HomeMy WebLinkAbout13 - Waiver of Fees for the Permitting of Accessory Dwelling UnitsQ SEW Pp�T
CITY OF
z NEWPORT BEACH
c�<,FORN'P City Council Staff Report
April 27, 2021
Agenda Item No. 13
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Seimone Jurjis, Community Development Director - 949-644-3232,
sjurjis@newportbeachca.gov
PREPARED BY: Benjamin M. Zdeba, AICP, Senior Planner
bzdeba@newportbeachca.gov
PHONE: 949-644-3253
Resolution No. 2021-37: Waiver of Fees for the Permitting of
TITLE: Accessory Dwelling Units
ABSTRACT:
For the City Council's consideration is a pilot program to temporarily waive City of Newport
Beach (City) plan check review fees, building construction permit review fees, and other
City permit fees directly related to a project creating an Accessory Dwelling Unit (ADU) or
a Junior Accessory Dwelling Unit (JADU). On March 9, 2021, the City Council adopted
Resolution No. 2021-18 to add City Council Policy K-4 (Reducing the Barriers of the
Creation of Housing). One stated policy goal is to increase the production of ADUs and
JADUs in order to help meet the City's Regional Housing Needs Assessment (RHNA)
allocation of 4,845 units of varying affordability. This action is intended to help promote
and encourage the production of these units.
RECOMMENDATION:
a) Determine this action is 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;
and
b) Adopt Council Resolution No. 2021-37, A Resolution of the City Council of the City of
Newport Beach, California, Temporarily Waiving Building Plan Check, Building
Construction Permit, and Other City Permit Fees Directly Related to the Design and
Construction of Accessory Dwelling Units and Junior Accessory Dwelling Units
(Attachment A).
DISCUSSION:
At the February 9, 2021, City Council Study Session related to the Housing Element
Update, the City Council provided staff direction to develop a new Council policy related
to housing production, including ADU production, review of existing mixed-use zoning
districts, and potentially allowing residential development in conjunction with existing hotel
development.
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Resolution No. 2021-37: Waiver of Fees for the Permitting of Accessory Dwelling Units
April 27, 2021
Page 2
On March 9, 2021, the City Council adopted Resolution No. 2021-18 to add City Council
Policy K-4, Reducing the Barriers of the Creation of Housing. (Attachment B).
As discussed in City Council Policy K-4, the City has revised its ADU regulations to
comply with the minimum requirements of State law. Further encouraging the
development of ADUs is an important strategy to accommodate future growth and is an
integral strategy to help meet the City's RHNA allocation. ADUs allow for a dispersion of
density citywide and avoid the need for excessive rezoning and high infrastructure costs
associated with new, higher -density developments. Since ADUs tend to be relatively
small with modest amenities, they provide more affordable housing options for select
groups, such as students, seniors, caretakers and people with disabilities.
In order to encourage ADU and JADU production, City Council Policy K-4 states the City
should pursue the development and administration of a program that includes waiving all
permit and City fees for property owners of unpermitted units when they agree to bring
those units into compliance with current building and fire codes to ensure the safety of
occupants and structures.
Eligible Projects
The proposed temporary fee waiver will only apply to City fees for the following projects:
1. Construction of a new detached ADU to an existing residence;
2. Construction of a new attached ADU or JADU to an existing residence;
3. Conversion of existing residential floor area, including a garage, to an ADU or
JADU; or
4. Legalization of an existing unpermitted ADU or JADU that meets all code
requirements.
Non-Eliaible Proiects
Not all types of ADU and JADU projects will be eligible for the fee waiver. ADUs and
JADUs that are proposed as part of a new construction project are not eligible for the fee
waiver under the proposed program.
Resolution to Sunset
Resolution No. 2021-37 (Attachment A) proposes a temporary waiver of fees to help
incentivize the development of ADUs and JADUs. Unless extended, the temporary waiver
of fees would sunset on December 31, 2022.
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Resolution No. 2021-37: Waiver of Fees for the Permitting of Accessory Dwelling Units
April 27, 2021
Page 3
FISCAL IMPACT:
Adoption of Resolution No. 2021-37 will result in a reduction in projected revenue of plan
check review fees, building permitting fees, and other City fees for ADU and JADU
projects. Depending on the number of ADUs and JADUs permitted, the estimated
reduction in revenue for the remaining FY 2020-21 year is approximately $13,000. For
the entire FY 2021-22, the estimated reduction in revenue would be $78,000. For the first
six months of FY 2022-23, the estimated reduction in revenue is $39,000. This estimate
is based on the permitting of 44 ADUs and JADUs during the program period.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action 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.
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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. 2021-37
Attachment B —City Council Policy K-4
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Attachment A
City Council Resolution
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RESOLUTION NO. 2021- 37
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF NEWPORT BEACH, CALIFORNIA, TEMPORARILY
WAIVING BUILDING PLAN CHECK, BUILDING
CONSTRUCTION PERMIT, AND OTHER CITY PERMIT
FEES DIRECTLY RELATED TO THE DESIGN AND
CONSTRUCTION OF ACCESSORY DWELLING UNITS
AND JUNIOR ACCESSORY DWELLING UNITS
WHEREAS, the City Council adopted Resolution No. 2021-18 on March 9, 2021
adding City Council Policy K-4 (Reducing the Barriers of the Creation of Housing) whose
stated policy goals include an increase in the production of accessory dwelling units
("ADUs") and junior accessory dwelling units ("JADUs") in order to meet the City of
Newport Beach's ("City") Regional Housing Needs Assessment ("RHNA") allocation of
4,845 units of varying affordability;
WHEREAS, Chapter 3.36 (Cost Recovery for User Services) of the Newport
Beach Municipal Code ("NBMC") and the City's Schedule of Rents, Fines and Fees
("SRFF") establish the fees for permits, inspections, and other fees related to building and
construction activities;
WHEREAS, the City Council desires to promote the construction of ADUs and
JADUs by temporarily waiving City related fees, including building plan check, building
construction permit, and other directly associated permit fees;
WHEREAS, this temporary fee waiver encourages the construction of new ADUs
and JADUs, as well as the legalization of existing unpermitted ADUs and JADUs, as part
of an existing residence, to meet the City's RHNA allocation, and
WHEREAS, the City Council hereby finds that it is in the best interest of the City
to invest in protecting the character and distinctive areas of the community through the
establishment of this temporary fee waiver.
NOW, THEREFORE, the City Council of the City of Newport Beach resolves as
follows:
Section 1: The City Council does hereby temporarily waive the City building
plan check, building construction permit, and other related City fees required for plan
check, permits, inspections, re -inspections and other related activities, for the design and
construction of ADUs and JADUs on existing residential developments and the
legalization of existing unpermitted ADUs and JADUs subject to the additional eligibility
requirements set forth herein.
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Resolution No. 2021 -
Page 2 of 3
Section 2: The temporary waiver of the fees set forth in Section 1 apply to: 1)
construction of a new detached ADU to an existing residence; 2) construction of a new
attached ADU or JADU to an existing residence; 3) conversion of existing residential floor
area, including a garage, to an ADU or JADU; or 4) legalization of an existing unpermitted
ADU or JADU that meets all current and applicable requirements of Title 9 (Fire Code),
Chapter 15.04 (Building Code), Chapter 15.05 (Residential Code), Chapter 15.06
(Electrical Code), Chapter 15.07 (Mechanical Code), Chapter 15.08 (Plumbing Code) and
Sections 20.48.200121.48.200 (Accessory Dwelling Units) of the NEMC. The temporary
waiver of fees shall not apply to an application for an ADU or JADU as part of a new
residential development or to any application for an ADU or JADU submitted to the City
prior to the effective date of this resolution.
Section 3: 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.
Section 4: Except as expressly set forth herein, nothing contained in this
resolution shall be deemed to waive any fees otherwise required by any other provision
of law, including fees collected by the City on behalf of any other public agency or entity,
nor otherwise waive compliance with any other applicable provisions of the NBMC or any
other City ordinance, policy or regulation.
Section 5: The recitals provided in this resolution are true and correct and are
incorporated into the operative part of this resolution.
Section 6: 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.
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Resolution No. 2021 -
Page 3 of 3
Section 7: This resolution shall take effect immediately upon its adoption by the
City Council through December 31, 2022, at which time this resolution shall automatically
sunset without further action by the City Council. The City Clerk shall certify the vote
adopting the resolution.
ADOPTED this 27th day of April, 2021.
Brad Avery
Mayor
ATTEST:
Leilani 1. Brown
City Clerk
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
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Aaro arp
City tt rney
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Attachment B
City Council Policy K-4
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Reducing the Barriers to the Creation of Housing
Background
LIMA!
The State of California has declared that the lack of housing is a critical problem that
threatens the economic, environmental, and social quality of life in California. The
consequences of the housing crisis include the lack of housing to support employment
growth, imbalance in jobs and housing, reduced mobility, urban sprawl, excessive
commutes, and air quality deterioration. While the causes of this crisis are multiple and
complex, the State attributes the underlying cause to insufficient housing supply.
On October 15, 2019, the California Department of Housing and Community
Development (HCD) issued a Regional Housing Needs Assessment (RHNA) for the
Southern California Association of Governments (SCAG) region of 1,341,827 units that
each jurisdiction within the region must plan for in the 2021-2029 Planning Permit (Sixth
Cycle). As required under State law, SCAG developed a RHNA Allocation Methodology
to reallocate the regional determination to each of the 197 jurisdictions in the region,
including Newport Beach.
The City of Newport Beach worked diligently for many months in partnership with other
member jurisdictions and stakeholders throughout the RHNA Allocation Methodology
development process to provide comments and recommendations to achieve a RHNA
allocation that is fair, equitable and in consideration of the unique circumstances and local
planning factors inherent in our community. Despite this process and a City -initiated
RHNA appeal, the final adopted RHNA methodology resulted in an allocation of 4,845
units for the City.
The City has successfully obtained and maintained HCD certification of its Housing
Element for both the Fourth Cycle (2008-2014) Planning Period with a RHNA Allocation
of 1,769 units and the Fifth Cycle (2014-2021) Planning Period with a RHNA Allocation
of 5 units. Despite a low Fifth Cycle RHNA Allocation, the City maintained its commitment
to housing programs intended to reduce the barriers to the development of affordable
housing, including preserving the Residential Overlay within the Newport Place Planned
Community. During the first six years of the Fifth Cycle Planning Period, the City has
permitted over 1,768 new units, including 95 lower income units. In addition, the City has
approved entitlements for housing development projects totaling another 662 multi -unit
residential units in the Airport Area, including 13 very low- and 78 low-income units. The
Newport Airport Village Planned Community was also adopted creating the opportunity
for another 444 residential units that would include a minimum affordable housing
component consisting of at least 5 percent very low-income units or 10 percent low
income units. Lastly, the City has committed approximately $2 million to fund the
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acquisition and rehabilitation of the Cove permanent supportive housing project a 12 -unit
apartment complex for homeless veterans and low-income seniors that opened in 2018.
Despite an immensely difficult -to -attain Sixth Cycle RHNA Allocation, the City remains
committed to addressing the housing crisis by developing a timely and compliant Housing
Element and continuing to support the production of housing for all income levels.
Policy
Recognizing that the City has several major constraints on existing lands that severely
limit or totally restrict the City's ability to accommodate growth to the extent identified in
the Sixth Cycle RHNA Allocation, it shall be the policy of the City Council to consider new
and flexible land use and zoning regulations and strategies in order to reasonably and
practically accommodate this ambitious State housing mandate while protecting the
character and maintaining a quality of life that makes Newport Beach a special place to
live, work, and visit.
The City Council therefore directs City staff and the Newport Beach Planning Commission
to develop, modify as necessary, and aggressively implement strategies and action plans
that are designed to accelerate housing production consistent with this policy as
described in the following sections:
Production of Accessory Dwelling Units
The Legislature approved, and the Governor signed SB 13 (Chapter 653, Statutes of
2019), AB 68 (Chapter 655, Statutes of 2019), and AB 881 (Chapter 659, Statutes of
2019) into law that, among other things, amended Government Code sections 65852.2
and 65852.22 to further impose new limits on the City's ability to regulate ADUs and Junior
Accessory Dwelling Units (JADUs). The Legislature's intent was to reduce regulatory
barriers and costs, streamline the approval process, and expand the potential capacity
for ADUs.
Although the City has revised its ADU regulations to comply with the minimum
requirements of State law, further encouraging the development ADUs is an important
strategy to accommodate future growth in combination with other strategies to meet the
RHNA Allocation. HCD allows ADUs to meet a portion of the City's RHNA based on trends
in past production and more aggressive production estimates based on the adoption of
production programs. Encouraging ADUs allows for the dispersing of density throughout
the City and avoids the need for excessive rezoning and high infrastructure costs
associated with new high-density developments. Because ADUs tend to be relatively
small with modest amenities, they provide more affordable housing options for select
groups, such as students, seniors, caretakers, and people with disabilities.
Therefore, to further encourage and incentivize the development of ADUs, the City should
pursue the following:
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1. Interpret ambiguities in code provisions regulating ADUs in a manner that
accommodates and maximizes production.
2. Direct staff and the Planning Commission to review and recommend code changes
that reduce regulatory barriers, streamline the approval process, and expand
potential capacity of ADUs beyond minimum State law requirements.
3. Publicize incentives for construction of ADUs with a systematic approach utilizing
all forms of media and outreach.
4. Prepare and maintain a user-friendly website committed to information related to
codes, processes, and incentives pertaining to the development of ADUs and
JADUs in the City.
5. Develop and administer a program that includes waiving all permit and City fees
for property owners of unpermitted units when they agree to bring units into
compliance with current building and fire codes to ensure the safety of occupants
and structures.
6. Develop permit -ready standard plans to permit new ADU construction to minimize
design costs, expedite permit processing, and provide development certainty for
property owners.
Planninq Commission Review and Recommendations for Mixed -Use Designations
As part of the 2006 Comprehensive General Plan Update and 2010 Zoning Code Update,
new mixed-use housing opportunity zones were created throughout the City as a strategy
to enhance and revitalize underperforming and underutilized properties. These areas
included the Airport Area, Dover/Westcliff, Newport Center, Mariners Mile, and portions
of the Balboa Peninsula. The Airport Area and Newport Center have proven the most
successful with several approved and constructed mixed-use developments, such as
Uptown Newport and Villas Fashion Island. The Balboa Peninsula has had some limited
success while Dover/Westcliff and Mariners' Mile have not proven successful to -date.
Despite the housing opportunity that has been created on several properties in these
areas, a majority of these sites remain underutilized with a single, non-residential use,
such as retail or office. It is evident the City's existing development standards (e.g.,
setbacks, height, density, parking, dedications, etc.) related to mixed-use development
may create constraints to the redevelopment of these properties. Therefore, to ensure
that mixed-use opportunities envisioned by the 2006 General Plan redevelop to their full
potential, the City should pursue the following:
1. Direct staff and the Planning Commission to review annually the established
mixed-use zones in the City and recommend code changes or policy ideas to the
City Council that reduce regulatory barriers and incentivize mixed-use residential
development.
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Mixed -Use Resort Opportunities
Mixed-use resorts are an established trend in the hospitality industry that incorporate
hotel -branded residential units as an accessory use located within a resort hotel complex
where residents enjoy access to the full range of services, facilities, and amenities
provided by the hotel operator or brand. The residential use cannot exist without the
hotel's services, facilities, and amenities.
The hotel industry has been one of the hardest hit industries due to the COVID-19
pandemic and a full recovery of the industry is not anticipated for many years. Mixed-use
resorts provide an opportunity to revitalize older or underperforming hotels and maintain
their competitive standing by creating multiple revenue streams.
Economies of scale created by shared facilities, amenities, and services add additional
benefit to mixed-use resort developments. This cross pollination of business benefits both
the hotel and the resident. It may also increase occupancy rates at the resort by creating
increased synergy between uses and social gathering opportunities, boosting transient
occupancy taxes while providing in -fill housing opportunities to partially assist the City in
meeting its RHNA obligation in highly desirable and built -out areas. Incorporating
residences also helps to off -set cyclical variations in hotel occupancy rates that can, for
instance, result in seasonal decreases in revenue for the hotel's food and beverage
offerings.
Therefore, to further encourage and incentivize the development of mixed-use hotels, the
City should pursue the following:
1. Issue interpretations that interpret ambiguities in General Plan, Zoning Code,
and/or Local Coastal Plan Program provisions to allow hotels and motels, located
outside of the Coastal Commission Appeal Areas, to convert up to thirty percent
(30%) of their permitted hotel and motel rooms into residential units on a one-for-
one basis. Such interpretation would allow for residential units to be deemed an
accessory use to the principal use of a hotel and find that such residential uses are
consistent with the hotel's and motel's underlying General Plan, Zoning Code, and
Local Coastal Plan Program land use and zoning designations.
2. The residential units may be allowed in repurposed hotel and motel rooms and/or
in new residential structures, subject to the City's project approval process (e.g.,
Site Development Review) and including, as appropriate, review under the
California Environmental Quality Act.
3. Consider establishing parking programs (e.g., shared parking) and/or reduced
residential parking requirements that mitigate the need for any additional parking
due to the conversion to residential use.
4. Consider fiscal impact analysis to disclose and mitigate any reduction in transient
occupancy tax due to the conversion.
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5. Consider increasing the flexibility in use of transfer of development rights to allow
for transfer of unbuilt residential units to hotel sites.
6. Require property owners converting permitted hotel and motel rooms into
residential units to mitigate impacts as a result of the conversion including, but not
limited to, creating affordable housing units either in the project itself or through a
contribution of in -lieu fees.
Adopted K-4 — 03-09-2021
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