements. Environmental justice
policies would be included where appropriate to be compliant with State law;
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Housing Action Plan to Address State Mandate for Additional Housing and
Resolution No. 2020-6: Dissolving the General Plan Update Steering Committee and
Establishing the Housing Element Update Advisory Committee
January 14, 2020
Page 5
2. Create a new advisory committee (the Housing Element Update Advisory
Committee) to guide the refocused update and build upon the progress already
established by the General Plan Update Steering Committee. Staff recommends
nine voting members with the Mayor or a City Council Member serving as a non-
voting ex -officio member. The committee would serve as a forum for public
participation and they would provide guidance on policy decisions. The GPUSC
would dissolve with the appointment of the new committee; and
3. With consultation and direction from the new committee, redirect the existing
outreach consultant to focus on obtaining community consensus on where and
how to plan for the RHNA-mandated housing units.
Charter 423 Amendment
Accommodating the State -mandated increase in dwelling units (the RHNA) within the
City's General Plan will necessitate a vote of the residents because one or more General
Plan Statistical Areas will likely receive increases over 100 units. The residents might not
approve the General Plan amendment, resulting in a non-compliant Housing Element
potentially subjecting the City to significant penalties and fines. The City would likely need
to seek intervention from the Courts in that circumstance.
One way to avoid this potential situation is to consider a Charter amendment for the
November 2020 General Election exempting the City's General Plan amendment to
accommodate the State mandate. The Charter amendment would be carefully written to
not apply to any other proposed amendment. In other words, only the City's plan to
accommodate a State -mandated increase in housing units would not require a vote. If a
property owner requested a change to the Land Use Element to accommodate additional
housing at a site not included in the Housing Element update sponsored by the City, then
that application would require a vote if it were classified as a major amendment. While
this concept may be controversial and might not be successful if pursued, the attempt to
avoid a non-compliant Housing Element requiring Court intervention might be viewed
favorably by the State and the Courts. If such a Charter amendment is successful, it would
simplify the Housing Element update process. Staff is requesting that the City Council
consider placing this amendment on the November 2020 ballot.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find the recommended actions is not subject to the
California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the
activity will not result in a direct or reasonably foreseeable indirect physical change in the
environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378)
of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it
has no potential for resulting in physical change to the environment, directly or indirectly.
None of the recommended actions authorize development but only provide a framework
for future planning. The future update of the General Plan to accommodate the RHNA will
require environmental review consistent with CEQA prior to adoption.
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Housing Action Plan to Address State Mandate for Additional Housing and
Resolution No. 2020-6: Dissolving the General Plan Update Steering Committee and
Establishing the Housing Element Update Advisory Committee
January 14, 2020
Page 6
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
ATTACHMENTS:
Attachment A — Resolution No. 2020-6
Attachment B — January 2020 Housing Action Plan
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ATTACHMENT A
RESOLUTION NO. 2020-6
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF NEWPORT BEACH, CALIFORNIA, DISSOLVING THE
GENERAL PLAN UPDATE STEERING COMMITTEE AND
ESTABLISHING THE HOUSING ELEMENT UPDATE
ADVISORY COMMITTEE
WHEREAS, on January 22, 2019, the City Council of the City of Newport Beach
("City") adopted Resolution No. 2019-7 creating the General Plan Update Steering
Committee ("Committee") to consider amendments to the City's General Plan and Local
Coastal Program;
WHEREAS, Resolution No. 2019-7 was repealed and replaced by Resolution
2019-20, which maintained the same purpose but revised the number of members of the
Committee;
WHEREAS, the Committee's primary purpose is to ensure there is sufficient public
outreach and stakeholder input regarding the proposed General Plan Update and to guide
the initial public outreach effort;
WHEREAS, the Committee began meeting in February 2019, worked with City
staff and the City's outreach consultant, Kearns & West ("K&W'), and guided the
community engagement and outreach process ("Listen and Learn") during this time;
WHEREAS, the Committee received regular updates from City staff regarding the
California Department of Housing and Community Development ("HCD") Regional
Housing Need Determination for the Southern California region of 1,344,740 housing
units and the City's estimated Regional Housing Needs Assessment ("RHNA") from the
Southern California Association of Governments ("SCAG") for the sixth cycle (2021-
2029);
WHEREAS, City staff and K&W officially launched the Listen and Learn on
October 26, 2019, with a community -wide fair event hosted at the Civic Center followed
by a series of seven (7) identical workshops conducted within each of the seven (7)
council districts in November and December;
WHEREAS, as an element of the General Plan Update, the Committee sought
input from the community and discussed the RHNA as part of the City's Housing Element
during the Listen and Learn;
WHEREAS, also during this time, SCAG's RHNA Subcommittee worked to identify
a recommended methodology for distributing HCD's Regional Housing Need
Determination that would result in an estimated RHNA allocation of 2,751 new housing
units for the City;
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Resolution No. 2020 -
Page 2 of 3
WHEREAS, on November 7, 2019, the SCAG Regional Council voted to adopt a
substitute methodology resulting in an increased RHNA estimate of 4,832 new housing
units ("Proposed RHNA Methodology"), which has been submitted to the California
Department of Housing and Community Development ("HCD") for final consideration;
WHEREAS, recognizing the significant impact of SCAG's allocation of housing
units to the City in the Proposed RHNA Methodology, the Committee met on November
6, 2019, and December 4, 2019, and recommended the Committee focus on the Housing
Element, Land Use Element, and Circulation Element and to retain a qualified consultant
to assist with preparation of amendments to these elements;
WHEREAS, the Housing Element requires immediate focus in light of the fact that
the City will likely be required to obtain voter approval of the sixth cycle Housing Element
Update (2021- 2029), in accordance with Section 423 of the City of Newport Beach
Charter, by October 2021;
WHEREAS, with the Committee's guidance, City staff worked to release a Request
for Proposal ("RFP") for consultant services related to updating the City's General Plan
Housing Element, Land Use Element, and Circulation Element on December 20, 2019;
and
WHEREAS, the aforementioned circumstances require the establishment of a new
Committee titled the Housing Element Update Advisory Committee ("Housing Element
Update Advisory Committee") to provide community input on the Housing Element
update. The Housing Element Update Advisory Committee will be well-suited to help
articulate the community's values and vision while providing guidance on shaping policies
and goal for the Housing Element.
NOW, THEREFORE, the City Council of the City of Newport Beach resolves as
follows:
Section 1: The City Council hereby creates the Housing Element Update Advisory
Committee to serve as a forum for public participation, to guide a focused update of the
Housing, Land Use and Circulation Elements of the General Plan, and to build upon the
progress already established by the General Plan Update Steering Committee.
Section 2: The Housing Element Update Advisory Committee shall be an ad hoc
committee and the term, qualification of appointees, selection of appointees, appointment
process, membership, and responsibilities shall be done in conformance with this
resolution and Attachment 1, which is incorporated herein by reference.
Section 3. The City Council hereby repeals Resolution No. 2019-20 effective upon
appointment of the Housing Element Update Advisory Committee Members, at which time
the General Plan Update Steering Committee is dissolved.
=
cc•
Resolution No. 2020 -
Page 3 of 3
Section 4: If any section, subsection, sentence, clause or phrase of this resolution
is, for any reason, held to be invalid or unconstitutional, such decision shall not affect the
validity or constitutionality of the remaining portions of this resolution. The City Council
hereby declares that it would have passed this resolution, and each section, subsection,
sentence, clause or phrase hereof, irrespective of the fact that any one or more sections,
subsections, sentences, clauses or phrases be declared invalid or unconstitutional.
Section 5: The recitals provided in this resolution are true and correct and are
incorporated into the operative part of this resolution.
Section 6: The City Council finds the adoption of this resolution is not subject to
the California Environmental Quality Act ("CEQA") pursuant to Sections 15060(c)(2) (the
activity will not result in a direct or reasonably foreseeable indirect physical change in the
environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378)
of the CEQA Guidelines, California Code of Regulations, Title 14, Division 6, Chapter 3,
because it has no potential for resulting in physical change to the environment, directly or
indirectly and the formation of a committee is not a project.
Section 7: This resolution shall take effect immediately upon its adoption by the
City Council, and the City Clerk shall certify the vote adopting the resolution.
ADOPTED this 14th day of January, 2020.
Will O'Neill
Mayor
ATTEST:
Leilani i. Brown
City Clerk
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Attachment 1: Description of the Housing Element Update Advisory Committee
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ATTACHMENT 1
Housing Element Update Advisory Committee
AUTHORIZATION: Established by Resolution No. 2020-_ adopted on January 14,
2020.
MEMBERSHIP: Ten (10) total. The Mayor, or a City Council Member
designated by the Mayor, shall be an ex officio member
without the right to vote. Nine (9) residents appointed by the
Mayor and confirmed by the City Council.
MEMBERSHIP
TERM: The person elected as Mayor, or the City Council Member
designated by the Mayor, shall be a member of the Housing
Element Update Advisory Committee ("Committee'). The
term of the appointed members of the Committee shall be
indefinite pending City Council action, or expiration of the
Committee.
MEETINGS: Meetings shall be held as required by the business needs of
the Committee in such locations, dates and times as allowed
by the Ralph M. Brown Act.
QUALIFICATIONS
OF APPOINTED
MEMBERS: Appointed Committee Members shall be:
A. A resident of the City of Newport Beach ("City");
B. A registered voter in the City of Newport Beach;
C. Appointed by the Mayor; and
D. Confirmed by the City Council.
The Committee shall have a Chairperson and a Vice
Chairperson appointed by the Mayor.
SELECTION
OF APPOINTED
MEMBERS: Selection of Committee Members shall be done as follows:
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A. The City Clerk shall prepare a notice letting members
of the public know of the opportunity to serve on the
Committee and the application process. The notice
shall include, but not be limited to, details regarding
what information is necessary to be considered for
appointment, where to submit an application, and the
application deadline.
B. The application notice shall be published at least once
in a newspaper of general circulation in the City and
posted in the City's normal posting location for
agendas, as well as the Newport Beach Public Library
located at 1000 Avocado Avenue.
C. The deadline to submit applications for the Committee
shall be one (1) week after the application notice is
published in a newspaper of general circulation in the
City.
D. The Mayor shall form an ad-hoc Appointments
Committee, which shall be comprised of the Mayor
and two (2) Council Members to review the
applications, the applicants' answers to any questions,
and to conduct any necessary interviews.
E. In conducting their review of applications and
interviews with the individual applicants, if any, the
ad-hoc Appointments Committee shall attempt to
determine if there exists a potential conflict of interest,
which might interfere with the performance of the
applicant's duties in an impartial manner free from
bias.
F. After the applications have been reviewed and any
necessary interviews conducted, the two (2) Council
Members on the ad-hoc Appointment Committee shall
make a recommendation to the Mayor regarding who
should be appointed to the Committee. In making a
recommendation to the Mayor, the two (2) Council
Members on the ad-hoc Appointment Committee shall
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endeavor to avoid recommending appointments of
applicants with a substantial conflict of interest, which
would require repeated disqualification from voting
on issues that are likely to come before the Committee.
G. The Mayor shall consider the recommendation of the
two (2) Council Members on the ad-hoc Appointment
Committee and, after consideration of the
recommendation, decide, in the Mayor's discretion,
whom should be appointed to the Committee.
H. The Mayor shall inform the City Clerk of the names of
the members to be appointed to the Committee and the
City Clerk will submit the names of the appointees to
the City Council, at an open and noticed meeting, to be
considered for confirmation by the City Council.
I. Except as otherwise required by law, the process for
selecting, appointing and confirming members to the
Committee shall follow the process set forth herein.
PURPOSE &
RESPONSIBILITIES: A. Ensure there is sufficient public outreach and
stakeholder input regarding the update to the
Housing, Land Use, and Circulation Elements of the
City of Newport Beach General Plan and any other
Elements deemed necessary;
B. Review responses to the Request for Proposal for
services to update the Housing, Land Use, Circulation,
and other Elements deemed necessary;
C. Make a recommendation to the City Council regarding
the selection of consultants to assist in the update of the
Housing, Land Use, Circulation, and other Elements
deemed necessary;
D. Provide guidance to City staff and the consultant
through the outreach process;
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E. Provide guidance to City staff, and the consultant, on
goals and policies related to the update of the Housing,
Land Use, Circulation Elements, and any other
Elements deemed necessary by the Committee or City
Council; and
F. Make other recommendations to the City Council
regarding the update of the General Plan, as necessary.
COMMITTEE
EXPIRATION: The Committee shall expire and sunset without further action
upon completion and submittal of a certifiable Housing
Element to the California Department of Housing and
Community Development.
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Attachment B
JANUARY 2020
HOUSING ACTION PLAN
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CITY OF NEWPORT BEACH
JANUARY 2020
HOUSING ACTION PLAN
Objective
Action
Action Steps
Stake Holders
Due Date
A. Pursue legislative
1. Request a two-year extension beyond the
a. Request assistance from
I. Assemblywoman
Feb. 2020
amendments to
October 2021 deadline to provide
Assemblywoman Cottie Petri -Norris.
Cottie Petri -Norris
assist the City to
realistic and adequate time complete the
obtain compliance
Housing Element.
b. Request assistance from Senator
II. State Senator John
with the Housing
Moorlach.
Moorlach
Element due date of
2. Request to waive or partially waive the
October 15, 2021
California Environmental Quality Act
c. Send formal communication to the
III. HCD
(CEQA) requirements for updating the
Department of Housing Community
Housing Element due to State mandates.
Development (HCD).
IV. League of
California Cities
3. Amend Govt Code 65583.2 to allow more
d. Collaborate with Governor Newsom's
flexibility or automatic approval of sites
office.
meeting certain clear standards when
determining suitability of housing
e. Collaborate with the League of
opportunity sites.
California Cities.
4. Amend the allowance that permits a local
government to credit up to 25 percent of
their RHNA sites requirements through
existing units that will be substantially
rehabilitated
B. Reduce Regional
5. Reduce the current RHNA of 4,832
f. File an appeal of final allocation
I. OCCOG
Feb. 2020
Housing Needs
housing units.
numbers to Southern California
Allocation (RHNA)
Association of Governments (SCAG).
II. SCAG
6. Support regional efforts to revise RHNA
allocation methodology prior to final
g. Letter to HCD regarding concerns with
II. HCD
adoption by SCAG in February.
last minute changes to the RHNA
allocation at the SCAG hearings.
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CITY OF NEWPORT BEACH
JANUARY 2020
HOUSING ACTION PLAN
20-16
C. Change the priorities
7. Change the priority of updating the City's
h. Commence with the update of the
I. City Council
Jan. 2020
of the General Plan
General Plan to focus on submitting a
Housing Element with the goal of
Update to focus on
certifiable Housing Element to HCD.
meeting the October 2021 deadline.
II. Housing Element
housing, impacts
Update Advisory
generated and
8. Commence updating the Housing, Land
i. Form a policy committee that can
Committee
compliance with the
Use and Circulation elements.
provide recommendations to staff on
state requirements
housing policy and housing opportunity
III. Community
9. Form a goals and policy committee to
sites (location of future housing sites).
make policy recommendations.
D. Regional
10. Work with surrounding cities on
j. Collaborate with surrounding Cities,
I. Surrounding Cities
Jan. — March
Collaboration
regional solutions to RHNA numbers.
such as:
2020
• Costa Mesa
II. OCCOG
11. Work with OCCOG on regional
• Seal Beach
solutions.
• Huntington Beach
III. League of
• Fountain Valley
California Cities
12. Request the League of California Cities
. Laguna Beach
for a coordinated statewide response
Irvine
to excessive allocation.
k. Send a formal request to the League of
California Cities for assistance.
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