Loading...
HomeMy WebLinkAbout4a_Attachment 1_Minutes of July 15, 2020CITY OF NEWPORT BEACH HOUSING ELEMENT UPDATE ADVISORY COMMITTEE MINUTES CITY COUNCIL CHAMBERS – 100 CIVIC CENTER DRIVE WEDNESDAY, JULY 15, 2020 REGULAR MEETING – 6 P.M. I.CALL MEETING TO ORDER – 6 p.m. II.WELCOME AND ROLL CALL MEMBERS PRESENT:Chair Larry Tucker, Jeffrey Bloom, Susan DeSantis, Paul Fruchbom, Elizabeth Kiley, Geoffrey LePlastrier, Stephen Sandland, Ed Selich, Debbie Stevens, MEMBERS ABSENT: (Ex Officio Member) Will O’Neill – arrived at 6:31 p.m. Staff Present: Community Development Director Seimone Jurjis, Deputy Community Development Director Jim Campbell, Principal Planner Jaime Murillo, Senior Planner Ben Zdeba, City Traffic Engineer Tony Brine III.PUBLIC COMMENTS ON NON-AGENDA ITEMS Deborah Allen, Harbor View Hills Community Association President, questioned the rationale of holding a public meeting on such an important topic in light of the coronavirus and suggested the City fight the State regarding the timing of the Housing Element Update. Jim Mosher asked if the City would defend voters' disapproval of the Housing Element Update in a court because a provision of AB 1063 authorizes a court to order the Housing Element Update approved if the City submits it timely but final approval is delayed due to a local requirement for voter approval. Philip Bettencourt believed consultants Kimley-Horn and LSA would serve the City well and appreciated the substantial materials provided to the public. Dorothy Kraus hoped members of the Housing Element Update Advisory Committee (Committee) would introduce themselves and noted the foremost objective of the Committee is to serve as a public forum as stated in the Council resolution forming the Committee. David Tanner inquired about the City's strategy to successfully update the Housing Element and public involvement in the process. Chair Tucker advised that Committee members would introduce themselves later in the meeting. The Committee will serve as a forum for public comments. The Council needs a draft Housing Element Update to consider and possibly adopt if it chooses to comply with the California Department of Housing and Community Development's (HCD) requirements. With respect to AB 1063, if thresholds are met and a Measure S vote is required, there will be a further approval process for Council actions. Measure S means the electorate can decide whether to proceed. Housing Element Update Advisory Committee - September 2, 2020 Item No. IV(a) - Attachment 1 Minutes of July 15, 2020 Housing Element Update Advisory Committee Meeting July 15, 2020 Page 2 of 9 IV. CONSENT CALENDAR a. Minutes of July 1, 2020 Recommended Action: Approve and file Chair Tucker noted his and Mr. Mosher's revisions. Chair Tucker moved, seconded by Committee Member Selich, to approve the minutes of the July 1, 2020 meeting as amended by himself and Mr. Mosher. AYE: Tucker, Bloom, DeSantis, Fruchbom, Kiley, LePlastrier, Sandland, Selich, Stevens NO: None ABSTAIN: None ABSENT: None V. CURRENT BUSINESS a. Overview of Project Schedule Recommended Action: No action; receive presentation from Kimley-Horn on the tentative project schedule and discuss as necessary. David Barquist, Kimley-Horn & Associates, reported the State of California has imposed deadlines on all Metropolitan Planning Organizations (MPO), and the Southern California Association of Governments (SCAG), the MPO for Newport Beach, has imposed deadlines on all jurisdictions within its region. The Housing Element planning period extends from October 15, 2021 to October 15, 2029, and the Housing Element due date is October 15, 2021. The October 15, 2021 due date may be delayed for up to six months. Legislative action is required to extend the due date. The State provides the Regional Housing Needs Assessment (RHNA) allocations. The RHNA process includes development of allocations, an appeal period, and final adoption of the allocations at SCAG. Because of a number of issues, the State postponed the appeal period for up to 120 days, and the final allocations may not be approved until the end of 2020. In order to update the Housing Element, the City is assuming the draft allocation will be its final allocation. The baseline analysis, which will extend through October 2020, includes a demographic housing profile, a constraints and resources analysis, analysis of fair housing issues, and a review of the performance of the prior Housing Element. Drafting of the Housing Element will extend through February 2021. The public review period will extend from March through July 2021. A draft Housing Element will be submitted to HCD for compliance review in June 2021. HCD has 60 days to review the draft Housing Element. During that review, HCD staff and City staff can and will communicate regarding issues. Staff anticipates public hearings will be held in September or early October 2021 in order to comply with the adoption deadline. Committee Member Sandland requested the fiscal analysis, Task 7.3, begin prior to February 2021. In response to Chair Tucker's questions, Mr. Barquist advised that the market analysis will be conducted by Keyser Marston Associates. The analysis will look at the implications of growth as it relates to the fiscal model prepared by a prior City consultant. It will determine the cost dynamic for such things as future opportunities for growth, affordability levels, and the rental market versus the owner market. Task 2.2, development of housing plan, is the policy component of the Housing Element, and work on it will occur along with Task 2.4, draft Housing Element. A draft Housing Element could be ready for presentation by November 2020, but work and analyses may be Housing Element Update Advisory Committee - September 2, 2020 Item No. IV(a) - Attachment 1 Minutes of July 15, 2020 Housing Element Update Advisory Committee Meeting July 15, 2020 Page 3 of 9 presented to the Committee prior to November. The project description is scheduled for an extended time period because there could be some issues with sites and decisions may affect the project description. Before the Environmental Impact Report (EIR) process begins in earnest, the project description should be accurate. The scoping meeting is typically held just after the notice of preparation is issued, but it can be held earlier or later in the process. The scoping meeting will define the bounds of the project for the public. The Initial Study, notice of preparation, and public process to begin the EIR is meant to focus on specific environmental issues. In reply to Committee Member Selich's inquiries, Mr. Barquist indicated the EIR public review period is generally the final two months of the process. The public review period will be determined by the hearing dates before the Planning Commission and City Council. The public review period could occur between June and September 2021. In answer to Committee Member DeSantis' query, Mr. Barquist related that the length of a Housing Element Update process depends on the jurisdiction and outreach and collaboration opportunities. The average process extends for 12-16 months. The COVID situation, the nature of outreach, and potential legislative changes will influence the length of the process. The proposed schedule is feasible. In response to Committee Member Sandland's question, Mr. Barquist stated funding and financing opportunities for affordable housing are part of the requisite analysis for the Housing Element. The analysis will consider existing local programs and regional, state, federal and private programs for affordable housing. A summary of the programs will be provided to the Committee. In reply to Committee Member DeSantis' inquiries, Mr. Barquist noted the area subject to the VMT analysis will be determined in the next few weeks and will be shared with the Committee. October or November may be too early to have information from VMT analyses. In answer to Committee Member Stevens' query, Mr. Barquist advised that a baseline assessment is part of the Housing Element policy. Committee Member Stevens suggested including the baseline environmental study as a separate task. The scoping meeting should be held during the public comment period for the Initial Study and notice of preparation. Jim Mosher agreed that the scoping meeting seems to be scheduled late in the process. He inquired about the City's position regarding the SoCal Connect Plan. He wanted to know what the public review draft, Item 2.6, would be and how long the review period would be. David Tanner stated under normal times, the Housing Element Update process would extend over two years. The schedule is unrealistic. If it is realistic, there will not be any public participation. The schedule shows very little public involvement. He requested inclusion of Measure S in the schedule because Measure S will be required. He asked why the City is pursuing legislation that will exempt Measure S from a vote. Chair Tucker assumed the consultant prepared the schedule based on the due date. The process will include public input. The Committee's task is to complete a draft Housing Element. Measure S is not within the Committee's purview. Housing Element Update Advisory Committee - September 2, 2020 Item No. IV(a) - Attachment 1 Minutes of July 15, 2020 Housing Element Update Advisory Committee Meeting July 15, 2020 Page 4 of 9 b. Lessons Learned from Prior Outreach and Discussion of Future Outreach Recommended Action: No action; receive presentation from staff on previous outreach efforts under the now dissolved General Plan Update Steering Committee and discuss future outreach efforts. Senior Planner Ben Zdeba reported a major product of the General Plan Update Steering Committee was branding for the overall General Plan Update effort. Public engagement disclosed that the Land Use and Housing Elements were two of the most important elements for the community. A public workshop was held in each Council district on different days. More than 600 people were engaged in person and online during those workshops. One lesson learned from the prior outreach is engaging the public on such a complicated matter is not easy. The prior process developed a list of shared community values. Early in the process, outreach focused on community values and a vision statement. Approximately 400 people attended a kickoff event. The first workshop garnered the highest attendance with 68 people, and a workshop in December garnered the lowest attendance with 8 people. Workshops included an exercise for participants to map locations for housing. A large amount of housing was placed in the Airport Area, Banning Ranch, the Hoag area, Newport Coast, and Fashion Island/Newport Center. Some housing was scattered around the City and placed in boats off the coast. Chair Tucker advised that he attended five of the seven workshops and found the usual community members at the workshops. An Outreach Subcommittee will be appointed, but engaging the community is difficult. Mildred Perez, Kennedy Commission, suggested the City engage community organizations early in the process to discuss meeting the housing needs of low-income people and to engage low- income communities. The Kennedy Commission would like to assist with public outreach. David Tanner remarked that the questions asked at the workshops reflected the consultant's view and not the public's view. He requested a discussion of the numerous impacts to the General Plan from housing laws. Dorothy Kraus suggested advertising begin now for the Housing Element Update, perhaps through a banner on the City's homepage and announcements on social media platforms. Committee Member Stevens noted the pandemic, the closure of City Hall, and misconceptions are impediments to outreach. Committee Member DeSantis believed outreach would probably not be in person; therefore, different strategies and technologies will be needed. c. Overview of Current Housing Opportunity Sites, HCD Guidebook for Site Selection Criteria and Substantial Evidence Recommended Action: No action; receive presentation from Kimley-Horn and staff regarding current housing opportunity sites inventory of the Housing Element as well as the current site selection criteria pertaining to the update. The discussion should also touch on what "substantial evidence" means. Nick Chen, Kimley-Horn, reported sites are suitable for residential development if zoned appropriately and available for residential use during the planning period. Approximately half of the City's RHNA allocation is designated for very-low-income and low-income housing. HCD's Housing Element Update Advisory Committee - September 2, 2020 Item No. IV(a) - Attachment 1 Minutes of July 15, 2020 Housing Element Update Advisory Committee Meeting July 15, 2020 Page 5 of 9 memorandum is generally oriented toward meeting the lower-income need. The analysis of sites begins with units entitled after the start of the projection period, June 30, 2021, which can be counted towards the RHNA allocation. Next are the most available or the easiest to develop sites, also known as vacant sites, but vacant sites are not a readily available resource in Newport Beach. Next in the analysis are non-vacant or underutilized sites, which are sites currently zoned for residential or other uses that are deemed, based on substantial evidence, re-developable for affordable housing within the planning period. New guidance states if 50 percent or more of the allocation is fulfilled with non-vacant or underutilized sites, there is an impediment to housing development and further evidence must be provided, evidence such as past performance in developing these types of sites or market analysis. The City is not responsible for development of sites, but for providing an environment for development of sites. Creative measures or alternative methods, such as accessory dwelling units, can be used to fulfill the allocation. HCD's memorandum provides methods for anticipating the number of accessory dwelling units that can be counted toward the allocation. Boats as housing units may be an alternative method. Development has to result in no net housing loss, and any loss of units has to be accounted for in the Housing Element and sites analyses. Fair housing and the equitable distribution of housing has to be addressed and analyzed. The HCD memorandum defines substantial evidence as facts, reasonable assumptions or expert opinion that can be supported by facts. In reply to Committee Member Fruchbom's query, Mr. Chen advised that if the analysis shows that fulfilling a requirement is infeasible, staff would have to discuss with HCD next steps and an approach for addressing the situation. Chair Tucker commented that locating affordable units on the coast will result in fewer units than locating them near Hoag or the airport. Equitable distribution will be a challenge. Mr. Chen explained that equitable distribution ensures units are not concentrated in lower resource areas. All census tracts in Newport Beach are likely high resource areas. Chair Tucker noted the Airport Area is zoned for a different school district. HCD suggests a jurisdiction vary its development standards if it cannot generate sufficient affordable units. At some point, increased density becomes counterproductive. Landowners' decisions to redevelop their properties will be driven by economics. In response to Committee Member LePlastrier's inquiry, Principal Planner Jaime Murillo explained staff's development of the sites inventory prepared for the 2006 General Plan Update. Staff included justification for the sites being legitimate opportunity sites. The Airport Area provided the greatest opportunity for housing, followed by Newport Center, Mariners Mile, and a few smaller sites. More analysis is needed to determine sites that can accommodate lower-income units. State law provides that if a site can accommodate at least 30 dwelling units per acre, it is presumed the site can accommodate lower-income housing. The Airport Area is the only area in the City with that minimum density. The Airport Area requires a minimum 10-acre site, and the City implemented a housing overlay exempting a development with at least 30 percent affordable units from the site requirement. Lower-income housing sites are concentrated in the Airport Area, but it is a high resource area. Unfortunately, development projects have reduced the number of lower-income units that can be developed in the Airport Area. Committee Member Kiley remarked that because of the proximity to employment and transportation, the Airport Area is the logical location for affordable housing. In answer to her query, Principal Planner Murillo related that staff is looking at the possibility of accessory dwelling units (ADU) qualifying as affordable units. The potential for development of ADUs in the City is great. SCAG is developing pre-approved methodologies to count ADUs regionally. At the time of Housing Element Update Advisory Committee - September 2, 2020 Item No. IV(a) - Attachment 1 Minutes of July 15, 2020 Housing Element Update Advisory Committee Meeting July 15, 2020 Page 6 of 9 permitting, property owners complete a questionnaire indicating the rent for an ADU, and in some cases the ADUs can be counted as low-income housing units. In answer to Committee Member Fruchbom's question, Principal Planner Murillo explained that in the Airport Area the minimum density is 30 units per acre and the maximum is 50 units per acre. Staff used 30 units per acre and parcel size to develop the realistic capacity for the Airport Area. The actual capacity of the Airport Area is closer to 4,000 units. Staff did not consider 60 or 80 units per acre because the General Plan does not allow such high densities. Chair Tucker recalled the Mayor's letters to legislators regarding credit for ADUs. Public opinion seems to be split as to whether ADUs will be developed. In response to Committee Member DeSantis' inquiries, Principal Planner Murillo believed the Committee will explore the potential for redeveloping existing land uses as housing. Changes in retail business models and the pandemic may provide justification for redevelopment of sites as housing. Chair Tucker indicated surface parking lots are being redeveloped for other uses. The Sites Subcommittee is exploring all possibilities and hopes to find sites on the perimeter of town. In reply to Committee Member Sandland's inquiry, Principal Planner Murillo reported the Newport Crossing project with 350 units and Uptown Newport project with approximately 600 units will be entitled by June 30, 2021. Unfortunately, the units that can be counted will be moderate or above- moderate-income units because the lower-income components have been completed. Staff will prepare a list of projects and units for the next meeting. Jim Mosher commented that the vast majority of opportunity sites identified in 2013 have not been redeveloped during the current planning period, but some of the areas that have been redeveloped with housing were not identified as housing opportunity sites. The Committee may want to know the number of ADUs to which the safe harbor provisions of the HCD memo refer. Locating housing on the County's portion of Banning Ranch may not be a good idea because of the requirements to annex the property and to assume the County's RHNA allocation for the site. Deborah Allen indicated the community strongly supports locating 4,800 units on the periphery of the City. David Tanner requested clarification of the viability under the new regulations of opportunity areas previously shown on the General Plan and not developed. Current laws allow each residential property owner within the City to construct an ADU on his property. More than 40,000 ADUs could be built within the City. Dorothy Kraus inquired about preparation of a baseline number of units that have been built and the remaining capacity and about the Coastal Commission's review of opportunity sites in the Coastal Zone and the impact of the Coastal Commission's review on the October 2021 deadline. Chair Tucker advised that opportunity sites within the Coastal Zone are not under consideration presently. Deputy Community Development Director Jim Campbell explained that the City has a robust GIS database of density. Much of the under-built density is located on R-2 properties. Staff has not Housing Element Update Advisory Committee - September 2, 2020 Item No. IV(a) - Attachment 1 Minutes of July 15, 2020 Housing Element Update Advisory Committee Meeting July 15, 2020 Page 7 of 9 created any summaries but has created maps, which have been provided to the consultant for evaluation of the current baseline. Staff will work with HCD to develop projections for ADUs and work with the community to increase development of ADUs. Redeveloping single-family homes on R-2 lots as duplexes may be an untapped resource for housing units, but it could be difficult to justify to HCD because staff would have to assess the amount of redevelopment over the next eight years based on a nonexistent program. In response to Committee Member Kiley's inquiry, Deputy Community Development Director Campbell related that staff would like to count existing, unpermitted ADUs. However, HCD might take the position that existing ADUs are not a net increase in housing. The City may need to develop policies and programs to promote permitting of existing unpermitted ADUs and redevelopment on R-2 parcels so that HCD will accept the housing units. d. CEQA Project Description Recommended Action: No action; receive presentation from staff on the project description as it pertains to compliance with the California Environmental Quality Act (CEQA) and discuss as necessary. Deputy Community Development Director Campbell reported the environmental review will be programmatic. The CEQA analysis will be based on discrete geographies and specific densities, which are the fundamental components of a project description. This approach to a programmatic environmental review will likely result in an EIR that reflects more impacts than what will be approved. There will not be an opportunity to change the project description to match the final inventory. In reply to Chair Tucker's questions, Deputy Community Development Director Campbell explained sites may be removed from the inventory if they are not feasible or do not meet legal definitions, but sites cannot be added to the inventory. The project scope may be larger than the final sites inventory. Amendments to the Circulation Element may require environmental review and analysis. Policies added to the Housing Element and Land Use Element may need to be evaluated. The project description has to be broader than potential sites. Many components will need to be analyzed before preparation of the EIR begins. The sites inventory will be specific while areas of interest can be fairly broad. Sites will be considered in parallel to preparation of the EIR. Staff and the consultants will prepare a project description and present it to the Committee for review and action. Meanwhile, the Committee will be reviewing potential sites. A Statement of Overriding Considerations is a possibility even if the RHNA allocation is fulfilled. While Level of Service has been replaced with Vehicle Miles Traveled, a Level of Service analysis will be needed to properly plan for intersections and to ensure housing fits as best it can within projections. In answer to Committee Member DeSantis' inquiry, Deputy Community Development Director Campbell indicated staff will attend SCAG's workshop regarding a new tool for the site inventory. In response to Committee Member Fruchbom's query, Deputy Community Development Director Campbell related that there has been talk about exempting the Housing Element Update from CEQA requirements so that jurisdictions can complete it on time. Staff will proceed under the assumption that the Housing Element Update is not exempt from CEQA requirements. David Tanner stated the project description should not be developed by staff or consultants. The City's Traffic Phasing Ordinance will require a Level of Service analysis. There will be massive gridlock if ADUs are developed and RHNA numbers are met. Housing Element Update Advisory Committee - September 2, 2020 Item No. IV(a) - Attachment 1 Minutes of July 15, 2020 Housing Element Update Advisory Committee Meeting July 15, 2020 Page 8 of 9 e. Subcommittee Progress Reports Recommended Action: Receive verbal progress reports from both subcommittees and discuss as necessary. Chair Tucker advised that the Affordable Housing Subcommittee discussed funding, financing, tax credits, subsidies, and rent restrictions for affordable housing. The challenge will be creating incentives that allow the construction of as much affordable housing as possible. At this time, achieving the RHNA allocations for affordable housing does not appear realistic. Committee Member Fruchbom introduced himself as an affordable housing developer. The cost of providing an affordable unit in Newport Beach is higher than in many other cities, but state and federal regulations for affordable housing rents do not consider that fact. Tax credits generally do not provide sufficient income to construct the required number of affordable units. Because rents are high in Newport Beach, increasing the density to some economic limit creates more value for projects in Newport Beach than in an area with lower rents. Hopefully, the developer's profit from high-rent units will be sufficient to subsidize the affordable rents. Committee Member Jeffrey Bloom introduced himself as the head of commercial lending for a regional bank. In addition, he oversees the bank's investment in low-income housing tax credits. Finding tax credit investments in higher-income areas is extremely difficult. Incentives are needed for developers to construct projects in high-income areas and allocate funds saved from that project to projects in less-costly areas. Chair Tucker indicated the Sites Subcommittee began analyzing parcels in a portion of the Airport Area for potential opportunities. There are many large parking lots in the area; however, office buildings have the rights to park in those lots. The subcommittee will probably draft letters to the property owners. The Airport Area is limited to 550 infill units, but that number will probably change. Committee Member Selich introduced himself as a housing developer and a former member of the Newport Beach City Council , Planning Commission, Affordable Housing Committee, and Local Coastal Plan Committee. Committee Member Sandland introduced himself as a licensed architect and retired real estate developer, primarily in infill and reuse projects. He has served on the City Hall Design Committee and the Building and Life Safety Board of Appeals. The Sites Subcommittee also discussed buildings that could be repurposed or demolished for a higher and better use and wrap and podium projects. For all of these projects, the property owner has to be willing to redevelop his property. Committee Member LePlastrier introduced himself as a business adviser and a member of the Board for Olson Urban Housing. Committee Member Kiley introduced herself as a commercial real estate appraiser. Committee Member DeSantis introduced herself as a consultant for stakeholder engagement and advised that she has worked with the California Association of Realtors, as the Director of the State Department of Housing, and with an urban planning firm. Committee Member Stevens introduced herself as an environmental consultant primarily for CEQA documents and as President of the Corona del Mar Residents Association. Housing Element Update Advisory Committee - September 2, 2020 Item No. IV(a) - Attachment 1 Minutes of July 15, 2020 Housing Element Update Advisory Committee Meeting July 15, 2020 Page 9 of 9 Chair Tucker introduced himself as a former attorney for residential, retail and industrial real estate developers, an investor in commercial properties, and a former licensed real estate broker. He has also served on the Planning Commission, City Hall Design Committee, and Finance Committee. Jim Mosher appreciated the introductions and the detailed subcommittee reports and hoped future agendas would include subcommittee reports. f. New Subcommittee Appointments Recommended Action: Appoint an additional opportunity sites subcommittee and appointment an outreach subcommittee. Chair Tucker appointed Committee Members LePlastrier, Selich and Kiley to the Opportunity Sites Subcommittee for West Newport/Mesa and Committee Members DeSantis and Stevens to the Outreach Subcommittee. Chair Tucker moved, seconded by Committee Member Selich, to confirm the appointments to the Opportunity Sites Subcommittee and the Outreach Subcommittee. AYE: Tucker, Bloom, DeSantis, Fruchbom, Kiley, LePlastrier, Sandland, Selich, Stevens NO: None ABSTAIN: None ABSENT: None VI. COMMITTEE ANNOUNCEMENTS OR MATTERS WHICH MEMBERS WOULD LIKE PLACED ON A FUTURE AGENDA FOR DISCUSSION, ACTION OR REPORT (NON-DISCUSSION ITEM) Chair Tucker did not believe a presentation of the 2018 Orange County Business Council study would be useful even though it is an interesting study. The study could be good support for a draft Housing Element Update. VII. ADJOURNMENT – 8:41 p.m. Next Meeting: August 19, 2020, 6 p.m. in the City Council Chambers. Housing Element Update Advisory Committee - September 2, 2020 Item No. IV(a) - Attachment 1 Minutes of July 15, 2020