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HomeMy WebLinkAboutSS2 - Housing Element Update Status Report (PA2017-141) - CorrespondencePUBLIC Providing Access to Justice October 26, 2021 City of Newport Beach City Council 100 Civic Center Drive Newport Beach, CA 92660 LAWCENTER For Orange County's Low Income Residents RE: City of Newport Beach Draft 6th Cycle Housing Element Dear City Staff, Received After Agenda Printed October 26, 2021 Item No. SS2 Public Law Center ("PLC") is a 501(c)(3) legal services organization that provides free civil legal services to low-income individuals and families across Orange County. We write on behalf of individuals and families in need of affordable housing in Orange County to provide additional comments on the City of Newport Beach ("the City") Draft 6th Cycle Housing Element ("the Draft") that was submitted to the California Department of Housing and Community Development ("HCD") on August 13, 2021.1 Our comments are in addition to the previous three comment letters we have submitted to the City of Newport Beach. Our comments are also in support of and in addition to the HCD's Review letter dated October 12, 2021. Additionally, we attach our three previous comment letters to the City because there are additional issues raised in those letters that the City has yet to address and to demonstrate that we continue to raise the same issues with the City, but that these concerns continue to go unresolved. Here, the City's Draft 6th Cycle Housing Element still does not meet the statutory requirements and should be revised prior to adoption. Emergency Shelters The City has identified nonresidential zones Office Airport (OA) and Private Institutions Coastal (PI) as zones where emergency shelters are permitted without a conditional use or other discretionary permit.2 However, the City does not state whether these zones can accommodate at least one year-round emergency shelter and does not claim that these zones include sufficient capacity to accommodate the need for emergency shelter.4 The City states the OA zone has "over 56 parcels totaling approximately 54 acres" and the PI zone has "over 44 parcels totaling approximately 135 acres" that could accommodate 1 Due to the City issuing multiple drafts of its 6t' Cycle Housing Element, the portion of our review of the City's Assessment of Fair Housing and obligation to Affirmatively Further Fair Housing is based on the draft released on July 13, 2021 and pages referenced in that section of our letter are to the July 2021 Draft, as indicated. A quick comparison of the July 2021 and August 2021 Drafts did not reveal any substantive changes to those portions of the Draft and therefore we did not update these comments we previously prepared, but did not have the opportunity to submit to the City before the release of its August Draft. 2 Cal. Gov. Code Section 65583(a)(4)(A); City of Newport Beach, Draft 2021-2029 Housing Element, 3-24 (August 2021). s Cal. Gov. Code Section 65583(a)(4)(A). a Cal. Gov. Code Section 65583(a)(4)(A). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541-5157 RE: City of Newport Beach Draft 6th Cycle Housing Element October 26, 2021 p. 2 emergency shelters.' Although the City claims that "adequate sites are available for the potential development of emergency shelters" within these zones, the City does not identify any of these sites or describe any specific site as vacant or affordable to an emergency shelter provider.6 The City notes that existing uses in the OA zone are "corporate and professional offices; automobile sales, rental and service; aviation sales and service; hotels; and accessory retail, restaurant, and service uses" and that the PI zone "is intended to provide for areas appropriate for privately owned facilities that serve the public, including spaces for assembly/meeting facilities (e.g. religious assembly), congregate care homes, cultural institutions, health care facilities, marinas, museums, private schools, yacht clubs, and comparable facilities." 7 Despite these existing uses, the City believes that low and medium density professional office buildings that are aging or provide affordable rents "provide realistic opportunities for reuse" and that religious assembly facilities "provide the best means to facilitate the development and management of emergency shelters in the City."8 Without explaining how an emergency shelter can be developed along with these existing uses or identifying which existing uses will be discontinued within the planning period, it appears unlikely that these zones would realistically accommodate the requisite shelters. The City should provide more information about parcels in the area and explain how an emergency shelter provider could overcome existing uses. Emergency Shelter Standards Here, the City does not describe its emergency shelter standards and therefore cannot demonstrate that existing or proposed permit processing, development, and management standards are objective and encourage and facilitate the development of, or conversion to, emergency shelters. 9 It is not sufficient to include a policy, such as Policy Action 6F: Emergency Shelters, Transitional and Supportive Housing, and state that the City will "amend certain sections of its Municipal Code," with one of those amendments being the City's code to "address permit requirements, objective standards, analysis of annual and season needs, and parking and other applicable standards and provisions"10 for emergency shelters and transitional housing. The City needs to identify its objective standards that encourage and facilitate the development of emergency shelters and, if necessary, explain specifically how its Policy Action 6F will amend improve these standards to comply with these requirements. Special Housing Needs The City analyzed the special housing needs of seniors; persons with disabilities, including a developmental disability;" large households; single -parent households; farmworkers; 5 City of Newport Beach, Draft 2021-2029 Housing Element, 3-24 to 3-25 (August 2021). 6 City of Newport Beach, Draft 2021-2029 Housing Element, 3-25 (August 2021). 7 City of Newport Beach, Draft 2021-2029 Housing Element, 3-24 (August 2021). a City of Newport Beach, Draft 2021-2029 Housing Element, 3-24 to 3-25 (August 2021). 9 Cal. Gov. Code Section 65583(a)(4)(A). 10 City of Newport Beach, Draft 2021-2029 Housing Element, 4-22 (August 2021). " "`Developmental disability' means a disability that originates before an individual attains 18 years of age, continues, or can be expected to continue, indefinitely, and constitutes a substantial disability for that individual. As defined by the Director of Developmental Services, in consultation with the Superintendent of Public Instruction, this term shall include intellectual disability, cerebral palsy, epilepsy, and autism. This term shall also include disabling conditions found to be closely related to intellectual disability or to require treatment similar to that required for individuals with an intellectual disability, but shall not include other handicapping conditions that are solely physical in nature." Cal. Welfare and Institutions Code Section 4512. 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541-5157 RE: City of Newport Beach Draft 6th Cycle Housing Element October 26, 2021 p. 3 and families and persons in need of emergency shelter. 12 However, the City fails to specifically address how it will help meet these needs. Seniors First, the City lists the following special housing concerns for seniors: "limited and fixed incomes, high healthcare costs, higher incidence of mobility and self-care limitations, transit dependency, and living alone." 13 Because of these concerns, seniors need affordable housing, supportive housing, group homes, and other assisted housing. 14 Within the jurisdiction, there are 19,574 seniors, 4,134 of which are living with disabilities. 15 To meet these identified needs, the City included several programs. Policy Action 3H states that the City will give highest priority for use of Affordable Housing Fund monies to affordable housing developments providing units affordable to extremely low-income households and senior households. 16 The City states it will "establish objective priorities to allow for the ranking/scoring of future affordable housing projects so that expenditures that most meet the City's objectives are prioritized for funding." 17 Although this program will prioritize extremely low-income and senior housing, the City should make a commitment to monitor the effectiveness of this program and create additional rules to preserve Affordable Housing Fund monies to be used for this purpose. Otherwise, these monies could be used by other affordable housing projects that serve mostly moderate -income residents with some low-income units available. Policy Action 6B states that the City has developed a Senior Home Repair Assistance Program (SHARP) "that is aimed at assisting low-income seniors in need of critical home repair or modifications due to accessibility needs, safety concerns, health and well-being" but is reserved for lower-income homeowners over 60 years old. 18 This program does not address the need for these modifications in renter households. The City should strongly consider extending this program to work with owners of rental units to assist residents with disabilities that do not have the privilege to own a home. Similar to Policy Action 3H, Policy Action 6E states that "the City will encourage and approve senior housing developments if there is a market demand provided the projects include appropriate support services including transportation." 19 To meaningfully encourage senior housing development, the City should remove the requirement for a market demand because there are already 19,574 seniors living within the jurisdiction.20 Additionally, the City should not require, but merely encourage or incentivize projects to provide private support services such as transportation. Requiring transportation services could increase the cost of these units, likely raising rents out of reach for extremely -low- and low-income seniors. To better meet the needs of 12 Cal. Gov. Code Section 65583(a)(7). 13 City of Newport Beach, Draft 2021-2029 Housing Element, 2-18 (August 2021). 14 City of Newport Beach, Draft 2021-2029 Housing Element, 2-18 (August 2021). 15 City of Newport Beach, Draft 2021-2029 Housing Element, 2-19 (August 2021). 16 City of Newport Beach, Draft 2021-2029 Housing Element, 4-11 (August 2021). 17 City of Newport Beach, Draft 2021-2029 Housing Element, 4-11 (August 2021). 18 City of Newport Beach, Draft 2021-2029 Housing Element, 4-20 (August 2021). 19 City of Newport Beach, Draft 2021-2029 Housing Element, 4-22 (August 2021). 21 City of Newport Beach, Draft 2021-2029 Housing Element, 2-19 (August 2021). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541-5157 RE: City of Newport Beach Draft 6th Cycle Housing Element October 26, 2021 p. 4 seniors, the City should develop its own programs to provide transportation to senior residents and require projects to cooperate with the City and other organizations serving seniors to provide these services. Policy Action 6E also states that "projects that provide housing and services for low- and moderate -income seniors shall take precedence over market -rate senior housing."21 Similar to Policy Action 3H, the City should commit to monitoring the effectiveness of this program and create policies it will implement if low- and moderate -income senior housing is not being developed. Policy Action 6G vaguely states that "the City seeks to develop explore the feasibility and appropriateness of proactive policies and programs to address and prioritize the needs of its senior population" and "strategically collaborate with the local senior community and organizations providing senior services to evaluate existing programs, policies, procedures and funding priorities. ,22 Based on this assessment, the City states it will "develop a comprehensive prioritization program for Senior Housing" only if "there are feasible and practical approaches."23 First, the exploration and analysis of the needs of seniors, and particularly their housing needs, should had been completed as part of the housing element update process and that analysis should have been included in the City's description of its senior population and their housing needs. Second, this program does not actually require the City to provide any actual services or implement any actual program to address the needs of seniors because it could deem any suggestions from the community and organizations as infeasible or impractical. The City should explain how it will evaluate the suggestions as feasible or practical as a commitment to taking action to provide affordable housing for seniors. Persons with Disabilities Here, the City states that disabilities can "hinder access to traditionally designed housing units, as well as potentially limit the ability to earn adequate income."24 People with disabilities "often have special housing needs related to limited earning capacity, a lack of accessible and affordable housing, and higher healthcare costs associated with a disability" and may need to live in a supportive or institutional setting. 25 These issues are exacerbated by special design needs such as ramps, holding bars, and special architectural designs to accommodate wheelchairs. 26 Despite all these challenges, the City summarily states that "housing opportunities for persons with disabilities can be addressed through the provision of affordable, barrier -free housing" and that "rehabilitation assistance can be targeted toward renters and homeowners with disabilities for unit modification to improve accessibility."27 However, the City's programs fail to do so. Even though Policy Action 613 is titled "Repair Loans and Grant Programs for Seniors, Persons with Physical and Developmental Disabilities and Lower -Income Households," the 21 City of Newport Beach, Draft 2021-2029 Housing Element, 4-22 (August 2021). 22 City of Newport Beach, Draft 2021-2029 Housing Element, 4-23 (August 2021). 21 City of Newport Beach, Draft 2021-2029 Housing Element, 4-23 (August 2021). 24 City of Newport Beach, Draft 2021-2029 Housing Element, 2-19 (August 2021). 21 City of Newport Beach, Draft 2021-2029 Housing Element, 2-19 (August 2021). 26 City of Newport Beach, Draft 2021-2029 Housing Element, 2-19 (August 2021). 27 City of Newport Beach, Draft 2021-2029 Housing Element, 2-19 (August 2021). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541-5157 RE: City of Newport Beach Draft 6th Cycle Housing Element October 26, 2021 p. 5 existing program, SHARP, only assists low-income homeowners aged 60 and older but provides no assistance to senior renters with disabilities or younger residents with disabilities.28 Additionally, Policy Action 6B states it will "continue to cooperate with the Orange County Housing Authority to pursue establishment of a Senior/Disabled or Limited Income Repair Loan and Grant Program to underwrite all or part of the cost of necessary housing modifications and repairs."29 The City does not describe how it will create this program or whether there will be any restrictions on accessing these loans or grants. Further, Policy Action 7C states that "the City will review and prioritize housing construction and rehabilitation including supportive services targeted for persons with developmental disabilities. "'o This program only prioritizes housing for people with developmental disabilities and does not address similar needs for people with physical disabilities. The City must create programs to assist renters with all types of disabilities, at any age. Restricting funds to a narrow demographic and stating it will continue to attempt to create programs is not sufficient to meet the special housing needs of this group. Large Households The City acknowledges that large households face "a limited supply of adequately sized and affordable housing units," which is exacerbated by the higher cost of food, clothing, and medical care. 31 These additional costs commonly require that lower-income large households reside in smaller units with inadequate number of bedrooms, resulting in overcrowding. 32 The City notes that these challenges are particularly difficult for renters because "multi -unit rental units are typically physically smaller than single -unit ownership homes" and rarely include apartments with more than three bedrooms. 33 If they are available, these units "are rarely affordable to lower-income households."34 However, despite having 558 large household renters, the City does not list any resources serving this demographic and includes no programs to address these special housing needs. The City must revise its draft to include ways address the special housing needs of large households. Single -Parent Households Here, the City identifies that "single -parent households often require special consideration and assistance due to their greater need for affordable and accessible daycare, health care, and other supportive services," that "many female -headed households with children are susceptible to having lower -incomes than similar two-parent households," and that "single, female mothers often face social marginalization pressures that often limit their occupational choices and income earning potential, housing options and access to supportive services."35 26 City of Newport Beach, Draft 2021-2029 Housing Element, 4-20 (August 2021). 29 City of Newport Beach, Draft 2021-2029 Housing Element, 4-21 (August 2021). 30 City of Newport Beach, Draft 2021-2029 Housing Element, 4-24 (August 2021). " City of Newport Beach, Draft 2021-2029 Housing Element, 2-22 (August 2021). 32 City of Newport Beach, Draft 2021-2029 Housing Element, 2-22 (August 2021). 33 City of Newport Beach, Draft 2021-2029 Housing Element, 2-22 (August 2021). 34 City of Newport Beach, Draft 2021-2029 Housing Element, 2-22 (August 2021). 31 City of Newport Beach, Draft 2021-2029 Housing Element, 2-23 (August 2021). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541-5157 RE: City of Newport Beach Draft 6th Cycle Housing Element October 26, 2021 p. 6 Similar to large households, despite 183 single -parent households living in poverty within the jurisdiction, the City does not provide any housing resources for this demographic and includes no programs to address these special housing needs. The City must analyze the special housing needs of this group and describe how it will help address this need. Farmworkers The City notes that farmworkers' special housing needs stem from lower incomes and frequent moving due to harvest schedules.36 Based on limited information, the City estimates that there are 92 residents that are "employed full time in the agriculture, forestry, fishing, hunting, and mining industry. ,37 However, only Policy Action 7E attempts to address these needs by revising the Municipal Code to allow for employee housing with six or fewer employees within single family structures, allow employee housing of no more than 12 units or 36 beds to be permitted in agricultural zones, and define and allow Farmworker Housing in residential and nonresidential zones.38 However, this would merely mean the City's Municipal Code is consistent with State law. 39 Even through there are only 92 farmworker residents within the jurisdiction, the City must make a greater effort to meet their special housing needs, not simply meet State requirements. Reducing RHNA By Units Built The City identifies the five projects as "currently in the entitlements process [and] are likely to be developed during the planning period and count as credit" toward its RHNA.ao However, the City does not describe any of these projects, does not claim that any of these units will be built between the start of the projection period and the deadline for adoption of the housing element,41 or describe the methodology for assigning those housing units to an income category such as considering actual or projected sales price, rent levels, or other mechanisms establishing affordability.42 The City vaguely states that 42 units will be affordable to very -low- income households and 78 will be affordable to low-income households. 43 Without all of this information, the City cannot use these projects to reduce its RHNA.44 Constraints Governmental Constraints The Draft identifies three main governmental constraints which include: 1) land use controls, 2) infrastructure constraints, and 3) environmental constraints. 4' Among such constraints the element lists: the local coastal program, airport land use, overlay districts, residential development standards, growth management measures, fees, building codes and enforcement, permit processing procedures, and coastal hazards, among many others. 46 The 36 City of Newport Beach, Draft 2021-2029 Housing Element, 2-23 (August 2021). 31 City of Newport Beach, Draft 2021-2029 Housing Element, 2-23 (August 2021). 38 City of Newport Beach, Draft 2021-2029 Housing Element, 4-25 (August 2021). 39 City of Newport Beach, Draft 2021-2029 Housing Element, 4-25 (August 2021). ao City of Newport Beach, Draft 2021-2029 Housing Element, 3-95 (August 2021). ai Cal. Gov. Code Section 65583.1(d). 12 Cal. Gov. Code Section 65583.1(d). 13 City of Newport Beach, Draft 2021-2029 Housing Element, 3-96 (August 2021). as Cal. Gov. Code Section 65583.1(d). 15 City of Newport Beach, Draft 2021-2029 Housing Element, 3-5 to 3-49 (August 2021). " City of Newport Beach, Draft 2021-2029 Housing Element, 3-5 (August 2021). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541-5157 RE: City of Newport Beach Draft 6th Cycle Housing Element October 26, 2021 p. 7 element provides Housing Policies to address these constraints, however the City consistently failed to analyze the constraint's effects on affordable housing development.47 Moreover, the City did not demonstrate local efforts to remove constraints that hinder affordable housing development specifically such as amending zoning ordinances, permit processing procedures, etc. 48 The element should include potential governmental constraints on supportive housing, single -room occupancy units, emergency shelters, and transitional housing as listed in Section 65583(c)(1) and include local efforts to overcome constraints on development. 49 Nongovernmental Constraints The Draft identifies land and construction costs and economic constraints to development as nongovernmental constraints on affordable housing development .50 The Draft denies home financing to be a non-governmental constraint to affordable housing, however Table 3-1 on pg.3- 3 displays a conflicting message .51 Table 3-1 shows applicants of Color in the "less than 50 percent of the median -income" categories were denied loans more frequently than White applicants.52 Applicants who reported to be White or Asian were, on average, were more likely to be approved for a loan than another race or ethnicity.53 Since the City did not identify barriers to financing a constraint to affordable housing, no program was created to directly address the disparity (the current Policy Action 2.1.3 54 is ineffective as detailed below). The City should reconsider their assessment and create an effective program to lower barriers to home financing. According to the element, The City acknowledges land costs are the largest constraint to meeting RHNA obligations. 55 For this reason, the City created policies and programs to increase the available land for residential use, establishing incentives, streamlined review and permitting processes to mitigate the impacts associated with high land costs. 56 The Policies listed below address constraints and solutions, with feedback provided, in order for the element to be compliant with CA state law. Policy 2.1.2 exists "To ensure expedient construction and occupancy for projects approved with lower- and moderate -income housing requirements" to lower permit processing constraints. 57 However, the element does not quantify the progress this program has had in the past .5' Appendix A lists 3 pending projects with low-income housing units to be "expedited", but fails to quantify how this Policy has incentivized affordable housing in the past, or how this 17 City of Newport Beach, Draft 2021-2029 Housing Element, 3-5 to 3-49 (August 2021). as City of Newport Beach, Draft 2021-2029 Housing Element, 4-1 (August 2021). a9 HCD, Building Blocks: A Comprehensive Housing -Element Guide, Constraints, https://www.hcd.ca. gov/community-development/building-blocks/constraints/nongovernment- constraints.shtml#requisite (last visited Sep. 1, 2021). so City of Newport Beach, Draft 2021-2029 Housing Element, 3-1 to 3-3 (August 2021). si City of Newport Beach, Draft 2021-2029 Housing Element, 3-3 (August 2021). 12 City of Newport Beach, Draft 2021-2029 Housing Element, 3-3 (August 2021). s3 City of Newport Beach, Draft 2021-2029 Housing Element, 3-3 (August 2021). sa City of Newport Beach, Draft 2021-2029 Housing Element, A-6 (August 2021). ss City of Newport Beach, Draft 2021-2029 Housing Element, 3-4 (August 2021). 16 City of Newport Beach, Draft 2021-2029 Housing Element, 3-4 (August 2021). 57 City of Newport Beach, Draft 2021-2029 Housing Element, A-5 (August 2021). ss City of Newport Beach, Draft 2021-2029 Housing Element, A-5 (August 2021). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541-5157 RE: City of Newport Beach Draft 6th Cycle Housing Element October 26, 2021 P. 8 Policy will remove non-governmental constraints on affordable housing development.59 The element should provide data on how the Policy has encouraged affordable housing development by reducing constraints, to determine if the Policy returned results. As mentioned above, the element denies financing to be a constraint to affordable housing, but supplies Policy 2.1.3 to assist in financing of affordable housing.60 This Policy was created to overcome economic constraints of and incentivize affordable housing development through tax -mortgage revenue bonds .61 This Policy observed no progress in the 51h Cycle, but remains in the 6th Cycle with minor adjustments. It is unclear how this Policy will encourage the development of affordable housing given the failed results of the 5th Cycle. The City should create a mandatory program to incentivize the financing of affordable housing. Policy 2.1.6 provides data on 5th Cycle progress on lowering constraints to affordable housing but does not provide a quantified objective for the 6th Cycle.62 Instead of broadly stating that "the City will continue to promote the development of affordable housing by expediting the development process," the element should clarify development goals of Policy 2.1.6 by specifically stating whether the City will continue to implement this policy. Policy 2.2.2 does not give quantified policy accomplishments from the 5th Cycle but is maintained in the 61h Cycle.63 The Policy provides, "more [financial] assistance for projects that provide a higher number of affordable units or a greater level of affordability" but does not identify how much "more" funding will be provided.64 Additionally, the Policy asserts, "the City provides financial assistance based on a project by project analysis, depending on need and overall project merits" which is vague and discretionary language that does not provide how this Policy will reduce constraints to affordable housing development.65 The same issues are observed in Policy 2.2.5, and Policy 2.2.6.66 Program 4.1 exists to preserve maintenance of low income housing by securing resources from public and private sectors. 61 Specifically, the element identifies Policy 4.1.2 to prevent the sale of affordable housing, as the City may "[potentially] use Community Development Block Grant (CDBG) funds and/or Affordable Housing Fund monies to maintain affordable housing opportunities..."68 This language is discretionary and should instead be made mandatory. Additionally, Policy 4.1.2 did not make any progress from 2014-2019, but the City maintains the Policy in the 61h Cycle69, which is a questionable use of resources. Policy 4.1.7 serves to encourage section 8 housing accessibility, but has the same issues as Policy 4.1.2.70The City s9 City of Newport Beach, Draft 2021-2029 Housing Element, A-5 (August 2021). 60 City of Newport Beach, Draft 2021-2029 Housing Element, A-6 (August 2021). 61 City of Newport Beach, Draft 2021-2029 Housing Element, A-6 (August 2021). 62 City of Newport Beach, Draft 2021-2029 Housing Element, A-6 to A-7 (August 2021). 63 City of Newport Beach, Draft 2021-2029 Housing Element, A-7 (August 2021). 61 City of Newport Beach, Draft 2021-2029 Housing Element, A-7 (August 2021). 65 City of Newport Beach, Draft 2021-2029 Housing Element, A-7 (August 2021). 66 City of Newport Beach, Draft 2021-2029 Housing Element, A-8 to A-9 (August 2021). 67 City of Newport Beach, Draft 2021-2029 Housing Element, A-21 (August 2021). 61 City of Newport Beach, Draft 2021-2029 Housing Element, A-21 to A-22 (August 2021). 69 City of Newport Beach, Draft 2021-2029 Housing Element, A-21 to A-22 (August 2021). 70 City of Newport Beach, Draft 2021-2029 Housing Element, A-24 to A-25 (August 2021). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541-5157 RE: City of Newport Beach Draft 6th Cycle Housing Element October 26, 2021 P. 9 should include quantified results and goals for these Policies, along with a mandatory City ordinance protecting affordable housing units from being converted to market -rate units. Site Inventory The housing element must include an inventory of land suitable and available for residential development, including vacant sites and sites having realistic and demonstrated potential for redevelopment during the planning period to meet the locality's housing need for a designated income level.71 Determining Site Capacity Although the City describes how it calculated unit capacity for nonvacant sites, the City does not explain how it determined site capacity for other sites. 72 In its next draft, the City must describe its methodology and adjust its site capacity as necessary based on the potential and actual governmental constraints upon maintenance, improvement, or development of housing, including land use controls and site improvements; the realistic development capacity for the site; typical densities of existing or approved residential developments at a similar affordability level in that jurisdiction; and the current or planned availability and accessibility of sufficient water, sewer, and dry utilities.73 Previously Identified Lower Income Sites The following sites are designated for lower income units and have been identified in a prior housing element and cannot be deemed adequate to accommodate a portion of the housing need for lower income households because they are not zoned at an appropriate density and will not be rezoned at the appropriate density: 74 • Site 425 47126; • Site 425 47124; • Site 425 47157; and • Site 425 47156. Each of these sites are zoned at densities less than 30 dwelling units per acre. 75 To keep these sites in its inventory, the City must specify that these sites will be rezoned at the appropriate density. Lower Income Site Size Although the City states that it "assessed the feasibility of parcels in the Focus Areas to redevelop residentially during the planning period" and the "parcels deemed Feasible were then analyzed to ensure compliance with HCD's criteria for sites designated to accommodate lower income development (including sizing criteria)," the City identified a large number of sites that are either smaller than half an acre or larger than ten acres as adequate to accommodate lower 71 Cal. Gov. Code Section 65583(a)(3); Cal. Gov. Code Section 65583.2(a). 72 Cal. Gov. Code Section 65583.2(c)(1). 73 Cal. Gov. Code Section 65583.2(c)(2). 74 Cal. Gov. Code Section 65583.2(c). 75 Cal. Gov. Code Section 65583.2(c)(3)(B). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541-5157 RE: City of Newport Beach Draft 6th Cycle Housing Element October 26, 2021 P. 10 income housing. 76 However, these sites cannot be deemed adequate to accommodate lower income housing because the City has not demonstrated that sites of an equivalent size were successfully developed during the prior planning period for an equivalent number of lower income housing units as projected for the site and has not provided other evidence to HCD that the site is adequate to accommodate lower income housing.77 The City must provide this evidence or remove these sites from its inventory. Calculating the Number of Lower -Income Units The City has included numerous lower income sites in its inventory without (1) providing an analysis demonstrating how the adopted densities accommodate this need, including, but not limited to, factors such as market demand, financial feasibility, or information based on development project experience within a zone or zones that provide housing for lower income households;78 or (2) falling into a density deemed appropriate to accommodate housing for lower-income households. 79 The City must meet one of these requirements for its lower-income sites or remove the parcels from its site inventory. Nonvacant Sites For nonvacant sites, the City must explain the methodology used to determine the development potential .8' Although the City claims it took into account development standards, net acreage of the site, assumed density, incentives, financial feasibility, and development trends when calculating unit capacity on nonvacant sites, the City does not actually describe any of these factors or explain how these factors operate within the methodology. 8 1 Further, the methodology must also take the following factors into account: (1) the extent to which existing uses may constitute an impediment to additional residential development; (2) the jurisdiction's past experience with converting existing uses to higher density residential development; (3) the current market demand for the existing use; (4) an analysis of any existing leases or other contracts that would perpetuate the existing use or prevent redevelopment of the site for additional residential development; (5) market conditions. 82 The City must conduct a full analysis of the of nonvacant sites and revise its site capacity accordingly. Nonvacant Sites Owned by the City or County Here, the City has identified the following nonvacant sites owned by the City or County, but has not included a description of any plans to dispose of the property during the planning period and how the City or County will comply with the Surplus Lands Act: 83 • Site 445 15101: owned by the City of Orange; 84 • Site 114 170 82: owned by the City of Newport Beach; 85 76 City of Newport Beach, Draft 2021-2029 Housing Element, B-9 (August 2021). 77 Cal. Gov. Code Section 65583.2(c)(2). 78 Cal. Gov. Code Section 65583.2(c)(3)(A). 79 Cal. Gov. Code Section 65583.2(c)(3)(B). 80 Cal. Gov. Code Section 65583.2(g)(1). 81 City of Newport Beach, Draft 2021-2029 Housing Element, B-12 (August 2021). 82 Cal. Gov. Code Section 65583.2(g)(1). 83 Cal. Gov. Code Section 65583.2(b)(3). 84 City of Newport Beach, Draft 2021-2029 Housing Element, B-18 (August 2021). 85 City of Newport Beach, Draft 2021-2029 Housing Element, B-27 (August 2021). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541-5157 RE: City of Newport Beach Draft 6th Cycle Housing Element October 26, 2021 P. 11 • Site 424 401 12: owned by the City of Newport Beach; 86 • Site 425 17101 - owned by the City of Newport Beach;87 • Site 423 12103: owned by the City of Newport Beach; 88 • Site 120 571 12: owned by the owned by the City of Orange;89 • Site 114 170 80: owned by the City of Newport Beach; 90 • Site 114 170 81: owned by the City of Newport Beach; 91 and • Site 114 170 66: owned by the Orange County Flood Control District. 92 To keep these sites in its inventory, the City must provide the requisite information in its next draft. Presumption of Impeding Additional Residential Development Although the City received letters of interest in residential development from a number of site owners, a large portion of the site owners did not respond or are seemingly not interested. Without findings based on substantial evidence that the site's existing use is likely to be discontinued during the planning period, the City cannot overcome the presumption that existing uses will impede additional residential development. 93 The City must include more information about sites without owner interest to keep these nonvacant sites in its inventory. Furthermore, because the City has relied on nonvacant sites to accommodate 50% or more of its housing need for lower income households, the methodology used to determine additional development potential must demonstrate that the existing use identified does not constitute an impediment to additional residential development during the planning period. 94 However, because many of these sites do not indicate owner interest or provide other evidence, the City has not met this requirement. Accessory Dwelling Units Based on the recent changes to ADU legislation, "local factors that may increase ADU development over the next eight years, and actions Newport Beach will take through housing programs to incentivizing ADU development," the City estimates that 1,000 ADUs will be produced during the planning period and counts these units towards its RHNA.95 However, to estimate the number of ADUs that will be developed in the planning period, the City must generally use a three-part approach addressing (1) development trends, (2) anticipated affordability, and (3) resources and incentives. 96 " City of Newport Beach, Draft 2021-2029 Housing Element, B-27 (August 2021). 87 City of Newport Beach, Draft 2021-2029 Housing Element, B-27 (August 2021). as City of Newport Beach, Draft 2021-2029 Housing Element, B-37 (August 2021). s9 City of Newport Beach, Draft 2021-2029 Housing Element, B-55 (August 2021). 90 City of Newport Beach, Draft 2021-2029 Housing Element, B-60 (August 2021). " City of Newport Beach, Draft 2021-2029 Housing Element, B-60 (August 2021). 92 City of Newport Beach, Draft 2021-2029 Housing Element, B-61 (August 2021). 9s Cal. Gov. Code Section 65583.2(g)(2). 9a Cal. Gov. Code Section 65583.2(g)(2). 9s City of Newport Beach, Draft 2021-2029 Housing Element, 3-95 (August 2021); Cal. Gov. Code § 65852.2(m); Cal. Gov. Code § 65583.1(a). " HCD, ADU Handbook, 19 (December 2020). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541-5157 RE: City of Newport Beach Draft 6th Cycle Housing Element October 26, 2021 p. 12 When assessing development trends, a jurisdiction must consider the number of ADUs developed in the prior housing element planning period, whether or not the units are permitted by right.97 However, in describing its ADU development over recent years, the City specifies that only 1 ADU was "finaled" in 2018, 1 in 2019, and 3 in 2020. All other ADUs were permitted or applied for permits, but were not developed. 98 The City must also consider the need for these units in the community;99 the availability of ADUs and JADUs that will be part of the rental stock, rather than used as offices or guest houses; 100 but has not done so. HCD has stated that if jurisdictions anticipate a higher ADU production, it will require more analysis and incentives to show the higher production can be met. Here, the City's analysis and incentives must show that more ADUs will be produced during the planning period. In its analysis, the City describes several "key factors" that demonstrate the "substantial opportunity to develop affordable housing through ADUs."101 First, the City broadly claims that high land values within the jurisdiction will encourage ADU production and that approximately 19,000 properties are eligible for some sort of ADU development. 102 Second, the City states that "almost 8,000 existing parcels have the physical space to accommodate detached ADUs and provide for ample opportunity to add to the housing stock." 103 However, merely having the space available for ADUs does not necessarily mean that 1,000 ADUs will be constructed and made available to the public for housing. The City has provided no evidence to support that a large number of households with space for ADUs will readily make affordable housing available in their own backyards. Third, the City claims that the "positive trends are directly correlated with the City's current efforts to provide supportive policies, outreach and information dissemination to its residents" and that "intensified public outreach and development incentives" will result in continued "year over year increase in ADU activity." 104 However, the City does not claim that it will encourage the production of affordable rental ADUs in these materials. It is just as likely that any ADUs constructed due to this outreach will simply be used by residents as guest houses, offices, short-term rentals, or gyms. The City should specifically encourage and incentivize ADU construction to house very -low- and low-income residents. Fourth, the City claims that it has and will continue to provide "strong support through policies, community outreach and monitoring of ADU construction." 105 However, Policy Action lI merely states that the City will establish an ADU Monitoring Program that will track ADU 97 Cal. Gov. Code § 65583.1(a); HCD, ADU Handbook, 19 (December 2020). 9s City of Newport Beach, Draft 2021-2029 Housing Element, D-7 (August 2021). 99 Cal. Gov. Code § 65583.1(a). "I HCD, Accessory Dwelling Units (ADU) and Junior Accessory Dwelling Units (JADUs), Requisite Analysis, https://hcd.ca.gov/community-developmentibuilding-blocks/site-inventory-analysis/accessory-dwelling-units. shtml (last visited Mar. 21, 2021). '0' City of Newport Beach, Draft 2021-2029 Housing Element, D-3 (August 2021). 102 City of Newport Beach, Draft 2021-2029 Housing Element, D-3 (August 2021). 113 City of Newport Beach, Draft 2021-2029 Housing Element, D-3 (August 2021). '0' City of Newport Beach, Draft 2021-2029 Housing Element, D-3 to D-4 (August 2021). '0' City of Newport Beach, Draft 2021-2029 Housing Element, D-4 (August 2021). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541-5157 RE: City of Newport Beach Draft 6th Cycle Housing Element October 26, 2021 p. 13 applications, locations, and "other important features." 106 This program does not monitor the affordability of constructed ADUs. Although the claimed intent of this program is to "track progress in meeting 2021-2029 ADU construction goals and to evaluate the need to adjust programs and policies if the pace of construction is less than anticipated," the City makes no assertions about how it will address ADUs being constructed at moderate- or above -moderate - income levels or for non-public uses. 107 The City must revise this program to specify what it will monitor and how it will address shortfalls of affordable ADUs. Fifth, Council Policy K-4 encourages and incentivizes the development of ADUs with the following directives: 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. los These programs cannot justify the overwhelming discrepancy between the acceptable ADU estimate and the City's estimate. To justify such an increase, the City must also create a program to reduce or eliminate building permit/development fees; 109 provide expedited procedures;) to create incentives for affordability; 111 and offer financing for the construction and preservation of ADUs. 112 However, even a program offering all of these incentives may still not be adequate to justify the City's excessive reliance on ADUs. Although, the City waived building plan checks, building construction permits, and "other related City fees required for plan check, permits, inspections, reinspections 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," these incentives are only offered for two years. 113 To meaningfully incentivize the creation ADUs, and 106 City of Newport Beach, Draft 2021-2029 Housing Element, 4-6 (August 2021). 101 City of Newport Beach, Draft 2021-2029 Housing Element, 4-6 (August 2021). los City of Newport Beach, Draft 2021-2029 Housing Element, D-4 (August 2021). 109 SCAG, Accessory Dwelling Units (ADUs), SCAG Housing Element Digital Workshop, 6 (August 27, 2020). 110 HCD, ADU Handbook, 19 (December 2020). 111 SCAG, Accessory Dwelling Units (ADUs), SCAG Housing Element Digital Workshop, 6 (August 27, 2020). 112 SCAG, Accessory Dwelling Units (ADUs), SCAG Housing Element Digital Workshop, 6 (August 27, 2020). 113 City of Newport Beach, Draft 2021-2029 Housing Element, D-4 (August 2021). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541-5157 RE: City of Newport Beach Draft 6th Cycle Housing Element October 26, 2021 p. 14 particularly affordable ADUs, the City should permanently provide these opportunities to its residents. Affirmatively Furthering Fair Housing California law requires that public agencies administer all "programs and activities relating to housing and community development in a manner to affirmatively further fair housing, and take no action that is materially inconsistent with its obligation to affirmatively further fair housing."' 14 To affirmatively further fair housing, a public agency must do the following: [Take] meaningful actions, in addition to combating discrimination, that overcome patterns of segregation and foster inclusive communities free from barriers that restrict access to opportunity based on protected characteristics. Specifically, affirmatively furthering fair housing means taking meaningful actions that, taken together, address significant disparities in housing needs and in access to opportunity, replacing segregated living patterns with truly integrated and balanced living patterns, transforming racially and ethnically concentrated areas of poverty into areas of opportunity, and fostering and maintaining compliance with civil rights and fair housing laws. 115 Meaningful action means taking significant action that is designed and reasonably expected to achieve a material positive change that affirmatively furthers fair housing. 116 Housing elements must incorporate the obligation to affirmatively further fair housing in the following sections: (1) outreach, (2) assessment of fair housing, (3) site inventory, (4) identification and prioritization of contributing factors, and (5) goals, policies, and actions. Each section is addressed below. 117 Outreach Beyond preexisting outreach requirements, jurisdictions must include a summary of their fair housing outreach capacity.11' Also, jurisdictions "must describe meaningful, frequent, and ongoing public participation with key stakeholders."' 19 HCD provides examples of key stakeholders: • advocacy groups (local, regional, and state level), lla Cal. Gov. Code Section 8899.50(b). lls Cal. Gov. Code Section 8899.50(a)(1). 116 HCD, Affirmatively Furthering Fair Housing: Guidance for All Public Entities and for Housing Elements, 66 (April 2021); Affirmatively Furthering Fair Housing, 80 Fed. Reg. at 42354. Although the Department of Housing and Urban Development does not enforce this federal AFFH rule, California law has adopted the federal rule. This means that the federal AFFH rule can inform how to interpret the obligation to affirmatively further fair housing in California law. "I HCD, Affirmatively Furthering Fair Housing: Guidance for All Public Entities and for Housing Elements, 21 (April 2021). lla Cal. Gov. Code Section 65583(c)(10)(A)(i). 119 HCD, Affirmatively Furthering Fair Housing: Guidance for All Public Entities and for Housing Elements, 21 (April 2021). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541-5157 RE: City of Newport Beach Draft 6th Cycle Housing Element October 26, 2021 p. 15 • community members who are lower income, • persons and households with special needs, • members of protected classes, • representative advocacy organizations and other similarly situated parties, • fair housing agencies, • independent living centers, and • homeless service agencies. 120 Additionally, jurisdictions must summarize "issues that contributed to lack of participation in the housing element process by all economic segments, particularly people with protected characteristics, if that proves to be the case." 121 The City must expand its outreach efforts to meet AFFH requirements. The City has held seven community workshops and opened several online public participation forums. 122 However, the City has not shown that it has communicated with key stakeholders. This failure to reach out to key stakeholders cannot constitute "frequent, meaningful, and ongoing public participation," which HCD requires. Also, the City does not summarize issues that contributed to lack of participation. For these reasons, the City does not satisfy AFFH outreach standards. We recommend that the City engage key stakeholders in the housing element process and describe their participation. We further suggest that the City summarize issues that contributed to lack of participation, particularly by persons with protected characteristics. Assessment of Fair Housing A fair housing assessment must have a summary of fair housing enforcement and capacity.123 In addition, the assessment must analyze these five areas: (1) fair housing enforcement and outreach capacity; (2) integration and segregation patterns and trends related to people with protected characteristics; (3) racially or ethnically concentrated areas of poverty or affluence; (4) disparities in access to opportunity for people with protected characteristics, including persons with disabilities; and (5) disproportionate housing needs within the jurisdiction, including displacement risk. 124 Furthermore, each of these analyses must include local and regional patterns and trends over time, local data and knowledge, and other relevant factors. 125 Additionally, each analysis should arrive at conclusions and have a summary of fair housing issues. 126 121 HCD, Affirmatively Furthering Fair Housing: Guidance for All Public Entities and for Housing Elements, 21-22 (April 2021). 121 HCD, Affirmatively Furthering Fair Housing: Guidance for All Public Entities and for Housing Elements, 22 (April 2021). 122 City of Newport Beach, Draft 2021-2029 Housing Element C-1 to -4 (July 2021). 123 HCD, Affirmatively Furthering Fair Housing: Guidance for All Public Entities and for Housing Elements, 62 (April 2021). lea HCD, Affirmatively Furthering Fair Housing: Guidance for All Public Entities and for Housing Elements, 27-28, 62 (April 2021). 121 HCD, Affirmatively Furthering Fair Housing: Guidance for All Public Entities and for Housing Elements, 24-25, 62 (April 2021). 126 HCD, Affirmatively Furthering Fair Housing: Guidance for All Public Entities and for Housing Elements, 25, 62 (April 2021). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541-5157 RE: City of Newport Beach Draft 6th Cycle Housing Element October 26, 2021 p. 16 Fair Housing Enforcement and Outreach Capacity. The City must fix two structural problems with its analysis of fair housing enforcement and outreach capacity. First, the City neglects regional patterns and trends, only including fair housing inquiries filed within the City. 127 Second, although the City summarizes fair housing issues for other analyses, 128 the City does not do so for fair housing enforcement and outreach capacity. Therefore, the City falls below HCD's standards. To strengthen this section, the City must, after considering regional data, conclude and summarize fair housing issues for fair housing enforcement and outreach capacity. Segregation and Integration. The City's discussion of integration and segregation is inadequate. Although the City discusses racial and ethnic segregation and integration, 129 it overlooks segregation and integration related to income level, familial status, and persons with disabilities. 130 The City also glosses over significant regional segregation. As shown in Exhibit 1, whereas most of the jurisdictions around the City have a mix of three races or an Asian majority, the City is predominantly white. Similarly, northern Orange County has significant levels of poverty, but none of this poverty penetrates the City, whose entire population earns more than the State's median income. See Exhibit 2 and 3. Given that the City ignored these regional segregation trends and omitted segregation and integration regarding income level, familial status, and persons with disabilities, the City's AFFH analysis violates State law. The City must review data regarding each protected characteristic at both a regional and local level. R/ECAPs and RCAAs. The City needs to bolster its analysis of racially or ethnically concentrated areas of poverty (R/ECAPs) and racially concentrated areas of affluence (RCAAs). The City identifies and discusses R/ECAPs located in Irvine. 131 But because the City disregarded the Tax Credit Allocation Committee's data, the City passed over another RECAP in Costa Mesa that borders the City to the north. See Exhibit 4. Additionally, even though the City may sit in a regional RCAA due to its wealth, patterns of segregation, and predominantly white population, the City omitted information about RCAAs. See Exhibits 1 and 3. Because the City missed the Costa Mesa RECAP and failed to consider RCAAs, the City does not comply with California law. To improve the City's analysis, the City must point out the Costa Mesa RECAP and tackle issues related to RCAAs. Disparities in Access to Opportunity. The City does not meet HCD's criteria for an analysis of access to opportunity. Although the City presents data on each access to opportunity variable, 132 the City does not answer several questions that the City "should, at minimum," address. 133 These questions are in HCD's Guidance Memo at pages thirty-five and thirty-six. Furthermore, the City again neglects relevant regional data, only underlining local trends. 134 The "' City of Newport Beach, Draft 2021-2029 Housing Element 3-58 (July 2021). 128 City of Newport Beach, Draft 2021-2029 Housing Element 3-77 to -78 (July 2021). 129 City of Newport Beach, Draft 2021-2029 Housing Element 3-58 to -59 (July 2021). '30 HCD, Affirmatively Furthering Fair Housing: Guidance for All Public Entities and for Housing Elements, 31 (April 2021). 131 City of Newport Beach, Draft 2021-2029 Housing Element 3-59 to -61 (July 2021) 132 City of Newport Beach, Draft 2021-2029 Housing Element 3-62 to -68 (July 2021). "' HCD, Affirmatively Furthering Fair Housing: Guidance for All Public Entities and for Housing Elements, 35-36 (April 2021). "' City of Newport Beach, Draft 2021-2029 Housing Element 3-62 to -68 (July 2021). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541-5157 RE: City of Newport Beach Draft 6th Cycle Housing Element October 26, 2021 p. 17 City therefore does not highlight that north Orange County has significantly lower access to opportunity than the City, as shown in Exhibit 5. Before the City can satisfy HCD, the City should include this regional data. Hence, the City must display regional disparities in access to opportunity, in addition to individually tackling each HCD-required question regarding access to opportunity. Disproportionate Housing Needs, Including Displacement. The City's section on disproportionate housing need, including displacement, does not meet State law. Although the City covers overcrowding, cost burden, and substandard housing, 135 the City does not have a section for homelessness, which HCD demands. 136 Before the City can adopt its housing element, the City needs to add this section. Furthermore, the City, as in its other sections, ignores regional patterns and trends. For instance, Exhibit 6 and 7 show how the north -south Orange County divide also persists for displacement risk and overcrowding, with areas north of the City experiencing high levels of displacement and overcrowding, while the City has low levels. Nonetheless, the City overlooks these regional problems. To comply with State law, the City must address these regional patterns and trends by including all relevant regional data and adding a section for homelessness. Site Inventory A jurisdiction's site inventory must be consistent with the jurisdiction's obligation to affirmatively further fair housing. 137 "Sites must be identified and evaluated relative to the full scope of the assessment of fair housing." 138 The jurisdiction should consider the following during its site inventory analysis: • how identified sites better integrate the community; • how identified sites exacerbate segregation; • whether the jurisdiction concentrated the RHNA by income group in certain areas of the community; • whether local data and knowledge uncover patterns of segregation and integration; and • how other relevant factors can contribute to the analysis. 139 The identified sites must attempt to improve conditions related to integration and segregation patterns and trends related to people with protected characteristics; racially or ethnically concentrated areas of poverty or affluence; disparities in access to opportunity for people with protected characteristics, including persons with disabilities; and disproportionate 131 City of Newport Beach, Draft 2021-2029 Housing Element 3-71 to -73 (July 2021). 131 HCD, Affirmatively Furthering Fair Housing: Guidance for All Public Entities and for Housing Elements, 3, 45 (April 2021). 137 Cal. Gov. Code § 65583.2(a); HCD, Affirmatively Furthering Fair Housing: Guidance for All Public Entities and for Housing Elements, 45 (April 2021). 131 HCD, Affirmatively Furthering Fair Housing: Guidance for All Public Entities and for Housing Elements, 3, 45 (April 2021). 139 HCD, Affirmatively Furthering Fair Housing: Guidance for All Public Entities and for Housing Elements, 45-46 (April 2021). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541-5157 RE: City of Newport Beach Draft 6th Cycle Housing Element October 26, 2021 P. 18 housing needs within the jurisdiction, including displacement risk. 140 Moreover, the jurisdiction must map the number of units at identified sites and include the sites' assumed affordability. 141 The jurisdiction should also address whether it groups sites near areas of concentrated affluence or areas of concentrated poverty. 142 For the City's site inventory to be "consistent with" its obligation to AFFH, the City should reconsider its site selection. The City does not discuss each issue area in the assessment of fair housing, as they relate to the City's site inventory. Instead, the City lists several statistics about racial, ethnic, and income -level concentrations and then concludes, "[t]he distribution of potential units does not disproportionately impact areas with larger concentrations of Non-white populations." 143 To rationalize its site selection, the City purports to "locat[e] units where there is a high level of access to important public services and transit." 144 Nevertheless, the City glossed over AFFH concerns with its site inventory. For example, the City clumps low-income housing on its northwest border with Costa Mesa, notwithstanding that these sites border a RECAP. See Exhibits 4 and 8. The City also clumped low-income housing by the John Wayne Airport, even though this area contains the City's highest concentration of nonwhite residents, as shown in Exhibit 9. Furthermore, Exhibit 10 establishes that the John Wayne Airport sites sit atop the City's largest proportion of households whose income fell below the poverty line. Finally, both the City located both the sites bordering Costa Mesa's RECAP and the John Wayne Airport sites in the City's only moderate resource areas, as displayed in Exhibit 11. Because the City has clumped low-income sites near its lowest -resource, highest -minority areas, the City's site inventory does not "overcome patterns of segregation and foster inclusive communities free from barriers that restrict access to opportunity based on protected characteristics." Therefore, the City did not select sites "consistent with" its obligation to AFFH. We recommend evaluating the City's site inventory with respect to each area of analysis in the assessment of fair housing. Only after doing so can the City determine whether its sites accord with its duty to AFFH. Identification and Prioritization of Contributing Factors As a result of the City's assessment of fair housing, the jurisdiction must identify and prioritize significant contributing factors to fair housing issues.145 A contributing factor is "[a] factor that creates, contributes to, perpetuates, or increases the severity of one or more fair 14' HCD, Affirmatively Furthering Fair Housing: Guidance for All Public Entities and for Housing Elements, 46, 63 (April 2021); Cal. Gov. Code Section 65583(c)(10)(A)(ii). 141 HCD, Affirmatively Furthering Fair Housing: Guidance for All Public Entities and for Housing Elements, 46, 63 (April 2021). 142 HCD, Affirmatively Furthering Fair Housing: Guidance for All Public Entities and for Housing Elements, 48 (April 2021). 143 City of Newport Beach, Draft 2021-2029 Housing Element 3-81 (July 2021). 144 City of Newport Beach, Draft 2021-2029 Housing Element 3-81 (July 2021). 145 HCD, Affirmatively Furthering Fair Housing: Guidance for All Public Entities and for Housing Elements, 49 (April 2021); Cal. Gov. Code Section 65583(c)(10)(A)(iii). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541-5157 RE: City of Newport Beach Draft 6th Cycle Housing Element October 26, 2021 P. 19 housing issues." 146 The jurisdiction must explain how it prioritized contributing factors. 147 The jurisdiction must follow these steps: (1) identify fair housing issues and significant contributing factors; (2) prioritize contributing factors, giving highest priority to those factors that (a) deny fair housing choice or access to opportunity or (b) negatively impact fair housing or civil rights compliance; and (3) discuss strategic approaches to inform and strongly connect these contributing factors to goals and actions. 148 The City incorrectly identifies and prioritizes contributing factors. In the City's AFFH section, the City's analysis of contributing factors precedes its site inventory examination. 149 This implies that the City did not base its contributing factors on its site inventory, shirking HCD's admonition that "[c]ontributing factors should be based on all the prior efforts and analyses: outreach, assessment of fair housing, and site inventory.""' Also, besides those contributing factors that the City incorporates from the Orange County analysis of impediments, none of the City's purported contributing factors meet the definition of a contributing factor. This is because the City regurgitates statistics cited in the assessment of fair housing, 151 without specifying what "creates, contributes to, perpetuates, or increases the severity of"the the fair housing issues that these statistics reveal. Lastly, the City does not prioritize contributing factors, which it must do according to California law. For these reasons, the City cannot adopt its AFFH section without amending its contributing factors section. First, the City should consult pages sixty-eight through seventy of HCD's Guidance Memo, which has example contributing factors. Next, we suggest ascertaining contributing factors only after analyzing the site inventory. Finally, we recommend prioritizing contributing factors. Goals, Policies, and Actions Jurisdictions must provide goals, policies, and a schedule of actions during the planning period to affirmatively further fair housing. 152 These goals, policies and actions must be based on the jurisdiction's identification and prioritization of contributing factors. 153 The jurisdiction's actions may address, but are not limited to, the following areas: • mobility enhancement, • new housing choices and affordability in high opportunity areas, • place -based strategies for preservation and revitalization, 146 HCD, Affirmatively Furthering Fair Housing: Guidance for All Public Entities and for Housing Elements, 64 (April 2021). 141 HCD, Affirmatively Furthering Fair Housing: Guidance for All Public Entities and for Housing Elements, 51 (April 2021). 141 HCD, Affirmatively Furthering Fair Housing: Guidance for All Public Entities and for Housing Elements, 49 (April 2021). 141 City of Newport Beach, Draft 2021-2029 Housing Element 3-77 to -78 (July 2021). 151 HCD, Affirmatively Furthering Fair Housing: Guidance for All Public Entities and for Housing Elements, 49-50 (April 2021). 151 City of Newport Beach, Draft 2021-2029 Housing Element 3-77 (July 2021). 152 HCD, Affirmatively Furthering Fair Housing: Guidance for All Public Entities and for Housing Elements, 51 (April 2021).; Cal. Gov. Section 65583(c)(10)(A)(iv)—(v). 151 Cal. Gov. Section 65583(c)(10)(A)(iv)—(v); AFFH Guidance Memo 63 (April 2021). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541-5157 RE: City of Newport Beach Draft 6th Cycle Housing Element October 26, 2021 p. 20 • displacement protection, and • other program areas. 154 The jurisdiction's actions must be meaningful and sufficient to overcome identified patterns of segregation and to affirmatively further fair housing."' Accordingly, actions must commit to specific deliverables, measurable metrics, or specific objectives. 156 Actions must also have definitive deadlines, dates, or benchmarks for implementation. 157 In contrast, "programs that `explore' or `consider' on an `ongoing' basis are inadequate ...."158 "Goals and policies must be created with the intention to have a significant impact, well beyond a continuation of past actions, and to provide direction and guidance for meaningful action." 159 None of the City's AFFH goals are sufficient. Goal 4A promises that the City "will continue to collaborate with the community, stakeholders, and appropriate organizations to address potential constraints to fair housing." This goal's timeframe is ongoing. 160 As a continuation of past actions without a specified timeline for implementation, this goal does not meet AFFH standards. Goal 7A, beyond requiring City to complete legally mandated code updates, only commits the City to "modify its existing policies" if "warranted to existing policies pursuant to State law."161 In other words, the City promises not to contradict State law. Simply complying with State law is not a "meaningful action." Similarly, Goal 7B provides that the City will "compl[y] with Senate Bill 2," which the City must otherwise do, and "continue to monitor the inventory of sites."' 62 Thus Goal 7B fails for the same reasons that Goals 4A and 7A fail—it is a continuation of past actions that only obligates the City to comply with existing law. Furthermore, Goal 7C's pledge to "explore the granting of regulatory incentives" 163 is inadequate, because it does not commit the City to actually changing regulatory incentives or otherwise create a measurable objective to determine successful implementation. Finally, Goal 7D, while having an ongoing timeframe, only undertakes to continue past fair housing services. 164 As Goal 7D continues past actions and has an ongoing timeline, it cannot suffice as an AFFH goal. Because of the foregoing reasons, the City must amend its AFFH goals. To satisfy State law, the City must include specific metrics and timelines for implementation. An ongoing timeline does not comply with State law. The City's goals do not meet State law for an additional reason—they are not based on the City's identification and prioritization of contributing factors. For example, the City "I Cal. Gov. Section 65583(c)(10)(A)(iv)—(v); AFFH Guidance Memo 63 (April 2021). 155 Cal. Gov. Section 8899.50(a)(1), (b); AFFH Guidance Memo 51-53 (April 2021). 156 HCD, Affirmatively Furthering Fair Housing: Guidance for All Public Entities and for Housing Elements, 52 (April 2021). 151 HCD, Affirmatively Furthering Fair Housing: Guidance for All Public Entities and for Housing Elements, 52 (April 2021). 151 HCD, Affirmatively Furthering Fair Housing: Guidance for All Public Entities and for Housing Elements, 52 (April 2021). 151 HCD, Affirmatively Furthering Fair Housing: Guidance for All Public Entities and for Housing Elements, 52 (April 2021). 160 City of Newport Beach, Draft 2021-2029 Housing Element 4-16 (July 2021). 161 City of Newport Beach, Draft 2021-2029 Housing Element 4-25 (July 2021). 162 City of Newport Beach, Draft 2021-2029 Housing Element 4-26 (July 2021). 163 City of Newport Beach, Draft 2021-2029 Housing Element 4-26 (July 2021). 161 City of Newport Beach, Draft 2021-2029 Housing Element 4-27 (July 2021). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541-5157 RE: City of Newport Beach Draft 6th Cycle Housing Element October 26, 2021 p. 21 designates "[i]ncreas[ing] the supply of affordable housing in high opportunity areas" 165 as a contributing factor. But the City does not pursue any mobility strategies, such as housing mobility counseling or voucher mobility, that would tackle this contributing factor. 166 Because the City's goals do not stem from its contributing factors, the City's goals do not align with HCD's standards or California law. We recommend that the City create goals and programs specifically designed to fix the contributing factors that the City found in the assessment of fair housing. Conclusion The housing element process is an opportunity for jurisdictions to meet the needs of California's residents, including needs for housing that is accessible to seniors, families, and workers and the needs of extremely low-, very low-, and low-income families for affordable housing. We encourage the City to revise its Housing Element to comply with state law and to specifically make an effort to assess the fair housing needs of its community and identify sites that affirmatively further fair housing and not perpetuate patterns of segregation. We look forward to working with the City in this effort to ensure that the housing needs of all residents of the City are addressed. Sincerely, THE PUBLIC LAW CENTER, BY: /s/ Richard Walker, Housing and Homelessness Prevention Unit, Senior Staff Attorney Alexis Mondares, Housing and Homelessness Prevention Unit, Staff Attorney 16s City of Newport Beach, Draft 2021-2029 Housing Element 3-77 (July 2021). 166 See HCD, Affirmatively Furthering Fair Housing: Guidance for All Public Entities and for Housing Elements, 72 (April 2021). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541-5157 • PUBLIC ApLAWCENTER PROVIDING ACCESS TO JUSTICE FOR ORANGE COUNTY'S LOW INCOME RESIDENTS April 30, 2021 City of Newport Beach 100 Civic Center Drive Newport Beach, CA 92660 RE: City of Newport Beach Draft 6th Cycle Housing Element Dear City Staff, We wish to provide a few additional comments in light of HCD's release of the Affirmatively Further Fair Housing: Guidance for All Public Entities and for Housing Elements (April 202 1) and the Newport Beach City Council Study Session held on Tuesday, April 27, 2021. We also refer the City to our previous two letters submitted on April 7, 2021 and April 26, 2021 for additional issues we have previously raised that the City should address in its Draft. Responses to April 27, 2021 City Council Study Session From our observations of the April 27, 2021 City Council Study Session, we have the following specific comments related to the directions given to City Staff with regards to revising the City's Draft 6th Cycle Housing Element: Accessory Dwelling Units As mentioned in our previous comment letters, we are concerned about the City's calculation of ADU production and the lack of support for the numbers that have been included in the Drafts thus far. With the direction of the City Council to increase the ADU numbers even further, to potentially 1000 units, we have even greater concerns that such production is unrealistic. However, we are encouraged by the fact that City Staff intends to survey the community and study this further. We hope that the City's ultimate determination regarding ADU production will be supported by reliable evidence and specific incentives to ensure a realistic probability that the City will meet its ADU production. Additionally, the City's ADU program should include some form of regular data collection, evaluation, and site inventory update. For example, the City should evaluate annually the number of ADUs produced and the rental rates at which they are available to the general population, if at all. Based on a review of data, the City should reevaluate its ADU predictions and in the event of a shortfall in production, revise its ADU program and incentives to boost production or ultimately identify additional sites to accommodate the shortfall. The City should also consider incentives that encourage residents to agree to affordability covenants for their ADUs. With the City's aggressive approach to ADU production, the specific details of its ADU program as well as its robust and regular evaluation of ADU production are essential. 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541- 5157 RE: City of Newport Beach Draft 6th Cycle Housing Element April 30, 2021 p. 2 No Net Loss Requirements As the City is aware, Government Code section 65863 ensures that jurisdictions accommodate their RHNA throughout the planning period. To accomplish this, HCD recommends that a jurisdiction create a buffer in the housing element inventory of at least 15 to 30 percent more capacity than required.' The City Council's direction to reduce the buffer of sites in its inventory to 5% is alarming, especially considering the potential need for a citywide vote to rezone newly identified sites within 180 days of approval of any development that results in a shortfall in the City's site inventory. This is also problematic considering that nearly 50% of the City's RHNA is allocated to housing for households with very low and low incomes. Unless the City is donating land or providing significant funding toward affordable housing, it is unlikely that the market will support the development of housing complexes where 50% or more of the units are affordable to very -low- and low-income families. Further, the City is planning on the percentages of units affordable to low- and very -low-income households to be 45% in the airport area, 65% in West Newport Mesa, 30% in both Dover -Westcliff and Newport Center, 35% in Coyote Canyon, and 20 % in Banning Ranch. However, the City is planning on adopting an inclusionary zoning ordinance requiring only 15% of the units be affordable to very -low-, low-, and moderate -income. With the development of just a few of the housing element sites, the City may quickly run out of inventory to cover its RHNA with only a 5% buffer. We encourage the City to reconsider its 5% buffer and adopt a buffer in line with staff's recommendation in Table B-1 on page SS34 of the Staff Report for the April 27 Study Session. Site Inventory Banning Ranch: We are concerned with the City's reliance on Banning Ranch as a suitable site for the development of housing, including affordable housing, during the 6th Cycle. As the City's Draft recognizes, Banning Ranch was identified in prior planning periods and the City previously approved a development at that location, however, the development was denied by the California Coastal Commission. In its findings, the California Coastal Commission indicated that approximately 19.7 acres were suitable for development, of which only 11 of those acres could be developed for residential housing structures.' Considering this history, without additional programs or supporting information determining the development potential of 46 acres at this site, it is unrealistic for the City to consider more than the 11 acres developable within the planning period. Coyote Canyo : Considering the landfill in the vicinity of this location and the correspondence the City received from State and Federal Fish & Wildlife agencies opposing development at the site, we are concerned about the viability of the site for housing development during the planning period without additional programs or supporting information to show the reliability of the site's development potential during the planning period. We also agree with comments made during the Study Session that locating 100% affordable developments at the site raises environmental justice concerns. ' See HCD's October 2, 2019 Memorandum regarding No Net Loss, Page 5, available at: https://www.hcd.ca.gov/community-development/housing-element/housing-element-memos/docs/sb-166-final.pdf 2 California Coastal Commission, Staff Report: Revised Findings, February 9, 2017, Agenda Item 12a, available at https://documents.coastal.ca.gov/reports/2017/2/th l2a-2-2017.pdf. 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541-5157 RE: City of Newport Beach Draft 6th Cycle Housing Element April 30, 2021 p. 3 Via Lido Plaza: We support the City's decision to include all sites in its inventory where property owners have affirmatively expressed interest in redeveloping their property for residential use and in being included in the site inventory, especially if a property owner has indicated a willingness to include affordable units in any development. Including such sites will help the City meet the increased requirement that jurisdictions demonstrate realistic development potential for nonvacant sites. Affirmatively Furthering Fair Housing With HCD's release of its Affirmatively Furthering Fair Housing: Guidance for All Public Entities and for Housing Elements (April 2021 Update)3, we encourage the City to review the HCD's Guidance and revise its analysis and programs as they relate to the duty to affirmatively further fair housing. While we address a few concerns specifically, the Guidance is an exceptional resource that the City should thoroughly review and follow when revising its Draft Housing Element. We also encourage the City to take advantage of HCD's AFFH Data and Mapping Resources to incorporate additional data into its analysis.4 Some particular points in the Guidance that we encourage the City to consider and apply to its Draft includes: Outreach and Key Stakeholders We encourage the City to ensure that its outreach includes a diverse group of organizations and individuals, particularly with its assessment of fair housing and in its selection of sites and development of programs that affirmatively further fair housing. Some key stakeholders the City should reach out to include: community-based and other organizations that represent protected class members, public housing authorities, housing and community development providers, lower income community members and households that include persons in protected classes, fair housing agencies, independent living centers, regional centers, homeless services agencies, churches and community service organizations that serve ethnic and linguistic minorities, etc.6 While we applaud the sometimes thankless and often tiresome work that the Housing Element Update Advisory Committee has committed to the Draft Housing Element over the last eight months, we are concerned that there has been a lack of diverse stakeholders included in the City's outreach efforts. Among the stakeholders listed above, the City should make particular efforts to engage renters, members of protected classes, individuals that rely on affordable housing, and local workers, who may not be Newport Beach residents, but would choose to live closer to their employment if affordable housing were available. Additional Analysis The City's "analysis must address patterns at a regional and local level and trends in patterns over time. The City is also "expected to use local data and knowledge to analyze local s Available at: https://www.hcd.ca.gov/community-development/affh/docs/affh document final_4-27-2021.pdf. a Available at: https:Haffh-data-resources-cahcd.hub.arcgis.com/. s All quotations, references, and page numbers in this section refer to HCD's Affirmatively Furthering Fair Housing: Guidance for All Public Entities and for Housing Elements (April 2021 Update) 6 Id. at 11, 21-22. 7 Id. at 24, 31, 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541-5157 RE: City of Newport Beach Draft 6th Cycle Housing Element April 30, 2021 p. 4 fair housing issues, including information obtained through community participation or consultation, such as narrative descriptions of people's lived experiences."' Other relevant factors the City should analyze include barriers in zoning and land use, such as "[p]redominance of single family uses and larger lot sizes in racially concentrated areas of affluence" or "[v]oter initiatives that restrict multifamily developments, rezoning to higher densities, height limits or similar measures that limit housing choices," etc.9 The Draft should also include an analysis of racially concentrated areas of affluence when analyzing patterns and trends of segregation and integration. to Site Inventory and AFFH While we applaud the City's efforts to redistribute affordable housing throughout its focus areas and reduce the concentration of affordable housing in the airport area, we are concerned that limiting affordable housing to the focus areas still creates or exacerbates patterns of segregation. Even though the City as a whole is predominately White and affluent, especially when compared with the region and state, simply viewing Figures 3-7, 3-8, and 3-9 still demonstrates that the City is focusing its affordable housing in areas of the City with higher percentages of Hispanic/Latinx, Non -White, and Low/Moderate Income populations than may exist elsewhere in the City. When evaluating its Site Inventory, the City needs to "discuss how the sites are identified in a manner that better integrates the community," explain how the identified sites impact "existing patterns of segregation and number of units relative to the magnitude of the RHNA by income group," and evaluate "whether the RHNA by income group is concentrated in areas of the community."i l Goals, Policies, and Actions As part of the AFFH component of the Draft Housing Element, the City needs to identify and prioritize contributing factors to fair housing issues then identify goals, policies and a schedule of actions with specific timelines, discrete steps, and measurable outcomes that will have a beneficial impact during the planning period. 12 "Goals and policies must be created with the intention to have a significant impact, well beyond a continuation of past actions, and to provide direction and guidance for meaningful action."13 The City's Policy Action 4A fails to meet the requirements of the necessary program to affirmatively further fair housing. Essentially, the City's program is to collaborate with other organizations and to review fair housing complaints simply to refer them to the appropriate government agency and to collaborate with other stakeholders to address potential constraints to fair housing, which may include analysis of barriers, review of historic policies, and "specific actions" that contribute to an inclusive community. First, the analysis of barriers to housing and a review of historic policies and restrictions that prevented protected classes from locating in Newport Beach should already have been done and included in the Housing Element as a part of the City's required analysis of Fair Housing. Essentially, the City has set a goal to do the analysis 8 Id. at 24 9 See page 26 for a lists of common zoning and land use barriers and investment barriers. 10 Id. at 33, 48. 11 Id. at 45 12 Id. at 49-51. 13 Id. at 52. 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541-5157 RE: City of Newport Beach Draft 6th Cycle Housing Element April 30, 2021 p. 5 in the future that is should have already incorporated into its Draft Housing Element. And while the City states that it may take "specific actions," to foster inclusivity, there are no details about these "specific actions." "Programs in the element must have specific commitments to deliverables, measurable metrics or objectives, definitive deadlines, dates, or benchmarks for implementation. Deliverables should occur early in the planning period to ensure actual housing outcomes. For example, programs to `explore' or `consider' on an `ongoing' basis are inadequate to demonstrate a beneficial impact in the planning period." 14 The City's AFFH Policy Action is exactly what HCD has deemed to be inadequate. We encourage the City to rework its fair housing analysis, identify barriers to fair housing, and develop specific programs and policy actions in line with HCD's guidance to affirmatively further fair housing and actually achieve beneficial impacts during the planning period. Site Inventory Based on the April 27, 2021 City Council Study Session, we understand that the City is taking additional time to review and revise its Draft, including the Site Inventory to increase the reliance on ADU production, which we interpret to mean a decrease in the list of sites identified or in the density of those sites. As we have requested before, when the City updates its Site Inventory, we would appreciate receiving a copy for review. Some concerns that we have previously identified and encourage City Staff to consider when revising the Site Inventory include: ■ Ensure that the Site Inventory correctly identifies whether a site was previously identified in the 5th Cycle; 15 ■ Specifically identify the sites to be rezoned in any rezoning policy action; ■ Ensure that the appropriate densities, or greater, and appropriate percentages of affordability, or greater, are designated to sites in accordance with housing element laws;16 ■ Provide the required analysis for sites less than 0.5 acres or greater than 10 acres to demonstrate that sites of that size were successfully developed during the prior planning period; 17 ■ Develop a policy action to identify City -owned nonvacant sites as surplus land, in accordance with the Surplus Land Act, during the planning period; 18 and ■ Identify the current uses of nonvacant sites and how such uses do not constitute an impediment to additional residential development during the planning period. 19 14 Id. at 52. 15 Cal. Gov. Code Section 65583.2(c). 16 Cal. Gov. Code Section 65583.2(c); Cal. Gov. Code Section 65583.2(c)(3)(B). 17 Cal. Gov. Code Section 65583.2(c)(2). " Cal. Gov. Code Section 65583.2(b)(3). 19 Cal. Gov. Code Section 65583.2(g)(2). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541-5157 RE: City of Newport Beach Draft 6th Cycle Housing Element April 30, 2021 p. 6 Conclusion We continue to be encouraged by the City's diligent efforts to comply with state housing element laws and meaningfully contemplate the housing needs of its community and how to meet the needs. While we are concerned with some of the recent direction City Staff has received related to the Draft Housing Element, as described above, we await the City's thorough review and investigation of those matters to determine the realistic development potential during the planning period of ADUs and identified sites. We are also excited by the new HCD Guidance and Data and Mapping Resources to assist the City in complying with its duty to affirmatively further fair housing. We look forward to continuing to work with the City through this process and if we can provide any additional assistance, please do not hesitate to contact us. Sincerely, THE PUBLIC LAW CENTER, BY: /s/ Richard Walker, Housing and Homelessness Prevention Unit, Senior Staff Attorney Alexis Mondares, Housing and Homelessness Prevention Unit, Legal Fellow 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541-5157 • PugLic P*T PROVIDING ACCESS LAW CENTER TO JUSTICE FOR ORANGE COUNTY'S LOW INCOME RESIDENTS April 26, 2021 City of Newport Beach City Council 100 Civic Center Drive Newport Beach, CA 92660 RE: City of Newport Beach Draft 6th Cycle Housing Element Dear City Staff, Public Law Center ("PLC") is a 501(c)(3) legal services organization that provides free civil legal services to low-income individuals and families across Orange County. Our services are provided across a range of substantive areas of law, including consumer, family, immigration, housing, and health law. Additionally, PLC provides legal assistance to community organizations. Further, the mission of our Housing and Homelessness Prevention Unit includes preserving and expanding affordable housing. Thus, I write on behalf of individuals in need of affordable housing in Orange County to comment on the City of Newport Beach's ("the City") Draft 6th Cycle Housing Element. Government Code Section 65583 requires that a housing element consist of an identification and analysis of existing and projected housing needs and a statement of goals, policies, quantified objectives, financial resources, and scheduled programs for the preservation, improvement, and development of housing.' Additionally, the housing element shall identify adequate sites for housing, including rental housing, factory -built housing, mobilehomes, and emergency shelters, and shall make adequate provision for the existing and projected needs of all economic segments of the community.2 Here, the City's Draft 6th Cycle Housing Element raises multiple concerns which we previously addressed in our letter to the Planning Commission on [DATE] and attached hereto as Appendix A. Additionally, we reiterate some of these issues below as well as raise additional concerns. It is our hope that we can work cooperatively with the City to address these concerns and ensure that the City's Draft 6"' Cycle Housing Element complies with all relevant state laws. Assessment of Housing Needs and Inventory of Resources and Constraints An assessment of housing needs and an inventory of resources and constraints relevant to the meeting of these needs.3 The assessment and inventory shall include all of the following: • An analysis of housing needs; • A calculation of extremely low-income housing needs; ' Cal. Gov. Code Section 65583. 2 Cal. Gov. Code Section 65583. ' Cal. Gov. Code Section 65583(a). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541- 5157 RE: City of Newport Beach Draft 6th Cycle Housing Element April 26, 2021 p. 2 • An analysis of housing characteristics; • An inventory of land suitable for residential development; • An identification of zones for emergency shelters; • An analysis of governmental and nongovernmental constraints; • An analysis of special housing needs; • An analysis of opportunities for energy conservation; and • An analysis of assisted housing developments. Emergency Shelters In addition to the concerns about emergency shelters raised in our letter submitted to the Planning Commission on April 7, 2021 (see Appendix A), the City mentions a Memorandum of Understanding with the City of Costa Mesa "for the funding, development and Shared Use of a Temporary Homeless Shelter Facility."4 According to the City, the "shared shelter would enable both agencies to provide services to their respective homeless populations without duplicating efforts and thus better leveraging their respective resources."5 This Memorandum of Understanding appears to be a multijurisdictional agreement between the City and the City of Costa Mesa to provide emergency shelter space for its unhoused populations. A local government may satisfy all or part of its requirement to identify a zone or zones suitable for the development of emergency shelters by adopting and implementing a multijurisdictional agreement, with a maximum of two other adjacent communities, that requires the participating jurisdictions to develop at least one year-round emergency shelter within two years of the beginning of the planning period .6 The agreement shall allocate a portion of the new shelter capacity to each jurisdiction as credit toward its emergency shelter need, and each jurisdiction shall describe how the capacity was allocated as part of its housing element .7 Each member jurisdiction of a multijurisdictional agreement shall describe in its housing element all of the following: • How the joint facility will meet the jurisdiction's emergency shelter need.' • The jurisdiction's contribution to the facility for both the development and ongoing operation and management of the facility.9 • The amount and source of the funding that the jurisdiction contributes to the facility. 10 The aggregate capacity claimed by the participating jurisdictions in their housing elements shall not exceed the actual capacity of the shelter." 4 City of Newport Beach, Draft 2021-2029 Housing Element, A-34 (March 2021). 5 City of Newport Beach, Draft 2021-2029 Housing Element, A-34 (March 2021). 6 Cal. Gov. Code Section 65583(d)(1). ' Cal. Gov. Code Section 65583(d)(2). ' Cal. Gov. Code Section 65583(d)(3)(A). 9 Cal. Gov. Code Section 65583(d)(3)(B). 10 Cal. Gov. Code Section 65583(d)(3)(C). " Cal. Gov. Code Section 65583(d)(4). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541- 5157 RE: City of Newport Beach Draft 6th Cycle Housing Element April 26, 2021 p. 3 However, the City has not provided any detail about the agreement with the City of Costa Mesa. Without any further information, the City cannot use this Memorandum of Understanding to satisfy its emergency shelter need. Governmental Constraints The housing element must contain an analysis of potential and actual governmental constraints upon the maintenance, improvement, or development of housing for all income levels, including the types of housing identified in Section 65583(c)(1),12 and for persons with disabilities, 13 including land use controls, building codes and their enforcement, site improvements, fees and other exactions required of developers, local processing and permit procedures, and any locally adopted ordinances that directly impact the cost and supply of residential development. 14 The analysis shall also demonstrate local efforts to remove governmental constraints that hinder the locality from meeting its share of the RHNA and from meeting the need for housing for persons with disabilities, supportive housing, transitional housing, and emergency shelters. 15 The City describes Measure S, which amended the Newport Beach City Charter by adding Section 423.16 Section 423 requires voter approval of certain amendments of the Newport Beach General Plan, including the following: • An Amendment that modifies the allowed use(s) of the property or area that is the subject of the Amendment such that the proposed use(s) generate(s) more than 100 morning or evening peak hour trips than are generated by the allowed use(s) before the Amendment; • An Amendment that authorizes an increase in floor area for the property or area that is the subject of the Amendment that exceeds 40,000 square feet when compared to the General Plan before approval of the Amendment; • An Amendment that authorizes an increase in the number of dwelling units for the property or area that is the subject of the Amendment that exceeds 100 dwelling units when compared to the General Plan before approval of the Amendment; or • The increase in morning or evening peak hour trips, floor area or dwelling units resulting from the Amendment when added to 80% of the increases in morning or evening peak hour trips, floor area or dwelling units resulting from Prior Amendments exceeds one or 12 "Housing for all income levels, including multifamily rental housing, factory -built housing, mobilehomes, housing for agricultural employees, supportive housing, single -room occupancy units, emergency shelters, and transitional housing." Cal. Gov. Code Section 65583(c)(1). " "`Developmental disability' means a disability that originates before an individual attains 18 years of age, continues, or can be expected to continue, indefinitely, and constitutes a substantial disability for that individual. As defined by the Director of Developmental Services, in consultation with the Superintendent of Public Instruction, this term shall include intellectual disability, cerebral palsy, epilepsy, and autism. This term shall also include disabling conditions found to be closely related to intellectual disability or to require treatment similar to that required for individuals with an intellectual disability, but shall not include other handicapping conditions that are solely physical in nature." Cal. Welfare and Institutions Code Section 4512, Cal. Gov. Code Section 65583(a)(7). 14 Cal. Gov. Code Section 65583(a)(5). " Cal. Gov. Code Section 65583(a)(5). 16 City of Newport Beach, Draft 2021-2029 Housing Element, 3-26 (March 2021). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541- 5157 RE: City of Newport Beach Draft 6th Cycle Housing Element April 26, 2021 p. 4 more of the voter approval thresholds in Section 423 as specified in Subsection 1, 2 or 3.17 The City acknowledges that "Section 423 restricts growth throughout the community as it may discourage housing development projects, and particularly affordable housing projects."18 However, the City does not demonstrate how it will address these restrictions. "Policy Action 3N: Housing Impact Studies" states that "the City will continue to study housing impacts of proposed larger -scale, significant commercial/industrial projects during the development review process."19 While doing so, "prior to project approval, a housing impact assessment shall be developed by the City with the active involvement of the developer. Such assessment shall indicate the magnitude of jobs to be created by the project, where housing opportunities are expected to be available, and what measures (public and private) are requisite, if any, to ensure an adequate supply of housing for the projected labor force of the project and for any restrictions on development due to the `Charter Section 423' initiative."20 This program does not address on how a "housing impact assessment" will help the City overcome issues arising from Section 423 and, similar to its other programs, lacks specific action steps to implement the program, proposed measurable outcomes, and a firm commitment to implement the program. 21 Without such detail, it is unlikely that this program will help the City overcome this governmental constraint and Section 423 will continue to restrict housing development. Nongovernmental Constraints The housing element must also analyze potential and actual nongovernmental constraints upon the maintenance, improvement, or development of housing for all income levels, including the availability of financing, the price of land, the cost of construction, the requests to develop housing at densities below those anticipated in the analysis required by Section 65583.2(c), and the length of time between receiving approval for a housing development and submittal of an application for building permits for that housing development that hinder the construction of a locality's share of the RHNA.22 The analysis shall also demonstrate local efforts to remove nongovernmental constraints that create a gap between the locality's planning for the development of housing for all income levels and the construction of that housing. 23 Here, the City identifies land costs, construction costs, available financing, and economic constraints such as the high price of homes and cost of living as possible nongovernmental constraints that affect the maintenance, improvement, and development of housing for all income levels. 24 However, the City merely describes these constraints and determines that available 17 City of Newport Beach, Draft 2021-2029 Housing Element, 3-26 — 3-27 (March 2021). le City of Newport Beach, Draft 2021-2029 Housing Element, 3-27 (March 2021). 9 City of Newport Beach, Draft 2021-2029 Housing Element, 4-14 (March 2021). 21 City of Newport Beach, Draft 2021-2029 Housing Element, 4-14 (March 2021). 21 California Department of Housing and Community Development, Building Blocks, Program Overview and Quantified Objectives, https://hed.ca.gov/community-development/building-blocks/program-requirements/program- overview.shtml (last visited Apr. 4, 2021). 22 Cal. Gov. Code Section 65583(a)(6). 21 Cal. Gov. Code Section 65583(a)(6). 24 City of Newport Beach, Draft 2021-2029 Housing Element, 3-2 — 3-5 (March 2021). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541- 5157 RE: City of Newport Beach Draft 6th Cycle Housing Element April 26, 2021 p. 5 financing is not a constraint .25 The City fails to demonstrate any local effort to remove these nongovernmental constraints to better provide housing for all income levels and should include this analysis in its neat draft. Programs The housing element must include programs that allow the jurisdiction to achieve its stated housing goals and objectives. Programs must set forth a schedule of actions during the planning period, each with a timeline for implementation. 26 The jurisdiction may recognize that certain programs are ongoing, such that there will be beneficial impacts of the programs within the planning period, that the local government is undertaking or intends to undertake to implement the policies and achieve the goals and objectives of the housing element .27 The jurisdiction may do so through the administration of land use and development controls, the provision of regulatory concessions and incentives, the utilization of appropriate federal and state financing and subsidy programs when available, and the utilization of moneys in a low- and moderate -income housing fund of an agency if the locality has established a redevelopment project area pursuant to the Community Redevelopment Law. 28 To make adequate provision for the housing needs of all economic segments of the community, the program shall address housing issues such as inadequate site inventories, meeting lower income housing needs, removing constraints, maintaining affordable housing, promoting affirmatively furthering fair housing, preserving assisted housing developments, encouraging accessory dwelling units, and facilitating public participation. To make these programs most effective, the Department of Housing and Community Development ("HCD") recommends jurisdictions include the following: definite time frames for implementation; an identification of agencies and officials responsible for implementation; a description of the local government's specific role in program implementation; a description of the specific action steps to implement the program; proposed measurable outcomes; demonstration of a firm commitment to implement the program; and an identification of specific funding sources, where appropriate. 29 Addressing Constraints The housing element shall include a program to address and, where appropriate and legally possible, remove governmental and nongovernmental constraints to the maintenance, improvement, and development of housing, including housing for all income levels and housing for persons with disabilities. 30 The program shall remove constraints to, and provide reasonable accommodations for housing designed for, intended for occupancy by, or with supportive services for, persons with disabilities. 31 25 City of Newport Beach, Draft 2021-2029 Housing Element, 3-3 (March 2021). 26 Cal. Gov. Code Section 65583(c). 27 Cal. Gov. Code Section 65583(c). 28 Cal. Gov. Code Section 65583(c). 29 California Department of Housing and Community Development, Building Blocks, Program Overview and Quantified Objectives, https://hed.ca.gov/community-development/building-blocks/program-requirements/program- overview.shtml (last visited Apr. 4, 2021). 30 Cal. Gov. Code Section 65583(c)(3). 3i Cal. Gov. Code Section 65583(c)(3). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541- 5157 RE: City of Newport Beach Draft 6th Cycle Housing Element April 26, 2021 p. 6 As discussed above, Measure S, land costs, construction costs, available financing, and economic constraints such as the high price of homes and cost of living were identified as governmental and nongovernmental constraints to the maintenance, improvement, and development of housing. However, the City's attempt to address Measure S is inadequate and the City has not identified how its programs specifically address the nongovernmental constraints. The City should follow HCD guidance to create effective programs that address these constraints. Fair Housing Assessment and Affirmatively Furthering Fair Housing The housing element shall include a program to affirmatively further fair housing. 32 The program shall include an assessment of fair housing in the jurisdiction that shall include all of the following components: • A summary of fair housing issues in the jurisdiction and an assessment of the jurisdiction's fair housing enforcement and fair housing outreach capacity. 33 • An analysis of available federal, state, and local data and knowledge to identify integration and segregation patterns and trends, racially or ethnically concentrated areas of poverty, disparities in access to opportunity, and disproportionate housing needs within the jurisdiction, including displacement risk .34 • An assessment of the contributing factors for the fair housing issues. 35 • An identification of the jurisdiction's fair housing priorities and goals, giving highest priority to those factors that limit or deny fair housing choice or access to opportunity, or negatively impact fair housing or civil rights compliance, and identifying the metrics and milestones for determining what fair housing results will be achieved .36 • Strategies and actions to implement those priorities and goals, which may include, but are not limited to, enhancing mobility strategies and encouraging development of new affordable housing in areas of opportunity, as well as place -based strategies to encourage community revitalization, including preservation of existing affordable housing, and protecting existing residents from displacement .37 A jurisdiction that completes or revises an assessment of fair housing 38, or an analysis of impediments to fair housing choice 39, may incorporate relevant portions of that assessment or revised assessment of fair housing or analysis or revised analysis of impediments to fair housing into its housing element .40 32 Cal. Gov. Code Section 65583(c)(10)(A). " Cal. Gov. Code Section 65583(c)(10)(A)(i). 34 Cal. Gov. Code Section 65583(c)(10)(A)(ii). 35 Cal. Gov. Code Section 65583(c)(10)(A)(iii). 36 Cal. Gov. Code Section 65583(c)(10)(A)(iv). 17 Cal. Gov. Code Section 65583(c)(10)(A)(v). " Pursuant to Subpart A (commencing with Section 5.150) of Part 5 of Subtitle A of Title 24 of the Code of Federal Regulations, as published in Volume 80 of the Federal Register, Number 136, page 42272, dated July 16, 2015. Cal. Gov. Code Section 65583(c)(10)(B). 39 In accordance with the requirements of Section 91.225 of Title 24 of the Code of Federal Regulations in effect before August 17, 2015. Cal. Gov. Code Section 65583(c)(10)(B). 41 Cal. Gov. Code Section 65583(c)(10)(B). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541- 5157 RE: City of Newport Beach Draft 6th Cycle Housing Element April 26, 2021 p. 7 The housing element shall include a program to promote and affirmatively further fair housing opportunities and promote housing throughout the community or communities for all persons regardless of race, religion, sex, marital status, ancestry, national origin, color, familial status, or disability, and other characteristics protected by the California Fair Employment and Housing Act and any other state and federal fair housing and planning law. 41 Affirmatively furthering fair housing includes taking meaningful action to "overcome patterns of segregation and foster inclusive communities" and to "address significant disparities in housing needs and in access to opportunity."42 In order to fully address issues of segregation and integration and to affirmatively further fair housing, the City should do an analysis of racially concentrated areas of affluence ("RCAAs"). RCAAs may "represent a public policy issue to the extent that they have been created and maintained through exclusionary and discriminatory land use and development practices."43 In order to truly foster an inclusive community "free from barriers that restrict access to opportunity based on protected classes, 44,, the City must analyze the fair housing issues on a more regional level as addressed in our previous letter. Preserving Assisted Housing Developments The housing element shall include a program to preserve for lower income households the assisted housing developments identified pursuant to Section 65583(a)(9).45 The program for preservation of the assisted housing developments shall utilize, to the extent necessary, all available federal, state, and local financing and subsidy programs identified in Section 65583(a)(9), except where a community has other urgent needs for which alternative funding sources are not available. 46 The program may include strategies that involve local regulation and technical assistance. 47 The City indicates that over 40% of its existing stock of assisted and affordable housing is already at risk of expiration of affordability covenants .48 However, the City's Policy Action 2C is reactionary, simply waiting for notification from HCD that a property owner has decided to end the affordability of the existing units. 49 While an important program, with 40% of existing stock of assisted and affordable housing already at risk of conversion, the City should expand its program to include more proactive steps to reach out to property owners to determine the status of these units and the future plans of property owners to begin the process now of preventing a future loss of these important units and ensuring their continued affordability. 41 Cal. Gov. Code Section 65583(c)(5). 42 Cal. Gov. Code Section 8899.50(a)(1). 45 U.S. Department of Housing and Urban Development, Office of Policy Development and Research, Racially Concentrated Areas ofAfjluence: A Preliminary Investigation, Available at https://www.huduser.gov/portal/periodicals/citysepe/vol2l num 1/ch4.pdf. 44 Cal. Gov. Code Section 65584(e). 41 Cal. Gov. Code Section 65583(c)(6). 46 Cal. Gov. Code Section 65583(c)(6). 41 Cal. Gov. Code Section 65583(c)(6). 48 City of Newport Beach, Draft 2021-2029 Housing Element, 3-66 (March 2021). 49 City of Newport Beach, Draft 2021-2029 Housing Element, 4-9 (March 2021). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541- 5157 RE: City of Newport Beach Draft 6th Cycle Housing Element April 26, 2021 P. 8 Accessory Dwelling Units The housing element shall include a program to develop a plan that incentivizes and promotes the creation of accessory dwelling units that can be offered at affordable rent, as defined in Health and Safety Code Section 50053, for very low, low-, or moderate -income households. 50 The City claims that Policy Action 1H: Accessory Dwelling Unit Construction will aggressively support ADU construction and result in increased opportunities for housing, including affordable units. 51 While the program's vague support and incentives are aimed at increasing the number of ADUs built, there is no indication that the program will actually make these ADUs affordable. Without specific actions to provide affordable units, this program does not satisfy state law. Site Inventory At the City of Newport Beach Planning Commission meeting on April 8, 2021, Staff presented the Commission with a "Revised Housing Element Update Table with Redistribution of Units" to address segregation and affirmatively furthering fair housing concerns. 52 However, Staff provided alternate scenarios without specific reference of which sites would be included in a new site inventory. Without this information, it is impossible to determine whether the new sites would meet statutory requirements for adequate sites. We ask that the City provide this information to the public as soon as possible so that we can work with the City to ensure that these concerns are properly addressed prior to submitting a draft to HCD. Conclusion The housing element process is an opportunity for jurisdictions to meet the needs of California's residents, including needs for housing that is accessible to seniors, families, and workers and the needs of extremely low-, very low-, and low-income families for affordable housing. We appreciate the City's efforts to accomplish this important and essential task and look forward to continuing to work with the City in those efforts Sincerely, THE PUBLIC LAW CENTER, BY: /s/ Richard Walker, Housing and Homelessness Prevention Unit, Senior Staff Attorney Alexis Mondares, Housing and Homelessness Prevention Unit, Legal Fellow 50 Cal. Gov. Code Section 65583(c)(7). 51 City of Newport Beach, Draft 2021-2029 Housing Element, 4-7 (March 2021). 52 City of Newport Beach, Planning Commission Meeting, 3.0 Initial Draft of the General Plan Housing Element Update PA2017-141, 15, https:Heems.newportbeachea.gov/Web/0%doe/2674679/3.0_Initial%20Draft%20oP'/o20the%20General%20Plan%20 Housing%20Element%20Update_PA2017-141.pdf (April 8, 2021). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541- 5157 RE: City of Newport Beach Draft 6th Cycle Housing Element April 26, 2021 P. 9 Appendix A: Public Law Center Letter to the City of Newport Beach Planning Commission Regarding the Citv's Draft 6th Cycle Housing Element 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541- 5157 PUBLIC LAWCENTER PROVIDING ACCESS TO JUSTICE FOR ORANGE COIINTYS LOW INCOME RESIDENTS April 7, 2021 City of Newport Beach Planning Commission 100 Civic Center Drive, Newport Beach, CA 92660 Dear Commission Members: The Public Law Center C'PLC ) is a 501(c)(3) legal services organization that provides Ree civil legal services to low-income individuals and families across Orange County. Our services are provided across a range of substani ve areas oflaw, including consumer, family, migration, housing, and health law. Additionally, PLC provides legal assistance to community organizations. Further, the mission of ourHousing and Homelessness Prevention Unitincludes preserving and expanding affordable housing. Thus, we write on behalf of individuals in need of affordable housing in Orange County to comment on He Qty ofNewport Beach's C`the Qty') Draft 6th Cycle Housing Element (the Draft"). Through the housing element process, local governments must assess their existing and projected housing needs and constraints and create a detailed plan to meet those needs and address any constraints. Some of the requirements include addressing the need for emergency shelter, identifying adequate sites to meet the jurisdictions housing need and implementing programs and policies to achieve these goals. While we are still in the process of reviewing all of He Draft, we wish to provide some preliminary comments for the Planning Commission and City Staff to consideras they continue to revise the Draft Additionally, we understand from the Staff Report for the Planning Commission Agenda that the City has already made some changes to the previously released Draft in an attempt to reduce concentrations of affordable housing in He vicinity of the airyort and distribute affordable housing throughout other areas of focus in the City. However, we have not been able to locate a copy of my revised Daft as a revised Draft or re details on these specific changes were not attached to the Staff Report only data describing He proposed revisions. Having not had a chance to review these revisions to the Draft, all of our comments are based on the previously issued Daft without the proposed revisions referenced in He Staff Report We have however, kept in mind that the City is attempting to address previous comments about the distribution of affordable housing in He site selection. Emergency Shelters Under Government Code Section 65583(a)(4)(A), a housing element shall contain an identification of a zone or zones where emergency shelters are allowed as a permitted use without a conditional use or other discretionary permit The identified zone or zones shall 601 Cwr CMm'Orie We,a ANa Au CA 95901-4002 (714) All 1010 Fa, (pld)All 5157 include sufficient capacity to accommodate the need for emergency shelter.' Each local government must identify a zone or zones that can accommodate at least one year-round emergency shelter.2 The City identifies that the Office Airport zoning district ("OA") and the Private Institutions Coastal zoning district ("PI') permit emergency shelters. By allowing emergency shelters to be placed on any of the 98 parcels in these districts, the City claims there are adequate sites available "for the potential development of emergency shelters in the City."3 However, these claims do not specifically explain whether these zoning districts allow emergency shelters without a conditional use or other discretionary permit, whether these zones will be able to accommodate the City's need for emergency shelter, or whether the zone could accommodate a year-round emergency shelter. To better demonstrate that the City has met this requirement, it should include more detail about OA and PI zoning and how these zones allow for the required emergency shelters and what parcels within those zones are realistically available for development of or conversion to a shelter. Additionally, the local government must demonstrate that existing or proposed permit processing, development, and management standards are objective and encourage and facilitate the development of, or conversion to, emergency shelters.' Here, the City does not provide the requisite information about its existing permit processing, development, or management standards for emergency shelters. The City should include this information to better demonstrate its ability to encourage and facilitate emergency shelters. Although State law allows local governments to include a program to amend its zoning ordinance to meet these requirements, the City's program is vague, making it difficult to assess whether the City can comply with housing element law in the futures Specifically, "Policy Action 6F: Emergency Shelters, Transitional and Supportive Housing" is intended to amend the City's Municipal Code to "permit supportive housing as a use permitted by right in all zones where multiple family and mixed-use development is permitted," "address permit requirements, objective standards, analysis of annual and season needs, and parking and other applicable standards and provisions," and "ensure Emergency Shelters, Transitional and Supportive Housing are permitted in appropriate zones, consistent with State law."6 This proposed policy action simply states that the City will comply with State law within 12 months of the Housing Element adoption. It does not provide details about what the standards will contain or how the standards will encourage and facilitate the development of, or conversion to, emergency shelters. t Cal. Gov. Code Section 65583(a)(4)(A). 2 Cal. Gov. Code Section 65583(a)(4)(A). 3 City of Newport Beach, Draft 2021-2029 Housing Element, 3-25 (March 2021). ' Cal. Gov. Code Section 65583(a)(4)(A). 5 Cal. Gov. Code Section 65583(a)(4)(A). 6 City of Newport Beach, Draft 2021-2029 Housing Element, 4-23 (March 2021). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541-5157 Assessing Emergency Shelter Need The need for emergency shelter shall be assessed based on (1) the most recent point -in - time count conducted before the start of the planning period, (2) the need for emergency shelter based on number of beds available on a year-round and seasonal basis, (3) the number of shelter beds that go unused on an average monthly basis within a one-year period, and (4) the percentage of those in emergency shelters that move to permanent housing solutions.7 Here, the City has used a point -in -time count to identify 64 unsheltered people experiencing homelessness within the jurisdiction.$ However, the City fails to analyze the need for emergency shelter, the number of shelter beds that are unused, or how many people in emergency shelters move to permanent housing solutions. Such an analysis would help the City better determine which of the 98 available parcels are needed to accommodate its need. Site Inventory A housing element must include an inventory of land suitable and available for residential development, including vacant sites and sites having realistic and demonstrated potential for redevelopment during the planning period to meet the locality's housing need for all income levels.9 A jurisdiction may identify sites by a variety of methods, such as redesignating property to a more intense land use category, increasing the density allowed within one or more categories, and identifying sites for accessory dwelling units ("ADUs").10 The site inventory must provide for a variety of types of housing, including multifamily rental housing, factory - built housing, mobilehomes, housing for agricultural employees, supportive housing, single - room occupancy units, emergency shelters, and transitional housing. 11 Lower Income Sites If a jurisdiction designates sites that have been previously identified, sites smaller than half an acre, or sites larger than ten acres to accommodate its lower income housing needs, the sites must satisfy extra criteria. 12 Previously Identified Sites If a jurisdiction identifies nonvacant sites to satisfy its lower income housing need, it must note whether the site has been identified in a prior housing element or has been included in two or more consecutive planning periods that was not approved to develop a portion of the locality's housing need. The City has marked the following lower income sites as identified in its 5th Cycle Housing Element: Site 132, 133, and 134.13 However, from our review of the Draft and the 5th Cycle Housing Element, the City failed to acknowledge that the following sites were also previously identified: 7 Cal. Gov. Code Section 65583(a)(7). 8 City of Newport Beach, Draft 2021-2029 Housing Element, 2-28 (March 2021). 9 Cal. Gov. Code Section 65583(a)(3). 10 Cal. Gov. Code Section 65583.l(a). 11 Cal. Gov. Code Section 65583.2(c). 12 Cal. Gov. Code Section 65583.2(c). 13 City of Newport Beach, Draft 2021-2029 Housing Element, B-25 (March 2021). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541-5157 • Site 66: formerly Area 9 John Wayne Airport Area Site 2b; • Site 69: formerly Area 9 John Wayne Airport Area Site 2c; • Site 71: formerly Area 9 John Wayne Airport Area Site lh; • Site 72: formerly Area 9 John Wayne Airport Area Site lf; • Site 75: formerly Area 9 John Wayne Airport Area Site 2i; • Site 76: formerly Area 9 John Wayne Airport Area Site 2f; • Site 79: formerly Area 9 John Wayne Airport Area Site le; • Site 81: formerly Area 9 John Wayne Airport Area Site 2h; • Site 84: formerly Area 9 John Wayne Airport Area Site 2j; • Site 88: formerly Area 9 John Wayne Airport Area Site 2e; • Site 89: formerly Area 9 John Wayne Airport Area Site 2a, • Site 137: formerly Area 2 Dover Drive/Westcliff Drive Site 2; • Site 138: formerly Area 2 Dover Drive/Westcliff Drive Site 3; • Site 139: formerly Area 2 Dover Drive/Westcliff Drive Site 1; and • Site 214: formerly Area 8 Newport Center Site 8.14 Further, a nonvacant site identified in a prior housing element cannot be deemed adequate to accommodate a portion of the housing need for lower income households unless the site is zoned at an appropriate density and the site is subject to a program in the housing element requiring rezoning within three years of the beginning of the planning period to allow residential use by right for housing developments in which at least 20 percent of the units are affordable to lower income units. 15 Although these sites are subject to "Policy Action 1G: 5th Cycle Housing Element Sites", which requires rezoning within three years of the beginning of the planning period to allow residential use by right for housing developments in which at least 20 percent of the units are affordable to lower income units, the units are not appropriately zoned. 16 The appropriate residential density is based on whether the jurisdiction is an unincorporated area within a metropolitan county, an incorporated city within a nonmetropolitan county, a nonmetropolitan county with a micropolitan area, a suburban jurisdiction, or a jurisdiction within a metropolitan county. 17 According to the U.S. Census Bureau, Orange County is a metropolitan county within the Los Angeles -Long Beach -Anaheim Metropolitan Statistical Area 18 As a jurisdiction within a metropolitan county, the appropriate residential density is at least 30 units per acre. 19 As seen below, none of the City's previously identified nonvacant sites for lower income households are currently zoned at the appropriate density: • Site 66: existing density - 0, rezoned density - 50; 14 City of Newport Beach, Draft 2021-2029 Housing Element, B -20-B-31 (March 2021). 15 Cal. Gov. Code Section 65583.2(c). 16 City of Newport Beach, Draft 2021-2029 Housing Element, 4-6 (March 2021). 17 Cal. Gov. Code Section 65583.2(c)(3)(B). 18 U.S. Census Bureau, https://www2.census.gov/geo/maps/metroarea/us_wall/Mar2020/CBSA_WallMap_Mar2020.pdf (last visited Mar. 16, 2021), Employment Development Department of State of California, https://www.labormarketinfo.edd.ca.gov/definitions/metropolitan-statistical-areas.html (last visited Mar. 16, 2021). 19 Cal. Gov. Code Section 65583.2(c)(3)(B). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541-5157 • Site 69: existing density - 0, rezoned density - 50; • Site 71: existing density - 0, rezoned density - 50; • Site 72: existing density - 0, rezoned density - 50; • Site 75: existing density - 0, rezoned density - 50; • Site 76: existing density - 0, rezoned density - 50; • Site 79: existing density - 0, rezoned density - 50; • Site 81: existing density - 0, rezoned density - 50; • Site 84: existing density - 0, rezoned density - 50; • Site 88: existing density - 0, rezoned density - 50; • Site 89: existing density - 0, rezoned density - 50; • Site 132: existing density - 21, rezoned density - 30; • Site 133: existing density - 18, rezoned density - 30; • Site 134: existing density - 15, rezoned density - 30; • Site 137: existing density - 26, rezoned density - 30; • Site 138: existing density - 26, rezoned density - 30; • Site 139: existing density - 26, rezoned density - 30; and • Site 214: existing density - 0, rezoned density - 45.20 Without meeting the appropriate density, these sites cannot be deemed adequate to accommodate a portion of the housing need for lower income households. We assume that the "rezoned density" is the proposed density at which the sites will be rezoned through the "Policy Action 1G," this program should be clearer and include more specifics about how and what sites will be rezoned to meet state requirements. Site Size If a site is smaller than half an acre or larger than ten acres, it cannot be deemed adequate to accommodate lower income housing unless the locality can demonstrate that sites of an equivalent size were successfully developed during the prior planning period for an equivalent number of lower income housing units as projected for the site. 21 Alternatively, the locality may provide other evidence to the California Department for Housing and Community Development ("HCD") that the site is adequate to accommodate lower income housing. 22 The following identified sites are either smaller than half an acre or larger than ten acres: • Site 56: gross acreage - .26, net acreage - .26; • Site 103: gross acreage - .29, net acreage - .29; • Site 105: gross acreage - .29, net acreage - .29; • Site 110: gross acreage - 130.87, net acreage - 0; • Site 111: gross acreage - 74.64, net acreage - 0; • Site 112: gross acreage - 65.05, net acreage - 0; • Site 113: gross acreage - 51, net acreage - 0; • Site 114: gross acreage - 44.78, net acreage - 0; • Site 115: gross acreage - 41.2, net acreage - 0; 20 City of Newport Beach, Draft 2021-2029 Housing Element, B -20-B-31 (March 2021). 21 Cal. Gov. Code Section 65583.2(c)(2). 22 Cal. Gov. Code Section 65583.2(c)(2). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541-5157 • Site 116: gross acreage - 19.35, net acreage - 0; • Site 117: gross acreage - 15.76, net acreage - 0; • Site 118: gross acreage - 14.32, net acreage - 0; • Site 119: gross acreage - 12.51, net acreage - 0; • Site 120: gross acreage - 11. 48, net acreage - 0; • Site 121: gross acreage - 10.81, net acreage - 0; • Site 122: gross acreage - 6.52, net acreage - 46; • Site 126: gross acreage - .37, net acreage - .37; • Site 128: gross acreage - .2 1, net acreage - .21; • Site 131: gross acreage - 243.23, net acreage - 22; • Site 132: gross acreage - .14, net acreage - .14; • Site 133: gross acreage - .11, net acreage - .11; • Site 134: gross acreage - .06, net acreage - .06; • Site 216: gross acreage - .23, net acreage - .23; and • Site 133: gross acreage - .23, net acreage - .23 .23 While the Draft is not clear on what is the difference between gross acreage and net acreage of identified sites or on which acreage is being used to calculate capacity, regardless the Draft does not meet the requirements for identifying sites less than 0.5 acres or greater than 10 acres. The City has not demonstrated that similarly sized sites were successfully developed during the 5th Cycle for an equivalent number of lower income housing units and has not stated that it is able to provide HCD with other evidence that the sites are adequate to accommodate lower income housing. Without this information, these sites cannot be considered adequate for lower income housing. Nonvacant Sites If a jurisdiction designates a site that is nonvacant, it must describe the existing use of the property. 24 Most of the sites included in the City's site inventory are nonvacant. Further, if a jurisdiction designates a site that is nonvacant and owned by the jurisdiction, the jurisdiction must describe the existing use of the property, whether there are any plans to dispose of the property during the planning period, and how the jurisdiction will comply with the Surplus Lands Act .25 The City owns the following sites and included them in its site inventory: • Site 102; • Site 119; • Site 124; • Site 125; • Site 127; • Site 222; • Site 223; and • Site 224.26 23 City of Newport Beach, Draft 2021-2029 Housing Element, B -20-B-25 (March 2021). 24 Cal. Gov. Code Section 65583.2(b)(3). 25 Cal. Gov. Code Section 65583.2(b)(3). 26 City of Newport Beach, Draft 2021-2029 Housing Element, B -23-B-32 (March 2021). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541-5157 However, the City has not described the existing use for any of the nonvacant sites, has not described any plans to dispose of the City owned properties, and has not described any plans to comply with the Surplus Lands Act. Without this information, these sites should not be deemed adequate to accommodate the City's housing need. Moreover, for nonvacant sites, the jurisdiction shall specify the additional development potential for each site within the planning period and explain the methodology used to determine the development potential .27 The methodology shall consider multiple factors, including: (1) the extent to which existing uses may constitute an impediment to additional residential development; (2) the jurisdiction's past experience with converting existing uses to higher density residential development; (3) the current market demand for the existing use; (4) an analysis of any existing leases or other contracts that would perpetuate the existing use or prevent redevelopment of the site for additional residential development; (5) development trends; (6) market conditions; and (7) regulatory or other incentives or standards to encourage additional residential development on these sites. $ The City general states that it took into account development standards, net acreage and assumed density, and previous development trends when calculating the unit capacity for each site. 29 However, the City does not include any of the other requisite factors in its methodology. Without further consideration, it is difficult to assess whether the unit capacity reflects realistic development potential. To better predict how much of its RHNA can be accommodated on its identified sites, the City should incorporate more information into its analysis. Accessory Dwelling Units The number of ADUs identified is based on the number of ADUs developed in the prior housing element planning period, whether or not the units are permitted by right; the need for these units in the community; the resources or incentives available for their department; and any other relevant factors determined by HCD.30 To predict its ADU production, the City calculated the average of production over the last planning cycle and assumed the rate doubled each year during the 6th Cycle. As a result, the City predicts that 334 ADUs will be constructed from 2021 to 2029. However, the City only took into account prior production and did not consider any of the other factors. Without considering this information, the City's 334 ADU prediction is unreliable and should be recalculated. Nonvacant Sites for 50% or More of Housing Need If the jurisdiction is relying on nonvacant sites to accommodate 50 percent or more of its housing need for lower income households, the methodology used to determine additional 27 Cal. Gov. Code Section 65583.2(8)(1). 28 Cal. Gov. Code Section 65583.2(8)(1). 29 City of Newport Beach, Draft 2021-2029 Housing Element, B-17, B-36 (March 2021). 30 Cal. Gov. Code Section 65583.1(a). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541-5157 development potential shall demonstrate that the existing use identified does not constitute an impediment to additional residential development during the planning period .31 The City has accommodated almost all of its lower income housing need on nonvacant sites. However, the City has not addressed any of the existing uses on these sites and has not explained its methodology to determine whether existing uses are impediments to development. The City must include this information to continue utilizing a high percentage of nonvacant sites to accommodate its lower housing need. Programs The housing element must include programs that allow the jurisdiction to achieve its stated housing goals and objectives. 32 Programs must set forth a schedule of actions for the planning period, each with a timeline for implementation. 33 The programs may recognize that certain programs are ongoing, such that there will be beneficial impacts of the programs within the planning period .34 The programs may also recognize that the local government is undertaking or intends to undertake to implement the policies and achieve the goals and objectives of the housing element through: (1) the administration of land use and development controls; (2) the provision of regulatory concessions and incentives; (3) the utilization of appropriate federal and state financing and subsidy programs, when available; and (4) the utilization of moneys in a low - and moderate -income housing fund of an agency if the locality has established a redevelopment project area pursuant to Community Redevelopment Law. 35 To make adequate provision for the housing needs of all economic segments of the community, the program shall address housing issues such as inadequate site inventories, meeting lower income housing needs, removing constraints, maintaining affordable housing, promoting affirmatively furthering fair housing, preserving assisted housing developments, encouraging accessory dwelling units, and facilitating public participation. 36 While the City identified numerous policies to meet its housing need, many of these programs are only vaguely described. The City's programs tend to state that the City will meet the statutory requirements, but does not specifically explain how the City will do so. For example, "Policy Action 1H: Accessory Dwelling Unit Construction" describes how the City will "aggressively support and accommodate the construction of at least 336 ADUs by a variety of methods. "31 While the City explains they will engage in a public awareness campaign, provide a user-friendly website, and provide pre -approved plans, one of these methods is described as "evaluating and assessing the appropriateness of additional incentives to encourage ADU development. "38 Here, the City does not explain what other incentives it is considering or how it 31 Cal. Gov. Code Section 65583.2(8)(2). 32 California Department of Housing and Community Development, Building Blocks, Program Overview and Quantified Objectives,https://hed.ca.2ov/community-development/buildin2-blocks/pro ra�quirements/pro r overview.shtml (last visited Apr. 4, 2021). 33 Cal. Gov. Code Section 65583(c). 34 Cal. Gov. Code Section 65583(c). 35 Cal. Gov. Code Section 65583(c). 36 Cal. Gov. Code Section 65583(c). 37 City of Newport Beach, Draft 2021-2029 Housing Element, 4-7 (March 2021). 38 City of Newport Beach, Draft 2021-2029 Housing Element, 4-7 (March 2021). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541-5157 will determine the appropriateness of additional incentives. Without such specificity, the City avoids committing to pro -housing policies by merely making a plan to make a plan. By doing so, it is not clear whether the City is prepared to adequately provide for the housing needs of all economic segments of the community. To create effective programs, HCD recommends jurisdictions include the following: • Definite time frames for implementation; • Identification of agencies and officials responsible for implementation; • Description of the local government's specific role in program implementation; • Description of the specific action steps to implement the program; • Proposed measurable outcomes; • Demonstration of afirm commitment to implement the program; and • Identification of specific funding sources, where appropriate. 39 By following HCD Guidance and committing to more detailed plans, the City will be able to enter the planning period with a list of specific policies and actions in mind to provide more mindful housing opportunities with more realistic chances for development. Affirmatively Furthering Fair Housing As mentioned above, we are still in review of the Draft and intend to provide comments that are more detailed at a later date. As the changes to the distribution of affordable housing referenced in the Staff Report directly impact the City's obligation to affirmatively further fair housing, we look forward to discuss this aspect of the Draft when we have had an opportunity to review those proposed revisions. However, we do want to take the moment to mention that by limiting the Draft's analysis of fair housing issues to City -specific data and not analyzing these issues on a regional level, the City fails to truly recognize and address fair housing issues. While the City did not identify any areas within its borders with concentrations of racial or ethnic minorities, it failed to recognize that the City as a whole has failed to integrate other populations, which is evident from a regional perspective. The City must revise its fair housing analysis to more carefully analyze the issue on a regional level and the role that it has historically played in promoting segregation throughout Orange County. 39 California Department of Housing and Community Development, Building Blocks, Program Overview and Quantified Objectives, httns://hed.ca.2ov/community-development/buildin2-blocks/pro rag m-requirements/pro rg am- overview.shtml (last visited Apr. 4, 2021) (emphasis added). 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541-5157 Conclusion We are optimistic about the City's intentions to revise the Draft and the receptiveness to feedback thus far. We look forward to continuing to work with the City to ensure that the final 6th Cycle Housing Element complies with state law, meets the needs of all community members, and creates realistic opportunities for the development of affordable housing. Sincerely, THE PUBLIC LAW CENTER, BY: /s/ Richard Walker, Housing and Homelessness Prevention Unit, Senior Staff Attorney Alexis Mondares, Housing and Homelessness Prevention Unit, Legal Fellow 601 Civic Center Drive West • Santa Ana, CA 92701-4002 • (714) 541-1010 • Fax (714) 541-5157