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HomeMy WebLinkAbout1400 Bristol AHIP_8.11.2023 1400 BRISTOL STREET NORTH AFFORDABLE HOUSING IMPLEMENTATION PLAN AND DENSITY BONUS APPLICATION August 11, 2023 Prepared by 1 1400 BRISTOL STREET NORTH AFFORDABLE HOUSING IMPLEMENTATION PLAN AND DENSITY BONUS APPLICATION August 8, 2023 Project Description & Affordability Level The Picerne Group (“Picerne”) is proposing the 1400 Bristol Street North development (“Project”) on a 2.38 acre site located in the Newport Place Planned Community (“Property”). The site is generally bounded by Bristol Street North on the South and Spruce Street on the East, with low rise office buildings and surface parking on the North and West sides. The Newport Beach General Plan designates the project site as General Commercial Office (CO-G) and the zoning is Planned Community (“PC”) 11, (“PC-11”). A General Plan Amendment to redesignate the site as Mixed Use Horizontal 2 (MU-H2) and a PC Amendment to include the property in the PC-11 Residential Overlay are being proposed as part of the overall project application. The site is currently developed as 1970’s era two story office buildings with surface parking. The Project is planned to consist of 229 units including 153 base units and 76 density bonus units. The Newport Place Development Standards, as revised by Council Resolution No. 2023-13 on July 25, 2023 (“Development Standards”), provide that 15 percent of the base units within a residential development shall be affordable to Lower Income households. Lower Income Households, as defined in California Health and Safety Code Section 50079.5, are defined as households earning 80 percent or less of area median income, adjusted for family size, including both Very Low and Low income categories. The affordable housing requirement for this project, as required by the Development Standards, is 23 units (15% of 153 Base units). Eligibility for Density Bonus Picerne will be providing 23 units (15% of base units) affordable to Very Low Income households (“Very Low Income Units”). This will comply with the provisions of Government Code Section 65915 applicable to a 50% density bonus. Rents for the Very Low Income Units will be computed in accordance with Health and Safety Code Sec. 50053, as required by Government Code Section 65915(c)(1). 1400 Bristol Street North Affordable Housing Plan August 8, 2023 2 Density Bonus Computation and Term of Affordability The density bonus computation for the Project per Government Code Section 65915 is shown below: Table 1 Density Bonus Computation1 Picerne intends to operate the apartment project as a rental community. The 23 Very Low Income Units will remain rent restricted for a minimum of 55 years, per Government Code Section 65915(c)(1), more than the 30-year affordability term set forth in the Development Standards. Reduction in Parking As provided for in Government Code Sec. 65915(p) and Section 20.32.030 of the City’s Zoning Code the 1400 Bristol Street North project is eligible for a reduction in parking requirements. Government Code Section 65915(p) provides the following: (1) Upon the request of the developer, no city, county, or city and county shall require a vehicular parking ratio, inclusive of handicapped and guest parking, of a development meeting the criteria of subdivision (b), that exceeds the following ratios: a. Zero to one bedroom: 1.0 onsite parking space per unit b. Two to three bedrooms: 1.5 onsite parking spaces per unit. (2) If the total number of parking spaces required for a development is other than a whole number, the number shall be rounded up to the next whole number. For purposes of this subdivision, a development may provide “onsite parking” through tandem parking or uncovered parking, but not through street parking. 1 Per Section 423 of the City Charter, with approval of the proposed General Plan Amendment, up to an additional 100 dwelling units are permitted in the Airport Area by without a vote of the electorate. Units Based on Existing Nonresidential Uses 89 Additional Units Per Proposed General Plan Amendment1 64 Total Base Units 153 Density Bonus (50%)77 Total Units Permitted 230 Total Units Provided 229 1400 Bristol Street North Affordable Housing Plan August 8, 2023 3 Table 2 below is a summary of Government Code Sec. 65915 parking requirements vs. spaces to be provided: Table 2 Parking Requirements Picerne requests that parking requirements be calculated in accordance with Government Code Sec. 65915(p). As shown above, the Project will provide 422 onsite parking spaces for its residential units, which is 161 spaces more than the requirements of Sec. 65915 (p). Development Incentive Request Pursuant to Government Code Section 65915(d)(1) and Section 20.32 of the City’s Zoning Code, Picerne is entitled to three concessions or incentives due to providing at least fifteen percent (15%) of the units as affordable for Very Low Income households. Picerne requests the following development incentive: Section V.F.1 of the Development Standards provides that “Affordable units shall reflect the range of numbers of bedrooms provided in the residential development project as a whole.” Picerne requests that the 23 Very Low Income units be provided utilizing the unit mixes as shown below: Table 3 Unit Mix Unit Type Studio 40 1.0 40 1 Bedroom 126 1.0 126 2 Bedroom 63 1.5 95 Total Parking Stalls Required 261 Total Parking Stalls Provided 422 Parking Provided in Excess of Minimum Requirement 161 Stalls/Unit Per Gov. Code 65915 Total Stalls Per Gov. Code 65915 Number of Units 1400 Bristol Street North Affordable Housing Plan August 8, 2023 4 This incentive will result in cost reductions which will provide for the affordable rents to be set in accordance with Government Code Sec. 65915(c). Pursuant to Government Code Sec. 65915(d)(1) “The city, county, or city and county shall grant the concession or incentive requested by the applicant unless the city, county, or city and county makes a written finding, based upon substantial evidence, of any of the following:” (summarized from pertinent sections) (A) the concession or incentive does not result in identifiable and actual cost reductions , (B) would have an adverse impact on public health and safety or on a site listed as a historical site, or (C) is contrary to state or federal law. Government Code Sec. 65915(a)(2) further provides that a jurisdiction “shall not condition the submission, review, or approval of an application pursuant to this chapter on the preparation of an additional report or study that is not otherwise required by state law, including this section.” Picerne reserves the right to request up to an additional two incentives or concessions in the future. Development Standards Waiver Request Government Code Sec. 65915(e)(1) provides that a city or county may not apply any development standard (including height limits) that will have the effect of physically precluding the construction of a density bonus project at the density permitted under the density bonus statute. The only exceptions to this prohibition are if the development standards waiver would have an impact on health and safety as delineated in Government Code Sec. 65589.5(d), impact on property listed in the California Register of Historical Resources, or if the development standards waiver would be contrary to state or federal law. For the proposed project, the applicant is requesting the following development standard waivers: 1. General Plan Park Dedication Requirement: Pursuant to General Plan Policy LU 16-15.13, a public park equal to 8 percent of the gross land area of the total development, or a minimum one-half-acre, whichever is greater, shall be provided. This requirement would mandate a one-half-acre park on the 2.38 acre site. The General Plan allows a waiver of its park dedication requirement where it can be demonstrated that the development parcels are too small to feasibly accommodate the park or inappropriately located to serve the needs of local residents. The applicant therefore requests waiver of the General Plan Policy LU 16-15.13 public park dedication requirement. 2. PC-11 Development Standards Deviation (30-foot Street Setback): PC-11 development standards require street setbacks of 30 feet from the property line. A 30-foot setback would substantially reduce the Project’s development footprint, making it infeasible and impossible to support the proposed 229 dwelling units. Applicant therefore requests a waiver of the PC-11 30-foot setbacks. 3. PC-11 Development Standards Deviation (Building Height): PC-11: The Development Standards limit building heights to 55 feet. Given the constraints imposed by the street setbacks, the perimeter road, and the utilities required to serve the Property, imposition of 1400 Bristol Street North Affordable Housing Plan August 8, 2023 5 the 55 foot height limit would physically preclude the development of the proposed 229 dwelling units. The proposed building height is 85 feet. 4. Private Open Space: Newport Beach Municipal Code Section 20.18.030 (Table 2 -3) requires a minimum of 5% of the gross floor area of each unit to be set aside as private open space with a minimum dimension of 6 feet. The Project’s studio dwelling units and 9 of the two-bedroom units (including 4 units which provide 2 sf less than the private open space requirement) are unable to achieve these minimum private open space standards given their size and location. Therefore, Applicant requests a waiver from this private open space requirement since adherence to this development standard would physically preclude the Project as proposed. 5. Newport Beach Municipal Code Common Open Space: Newport Beach Municipal Code Section 20.18.030 (Table 2-3) requires a minimum of 75 square feet/unit (17,175 sf total) to be designated as common open space. The applicant requests a waiver to reduce the 75 square feet/unit (17,175 sf total) requirement to approximately 60 square feet/unit (13,800 sf total, or 3,375 sf less than the City requirement). This waiver is necessary in order to accommodate the project’s proposed density given the constraints imposed by the street setbacks, the perimeter road, and the utilities required to serve the project site. 6. General Plan Land Use Policy 6.15.7: General Plan Land Use Policy 6.15.7 (Overall Density and Housing Type) and Section IV.A.4 of the PC-11 zoning standards prescribe a density range of 30-50 dwelling units per acre ("du/ac"). The Project proposes 153 “base” units on a 2.38 acre parcel, which equates to 64 du/ac. The Project's 153 base units are comprised of 89 units from the conversion of the office building to residential and 64 additional units allocated to the Airport Area (Statistical Area L4) under the General Plan. The Project qualifies for a 50% density bonus (i.e., 77 units) in exchange for providing the necessary level of affordable housing. To the extent required, Applicant requests a waiver from the maximum base density standards under LU Policy 6.15.7 and Section IV.A.4 of the PC-11 in order to construct the Project at the density sought. Additional detail as to these waiver requests has been submitted separately as part of the development application. Waiver of these requirements is necessary to accommodate the additional units permitted by the density bonus. Government Code Section 65915(e)(1) requires that the waiver requests be approved. Income Limits and Examples of Eligible Tenants for Affordable Homes Lower Income Households are defined as households whose gross income does not exceed 80% of area median income, adjusted for household size. Lower Income Households include Very Low Income Households whose gross income does not exceed 50% of area median income, adjusted for household size. Table 4 on the following page shows the maximum income limits for Very Low Income Households as determined by the U.S. Department of Housing and Urban Development and the California Department of Housing and Community Development (“HCD”) with household sizes appropriate for the 1400 Bristol Street North project: 1400 Bristol Street North Affordable Housing Plan August 8, 2023 6 Table 4 Maximum Income Limits Higher income limits apply to larger families; those families however are not considered to be a target market for the Project, where the unit mix consists of studios, one-bedroom, and two- bedroom apartment homes. These income limits are updated annually. The 23 affordable homes that Picerne will provide will be rented to eligible Very Low Income Households. As shown in Table 4, Very Low Income Households includes incomes ranging from $50,250 per year for a one-person household to $77,500 per year for a five-person household. As such this could include City employees, school district employees, health care workers, restaurant and other retail workers, and other occupations which provide needed services to our community. While household size, overtime pay, summer jobs, or second jobs may affect eligibility, the income limits above are reflective of pay to many public or health care sector workers, as shown in Table 5 on the following page: Household Size Very Low Income Households Maximum Annual Income - 2023/2024 1 Person $50,250 2 Person 57,400 3 Person 64,600 4 Person 71,750 5 Person 77,500 1400 Bristol Street North Affordable Housing Plan August 8, 2023 7 Table 5 Examples of Qualifying Salaries The pay ranges shown above are as of 2022 and are subject to update. Retired persons or couples or young business professionals starting their careers may also qualify to rent the affordable homes at 1400 Bristol Street North. In order to provide opportunities for workers to live in one of the affordable homes, the City could provide guidelines providing for acceptance of applications on a priority basis from classes of individuals who qualify under the income limits in effect. The guidelines could provide for priority treatment for City residents, City employees, employees of the local school district, and employees of major health care institutions or other categories identified by the City for priority treatment. Rental Rate Limits for Affordable Homes The 23 Very Low Income Units shall be rented at an affordable rent calculated in accordance with the provisions of Section 50053 of the Health and Safety Code. Section 50053 of the Health and Safety Code limits affordable rent to 30% of total income for a Very Low Income household, as calculated in Table 6 on the following page. That section also requires that the rent for a studio unit assumes a one-person household for rent calculation purposes, a one-bedroom unit assumes a two-person household, and a two-bedroom unit assumes a three-person household. The rents calculated are then adjusted by a utility allowance as determined annually by the County of Orange Housing & Community Services Department. As of October 1, 2022, the reduction for the utility allowance is $149.00 per month for a studio unit, $163.00 per month for a one-bedroom unit, and $215.00 per month for a two-bedroom unit. The utility allowance utilized assumes gas cooking, gas space heating, gas water heating, as well as electricity, air conditioning, and water, sewer, and trash fees which are assumed to be paid by the tenant. The maximum rent levels for 2023/24 by income level are shown in Table 6 on the next page: Position Pay Range Information Source Comments Human Resources Specialist I $64,356-$90,444 City May qualify for Very Low units depending on household size. Park Patrol Officer $45,420-$63,924 City Will qualify for Very Low Income units depending on household size. Licensed Vocational Nurse (LVN)$60,000-$87,000 Glassdoor May qualify for Very Low units depending on household size. Newport-Mesa Unified School District ("NMUSD") Teacher $64.354-$98,740 NMUSD Website Credentialed teacher with no advanced education and up to 5 years experience may qualify for Very Low Income units depending on household size. NMUSD Library Technician.$46,020-$55,932 NMUSD Website At entry level will qualify for Very Low Income units. NMUSD MaintenanceWorker $57,468-$85,116 NMUSD Website May qualify for Very Low units depending on household size. 1400 Bristol Street North Affordable Housing Plan August 8, 2023 8 Table 6 2 Maximum Rents by Bedroom Count Picerne will enter into an affordable housing agreement, in recordable form, with the City prior to obtaining the first building permit for any residential unit. That agreement will ensure that the maximum rents for the affordable apartment homes will be calculated using the methodologies as utilized in Table 6. The rental rates shown will be updated prior to the commencement of rental activities and on an ongoing basis to reflect then current income limits, utility allowances, and any changes in applicable regulations and statutes. Unit Mix, Design, and Location of Affordable Homes While the exact location of each of the affordable homes within the 1400 Bristol Street North site has not yet been determined, the affordable homes will be spread throughout the development to avoid concentration of affordable homes in any area. The affordable homes shall be comparable in the quality of construction and exterior design to the market rate homes. As provided for in the Development Standards, all affordable homes will have access to the facilities and amenities offered by the development. Requested City of Newport Beach Assistance Financial Assistance Picerne is not requesting any direct financial assistance from the City of Newport Beach for this project. 2 Rents for Very Low Income units calculated in accordance with Section 50053 of the Health and Safety Code.