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HomeMy WebLinkAbout5.0_Housing Element Update_PA2012-104CITY OF NEWPORT BEACH PLANNING COMMISSION STAFF REPORT April 18, 2013 Planning Commission Hearing Agenda Item No. 5 SUBJECT: Housing Element Update - (PA2012 -104) 100 Civic Center Dr., Newport Beach General Plan Amendment No. GP2012 -8 -004 APPLICANT: City of Newport Beach Jaime Murillo, Associate Planner, PLANNER: 949 - 644 -3209 Imurillo(a)newportbeachca.gov Melinda Whelan, Assistant Planner 949 - 644- 3221,mwhelan @newportbeachca.gov PROJECT SUMMARY An amendment of the Newport Beach General Plan updating the Housing Element for the years 2014 through 2021.The Housing Element is one of the mandatory elements of the General Plan, and State law requires it to be updated periodically. The Newport Beach Housing Element details the City's strategy for enhancing and preserving the community's character and indentifies constraints to the development of housing. It also identifies strategies for expanding housing opportunities and services for all household types and income groups. It provides the primary policy guidance for local decision - making related to housing. The draft 2014 -2021 Housing Element is an update and revision of the adopted 2008 -2014 Housing Element and it contains updated community data, policies, and programs. RECOMMENDATION 1) Conduct a public hearing; and 2) Discuss and provide comment related to the draft of the 2014 -2021 Housing Element Update for City Council consideration; and 3) Recommend the City Council authorize submission of the draft of the 2014- 2021 Housing Element Update to the Department of Housing and Community Development. 1 2014 -2021 Housing Element Update April 18, 2013 Page 2 INTRODUCTION The State Department of Housing and Community Development (HCD) is required to review the Housing Element and determine whether or not it complies with State Housing Element law. Upon the City Council's recommendation, staff will submit the draft 2014 -2021 Housing Element Update to HCD (Attachment No. PC 1) for review. Once the draft is reviewed by HCD, staff will address their comments and bring back a final draft to the Planning Commission and City Council for final review and adoption. The current project schedule is as follows: Housing Element Update Schedule- 2013 Action Date Community Workshop #1 (November 14, 2012) Completed Community Workshop #2 March 27, 2013 Completed Planning Commission and City Council Review of Initial Draft April /Ma Submit Draft to HCD May HCD comments Due 60 days post submittal Planning Commission Review and City Council Adoption August/September Submit Adopted Housing Element to HCD October Background The City completed a comprehensive update of its General Plan in 2006. Through the General Plan Update process, several key areas in the City were identified as ideal locations for future housing opportunities. Key sites for future development include the Airport Area, Newport Center, Banning Ranch, Newport Mesa and the Balboa Peninsula area. The comprehensive Zoning Code Update, completed in October, 2010, implements many of the land use changes included in the 2006 General Plan update. The General Plan Update included a new Housing Element that became the 2008 -2014 Housing Element. After a total of four rounds of review with HCD, the 2008 -2014 Housing Element was found fully compliant with the statuary requirements of State law in August of 2011 and subsequently adopted by the City in November of 2011. Document Format The Housing Element is divided into two (2) major sections and includes all of the necessary information and analysis as required by State law. The draft previously provided and referenced highlights only the revisions as underlined. A complete document with strike -out and revisions is also found at http:// www. newportbeachca .gov /housingelementupdate. The following is an outline of the Housing Element Sections: 2 2014 -2021 Housing Element Update April 18, 2013 Page 3 1. Community Housing Market Analyses • Housing Stock Characteristics — Provides data on residential growth and dwelling unit type, including statistics on residential densities, tenure, vacancies, and type of housing within the City. This section also provides information on assisted housing stock at risk of conversion to market rate units (page 5 -8). • Analysis and Projection of Population and Employment — Provides statistics and projections on populations and employment as they relate to housing projections (pages 5 -22 and 5 -33). • Household Characteristics — Provides information on ethnicity, household income, and the cost of housing including rentals (page 5 -26). • Analysis of Special Population Groups — Provides information on the special needs population groups within the City, including students, elderly, disabled, farm workers, female head of household, and the homeless (page 5 -35). • Analysis of Housing Need — In accordance with State Housing Element law, the Southern California Association of Governments (SCAG) has prepared a Regional Housing Needs Assessment (RHNA) to identify the regional housing needs for each jurisdiction within the SCAG region. The RHNA is summarized below in this report and is found on page 5 -44 in the Draft. • Inventory of Land Suitable for Residential Development - An inventory and description of land determined suitable for residential development that can realistically be developed within the planning period (2014 -2021) and sufficient to meet the City's total RHNA. A detailed, parcel - specific analysis, inventory, and maps of available and suitable sites is included as Appendix H3. • Analysis of Opportunities for Energy Conservation — Provides information on how the City is maintaining current energy conserving design innovations and state standards (page 5 -78). • Nongovernmental Constraints to Housing Production — This discussion describes nongovernmental constraints to housing production including community attitudes, financial, construction and land costs, and environmental considerations (page 5 -79). • Governmental Constraints to Housing Production — Outlines City and other governmental constraints on housing, including land use controls (zoning), building codes and their enforcement, site improvements, fees, and local processing procedures (page 5 -81). 3 2014 -2021 Housing Element Update April 18, 2013 Page 4 2. Housing Goals and Policies, Quantified Objectives, and Programs • General Review of 2006 -2014 Housing Element and Housing Activities —A review of the appropriateness and accomplishments of goals, policies, and programs of the 2006 -2014 Housing Element in contributing to the attainment of the previous local and state housing goals (page 5 -98). • Year 2014 -2021 Housing Plan - Quantifies the City's goals for the number of units that can be constructed, rehabilitated, and conserved during the 2014 -2021 planning period (page 5 -124). • Newport Beach Housing Element: Goals, Policies, and Programs - Proposed goals and policies that address the City's anticipated housing needs during the tenure of this Housing Element (2008 -2014) and are implemented by a series of Housing Programs. These Programs prescribe specific actions the City of Newport Beach will take during the tenure of this Housing Element. The Housing Programs are discussed further in the Housing Programs section of this report (page 5 -127). Attachment No. PC 2 is the Housing Element Worksheet created by HCD that summarizes the specific information that is required to be addressed in the Housing Element and where the information is provided within the Draft Housing Element. City of Newport Beach Regional Housing Needs Assessment State law requires that local jurisdictions accommodate a share of the projected housing need to accommodate the growth of the region. This share is identified by the Regional Housing Needs Assessment (RHNA) and is established by the Southern California Association of Governments (SCAG). State law mandates that jurisdictions provide zoning of sufficient land at adequate densities to accommodate a variety of housing opportunities to meet the RHNA. Meeting the RHNA provides a critical basis for determining the adequacy of a Housing Element. Actual construction of the housing units is not mandated by law; however, local jurisdictions must implement identified programs and policies in support of housing production for all economic segments of the community. The RHNA allocation for the current (2008 -2104) Housing Element resulted in a total housing need of 1,914 dwellings, including 770 dwelling units affordable to lower - income households. The City was able to accommodate this need. For the upcoming 2014 -2021 planning period, SCAG based the City's RHNA allocation accounting for unique market conditions attributable to prolonged recessionary conditions, high unemployment, and unprecedented foreclosures. The following table illustrates the City's RHNA by income categories for the 2014 -2021 planning period: 4 2014 -2021 Housing Element Update April 18, 2013 Page 5 TOTAL HOUSING NEED BY INCOME, 2014 -2021 Very Low Low Moderate Above Moderate Total 1 unit 1 unit 1 unit 2 units 5 units 20% 20% 20% 40% 100% Sites Analysis and Inventory In accordance with Government Code Section 65583(a)(3) and 65583.2, the Housing Element must provide an inventory and description of land determined suitable for residential development that can realistically be developed within the planning period and sufficient to meet the City's total RHNA identified in the table above. A detailed, parcel - specific analysis and inventory, including maps, of available and suitable sites (Sites Analysis and Inventory) was previously prepared for the current Housing Element and current RHNA requirements. Although the inventory illustrates housing opportunities that now significantly exceed the new RHNA allocation of five units, it continues to remain relevant to illustrate the significant opportunities that continue to exist in the City that were created as part of the General Plan Update in 2006. The analysis and inventory is included in the Draft found on page 5 -45 and Appendix H3 (Attachment No. PC 1). The Sites Analysis and Inventory is organized by the key opportunity areas within City (i.e., Banning Ranch, Corona del Mar, West Newport Mesa, Mariner's Mile, Balboa Peninsula, Dover Dr./Westcliff Dr., Newport Center, and the Airport Area). The Sites Analysis and Inventory demonstrates that sites are currently available and reasonably unconstrained so as to provide realistic housing opportunities within the planning period. A methodology, describing the site selection process and calculations of achievable and realistic densities, is included within the Sites Analysis and Inventory. To demonstrate the realistic development viability of the sites, the analysis also discusses: (1) whether appropriate zoning is in place; (2) the applicable development limits /densities and their impact on projected development capacity and affordability; (3) existing constraints including any known environmental issues; and (4) the availability of existing and planned public service capacity levels. The Sites Analysis and Inventory also serves as a useful tool to promote housing opportunity sites to potential residential housing developers pursuant to Housing Program 3.2.3. A user - friendly version is maintained on the City's webpage. Local Housing Needs Although RHNA for this new planning period is only five units, the data in the Housing Element illustrates that there remains an existing need for housing affordable to lower- 0 2014 -2021 Housing Element Update April 18, 2013 Page 6 income households and special needs populations. Highlights from the document include: • Approximately 27 percent of households in the City are lower- income (see page 5 -31 for a detailed discussion on Housing Affordability). With median single - family homes and condominium prices in Newport Beach ranging from $760K to $2.4 million in 2012, home ownership is out of reach for moderate - income and lower- income households. • With average rental prices in 2012 ranging from $1,941 for a one - bedroom unit to $2,857 for a three - bedroom unit, lower- income households are unable to afford most market -rate rental units in the City without experiencing cost burdens exceeding 30 percent of annual income. These households are limited to the small number of rent restricted affordable housing units or are subject to a higher cost burden. • Currently, 30 percent of home owners and 40 percent of renters experience a housing cost burden (paying more than 30 percent of annual income on housing). (see Table H22) • Elderly renter households had significantly higher proportions of lower- income households than any other household type. Approximately 55 percent of all elderly renter households and 30 percent of elderly owner households earned lower- income levels (see Table H22). The City's elderly population is the fastest growing segment of the population and the number is expected to continue to increase. According to the 2010 Census, approximately 19 percent of City's total population were 65 years of age and older, significantly higher than the County's percentage of 11.6 percent. • The City currently maintains 11 separate affordable housing covenants on various rental and owner - occupied housing developments, for a total of 401 units citywide. Seven of these covenants are set to expire between 2016 and 2023, resulting in the potential loss of 153 affordable rental units in the City (see page 5 -18 for a detailed discussion on At -Risk Units). Housing Programs The goals, polices and programs are the most important component of the Housing Element. The goals provide the end result sought by the City; the polices provide language to assist in decision making and describe general courses of action to be taken to achieve the goal; the programs are specific activities that will be maintained or undertaken and are necessary to implement a given policy to make the goal a future reality. 0 2014 -2021 Housing Element Update April 18, 2013 Page 7 Table H40 (Attachment No. PC 2 page 5 -103) provides an overview of the accomplishments associated with each program and whether the program remains appropriate to retain. Since the Housing Element received exhaustive review by the public and HCD and was most recently adopted in 2011, only a few changes are identified as necessary. The goals adopted in the Housing Element have not been revised; however, in order to more effectively achieve those long -range goals, the previously adopted housing programs have been revised and only a few new housing programs have been incorporated. Programs that have been completed have been eliminated or revised to illustrate that the City will continue to implement the program. Several programs remain appropriate and will continue as programs with objectives to yield the following results: implementation of the Inclusionary Housing Ordinance; maintaining the in -lieu housing fee program that will be used for the preservation rehabilitation and construction of affordable units; promotion of the density bonus incentive provisions of the Zoning Code; financial assistance to the homeless and special needs service providers; financial assistance to a fair housing service provider; and development incentives for affordable housing projects. New or revised programs include the identification of the need for a potential housing rehabilitation program while investigating the use of grants or loans to fund such a potential program if a significant need is identified (Housing Program 1.1.2); promoting the Residential Building Records Program to reduce and prevent residential violations (Housing Program 1.1.4); promoting and facilitating the development of senior accessory dwelling Units (Housing Program 5.1.3); and promoting senior citizen independence through supporting housing services related to in -home care, meal programs, counseling, and maintenance of the Oasis Senior Center and its programs (Housing Program 5.1.7). A complete list of the all of the Housing Goals, Policies, and Programs are on pages 5 -127 through 5 -144 of the Draft. Public Outreach In preparation of the 2014 -2021 Draft Housing Element, staff held two public workshops. The first workshop was held on November 14, 2012, to solicit input from members of the community and other housing stakeholders regarding the City's needs, constraints, and goals related to housing prior to preparing the initial draft revisions. The second workshop was held on March 27, 2013, to formally present the Draft Housing Element to the public. Staff shared changes in housing data and the effectiveness of housing programs from the current Housing Element. Staff also discussed the appropriateness of maintaining current programs with meeting participants and explained proposed program revisions. Valuable input was received from those who attended the workshops. Throughout the Housing Element update process, the City has posted, and will continue to post, Draft Housing Element documents and presentation materials on the website to 'A 2014 -2021 Housing Element Update April 18, 2013 Page 8 facilitate the review by residents and interested parties. Copies of the Draft Housing Element were also made available for review at City Hall. Environmental Review All significant environmental concerns for the proposed project have been addressed in a previously certified Negative Declaration (ND) SCH No. 2011091088 for the 2008 -2014 Housing Element Update, and that the City of Newport Beach intends to use said document for the above noted project. The ND uses and incorporates by reference the environmental analysis from the City of Newport Beach Environmental Impact Report General Plan 2006 Update SCH No. 2006011119, certified on July 25, 2006. The ND indicates that the Housing Element Update will not result in a significant effect on the environment and further that there are no additional alternatives or mitigation measures that should be considered in conjunction with said project. Copies of the previously prepared environmental document are available for public review and inspection at the Planning Division or at the City of Newport Beach website under Archived Environmental Documents at www. newi)ortbeachca .gov /ceoadocuments. Public Notice Notice of this hearing was published in the Daily Pilot, posted at City Hall a minimum of 10 days in advance of this hearing consistent with the Municipal Code, and emailed to all parties that have signed up to receive notification of the Housing Element Update. Finally, the item appeared upon the agenda for this meeting, which was posted at City Hall and on the city website. Prepared by: Submitted by: aim���Planner ' Br6n a Wisnes i, ICP, Deputy Director Prepared by: Z-11/- X Melinda Whelan Assistant Planner 2 2014 -2021 Housing Element Update April 18, 2013 Page 9 ATTACHMENTS PC 1 Previously distributed 2014 -2021 Draft Housing Element with revisions highlighted found at http:// www. newi)ortbeachca .gov /housingelementupdate PC 2 HCD Housing Element Worksheet I 10 Attachment No. PC 1 Previously distributed 2014 -2021 Draft Housing Element with revisions highlighted found at http:// www. newportbeachca .gov /housingelementupdate 21 12 Attachment No. PC 2 HCD Housing Element Worksheet 1-71 14 Yp OOpfMUNIJy f 3 Housing Element Update Guidance • O'�GfFORRmP Streamlined Update Template 2,5 Housing Element Update Guidance Attachment 3 — Streamlined Update Template Housing Needs Assessment (Section 65583(a)(1 and 2)) (See Building Blocks at http: / /www.hcd.ca.gov /hpd /housing element2 /HN home.php Revised Page(s) Indicate N/A If No Changes Were Necessary Update quantification of population, employment, and housing stock needs including: • Population 5- 22,5 -23 Employment 5 -33 • Households 5 -26 • Overpayment (including lower- income) 5 -28 • Overcrowding 5 -33 Extremely Low Income Households 5 -26 • Housing conditions 5 -14 Sources of information: • 2010 Census at htti): / /factfinder2. census. gov / faces / nav /isf /pages /searchresults.xhtml ?refresh =t • American Community Survey at http: / /factfinder2.census.gov /faces/ nav /isf /pages /searchresults.xhtml ?refresh =t • Department of Finance at hftp: / /www.dof.ca.gov /research /demographic/ • Applicable Federal Consolidated Plan • Available local and regional data (e.g., local census of homeless persons or shelter beds) Special Note: If a jurisdiction has utilized a data packet pre- approved by HCD such as in SANDAG, SCAG and SACOG, mark N/A above where appropriate and indicate the data packet has been utilized. The Department will not review the portions noted in the applicable correspondence to the Council of Governments. Contact HCD for more details or questions. Update analysis and conclusions as necessary due to changes in population and 5 -14 through households characteristics or other dynamics for population, employment, households, overpayment, overcrowding, extremely low income households, and housing conditions 5 -35 CA Dept of Housing and Community Development Z0 1 Housing Element Update Guidance Attachment 3 — Streamlined Update Template Update policies and programs as necessary to reflect changes in the analysis and HP 1.1.2 on conclusions and other pertinent assessments of need such as the federal Consolidated 5 -128, Plan HP 1.1.4 on 5 -129, HP 5.1.3 on 5 -142, and HP 5.1.7 on 5 -143 Persons with Special Needs (Section 65583(a)(7)) (See Building Blocks at http: / /www.hcd.ca.gov /hpd /housing element2 /HN SHN home.php) Revised Page(s) Indicate N/A If No Changes Were Necessary Update quantification of special housing needs groups, including: • Persons with disabilities, including developmental 5 -36 • Elderly 5 -37 • Large households 5 -38 • Farmworkers (seasonal and permanent) 5 -44 • Female headed households 5 -37 • Homeless Individuals and Families 5 -39 Sources of information: • 2010 Census at http: / /factfiinder2.census.gov/ faces /nav /isf /pages /searchresults.xhtml ?refresh =t • American Community Survey at http: / /factfinder2. census. gov / faces / nav /isf /pages /searchresults.xhtml ?refresh =t • Department of Finance at www.dof.ca.gov /research /demographic • CA Department of Developmental Services at www.dds.ca.gov • Agricultural Census at http: / /www.agcensus.usda.gov /Publications /index.php • Applicable Federal Consolidated Plan and local and regional data (e.g., local census of homeless persons or shelter beds) Special Note: If a jurisdiction has utilized a data packet pre- approved by HCD such as in SANDAG, SCAG and SACOG, mark N/A above where appropriate and indicate the data packet has been utilized. The Department will not review the portions noted in the applicable correspondence to the Council of Governments. Contact HCD for more details or questions. CA Dept of Housing and Community Development 1-7 2 Update analyses and conclusions, as necessary, due to changes in housing needs or other dynamics, for persons with special needs Housing Element Update Guidance Attachment 3 — Streamlined Update Template 5 -35 through 5 -44 Quantify and analyze persons with developmental disabilities as required by Government Code Section 65583 (e) (See the Department's memo at 5 -36 http://www.hcd.ca.gov/hpd/NoticeCoverLttrSB812.pd ) Revise programs as appropriate including pursuant to Section 65583(e) (Developmental Disabilities) to address need based on revised data /analyses At -risk Units (Section 65583(a)(9) (See Building Blocks at http: / /www.hcd.ca.gov /hpd /housing element2 /EHN atrisk.php) Update the inventory of at -risk units , removing units no longer at risk and adding any additional units that are at -risk of conversion within 10 years from the start of the housing Revised Page(s) 5 -18 N/A Indicate N/A If No Changes Were Necessary Special Note: If a jurisdiction has utilized SACOG's Housing Element Data to update the inventory, mark N/A where appropriate above and indicate the data has been used. The Department will not review the updated inventory. Contact HCD for more details. Analyze risk of updated inventory of at -risk units 5 -18 Evaluate the loss of any at -risk units 5 -18 Revise policies and programs as appropriate based on update analysis and conclusions 5 -128, 5 -137 through 5 -139 CA Dept of Housing and Community Development 12 3 Housing Element Update Guidance Attachment 3 — Streamlined Update Template Potential Governmental and Non - governmental Constraints (Section 65583(a)(5 & 6)) (See Building Blocks at httQ: / /www.hcd.ca.gov /hpd /housing element2 /CON home.ph ) Revised Page(s) Indicate N/A If No Changes Were Necessary Land Use Controls 5 -89, 5 -113, • Update to show changes to land use controls including changes in residential zoning and /or development standards (e.g., heights and lot coverage, parking 5 -114 requirements, minimum unit sizes, floor area ratios, density limits • Update to describe changes to growth controls or similar measures such as population or unit caps or voter required general plan re- designations or voter N/A required approval of changes in land use laws or regulations Building Codes and Enforcement HP 1.1.2 on • Update to describe changes to local building code, amendments, and 5 -128, enforcement programs HP 1.1.4 on 5 -129 Site Improvements HP 1.1.4 on • Describe changes to site improvement requirements 5 -129 Permitting Processes and Procedures • Update to show revisions to processing and permit procedures for residential 5-91,5-94 development (e.g., design review process, change in level of review (administrative vs. legislative review: ministerial vs. discretionary review)) Fees and Exactions • Update changes to fee schedules 5 -93 • Update changes to other exactions CA Dept of Housing and Community Development 19 4 Housing Element Update Guidance Attachment 3 — Streamlined Update Template Housing for Persons with Disabilities Update to describe any new restrictions or revisions regarding approval of housing for 5 -95, 5 -96 persons with disabilities such as concentration requirements, limits on the number of unrelated persons, or provisions for making reasonable accommodations. Update land costs, financing availability and construction costs as necessary and 5 -79 through 5 -81 consider other potential non - governmental constraints, such as resident or business opposition to development, as appropriate For each category above, update analyses, as needed, to reflect changes in conditions or circumstances such as market conditions, land costs, financing availability, and 5 -79 through 5 -81 construction costs that effect the conclusions of the analyses on potential governmental constraints in the prior element ms to Mitigate Identified Constraints 5 -113 and 5 -114; Describe programs to mitigate identified constraints in the prior housing element 5 -128, 5 -129 Revise policies and programs as appropriate to address identified constraints 5 -135 through 5 -137 CA Dept of Housing and Community Development 20 1 Housing Element Update Guidance Attachment 3 — Streamlined Update Template Sites Inventory and Analysis (Section 65583(a)(3) and 65583.2)) See Building Blocks at http://www.hcd.ca.gov/hpd/housing element2 /SIA home.phip Revised Page(s) Indicate N/A If No Changes Were Necessary Identify any changes to the sites inventory 5 -159, 5 -162, 5- 164, 5 -165, 5 -168 Update or include analysis or description as necessary to demonstrate zoning 5- 52,5 -164 appropriate to accommodate housing for lower income households pursuant to Section through 5 -168 65583.2(c)(3) and d — Update or include analysis or description as necessary to demonstrate the potential for 5 -162 under redevelopment pursuant to Section 65583.2(b)(7) Area 3, 5 -164 through 5 -165 under Are 8 and Area 9 Analyze any new known environmental constraints or changed conditions and N/A circumstances such as market conditions that affect the suitability of identified sites existing sufficient 5 -168 Update methodologies as necessary to estimate the residential capacity on identified 5 -159 through sites 5 -168 Revise analysis of existing and /or planned infrastructure capacity (e.g., water and N/A sewer) to accommodate the regional housing need, if needed (e.g., capacity or existing sufficient availability has changed) 5 -168 through 5- 170 Include a summary table of sites included in the inventory by income category in N/A comparison to the RHNA and, if applicable, any carryover obligation (Section 65584.09) CA Dept of Housing and Community Development 21 6 Housing Element Update Guidance Attachment 3 — Streamlined Update Template Add programs to rezone and any other programs needed to address a shortfall of sites N/A to accommodate the regional housing need, if applicable, and any programs included pursuant to Section 65583.2(h) and (i) or carryover obligation pursuant to Section 65584.09 Update analysis as necessary to demonstrate sufficient capacity to accommodate the N/A need for emergency shelters existing analysis sufficient on 5 -87 and 5 -88 Other Requirements (See Building Blocks at http: / /www.hcd.ca.gov /hpd /housing element2/OR home.php) and Update description to ensure consistency with other elements of the general plan if policies or programs have been adopted in other elements of the general plan affecting internal consistency Update to describe, as necessary, housing for lower or moderate income households that has been constructed, demolished or converted in the Coastal Zone Revised Page(s) 5 -103, 5 -107, 5 -124, 5 -128, 5 -132 Indicate N/A If No Changes Were Necessary N/A CA Dept of Housing and Community Development 22 7 Marlene Correspondence Item No. 5a Housing Element Update From: Brandt, Kim Sent: Thursday, April 18, 2013 10:42 AM To: Burns, Marlene; Murillo, Jaime; Whelan, Melinda; Campbell, James Subject: FW: City of Newport Beach draft Housing Element Attachments: 2013 -04 -17 Newport Beach - Inclusionary Zoning.pdf Please distribute to the PC. I<. VA From: Mike Balsamo rmai Ito: MBalsamoCalbiaoc.coml Sent: Thursday, April 18, 2013 10:35 AM To: Brandt, Kim Cc: Victor Cao Subject: FW: City of Newport Beach draft Housing Element I:11^im Please find our letter attached. We will see you this evening. Thank you. Mike Balsamo Chief Executive Officer BIASC Orange County Chapter 17744 Sky Park Circle, Ste 170 Irvine, CA 92614 949 -553 -9500 ext. 112 949 - 769 -8943 fax www.biaoc.com April 18, 2013 Chairman Michael Toerge Planning Commission City of Newport Beach 100 Civic Center Irvine, CA 92606 -5207 Re: Request for Removal of Inclusionary Housing Mandate and In -Lieu Fee as part of the 2013 Housing Element Update Dear Chairman Toerge, On behalf of our membership, we would like to thank city staff for their invitation to the 2013 Housing Element meetings. After careful review of the proposed housing element update, we request the removal of the inclusionary housing mandate and propose a voluntary program as an alternative. The Building Industry Association of Southern California, Orange County Chapter (BIA /OC) is a non -profit trade association of nearly 1,000 companies employing over 100,000 people affiliated with the home building industry. The Orange County Chapter represents the largest member base within BIA Southern California. Our mission is to champion housing as the foundation of vibrant and sustainable communities. We recommend the elimination of the inclusionary housing mandate and in -lieu fee based on the following seven points: 1. The City of Newport Beach is Within its Rights to the Eliminate Inclusionary Zoning Mandate — Multiple letters from the Department of Housing and Urban Development indicate that inclusionary housing mandates are not a requirement for the approval of a jurisdictions housing element. State law does require jurisdictions to provide incentives for voluntary affordable housing development. Many inclusionary zoning advocates mistakenly cite Regional Housing Needs Allocation (RHNA) reports as a requirement for the production of inclusionary housing. RHNA is a tool for cities to plan effectively for population growth. The City has a reasonable allocation considering that the current goal is just 5 units necessary for future population growth. 2. Inclusionary Zoning Fee was Adopted During Peak Market and Increased During the Recession — The inclusionary zoning fee was adopted during the peak of the housing market in 2006. In -lieu funds are not a dependable source of revenue when affordable housing is most needed during economic downturns such as the one we are currently recovering from. Under this policy, the production and /or the fee for inclusionary housing is only feasible during active housing production. In time, an inclusionary housing mandate becomes an unfunded mandate and liability should the City continue the production of subsidized housing. Likewise, the Orange County Chapter Building Industry Avocin ion of Southern California 17744 Sky Park Circle Suite 170 Irvine, California 92614 949.553.9500 fax 949.553.9507 ..biaoc.com PRESIDENT DAVE BULLOCH STANDARD PACIFIC HOMES VICE PRESIDENT DONNA KELLY LENNAR TREASURER JOAN MARCUS- COLVIN THE NEW HOME COMPANY SECRETARY BRIAN GEIS BROOKFIELD HOMES IMMEDIATE PAST PRESIDENT MICHAEL McCANN ALLIANCE RESIDENTIAL TRADE CONTRACTOR COUNCIL V.P. TOM RHODES TWR ENTERPRISES ASSOCIATE VICE PRESIDENT MARK HIMMELSTEIN NEWMEYER & DILLION, LLP MEMBER -AT -LARGE MIKE WINTER SARES -REGIS GROUP MEMBER -AT -LARGE JIM YATES RANCHO MISSION VIEJO CHIEF EXECUTIVE OFFICER MICHAEL BALSAMO elimination of redevelopment has only exacerbated the issue of funding affordable housing. Considering that the economic conditions have changed, we believe it is necessary for inclusionary housing policies to change as well. 3. Inclusionary Housing Mandates are a Barrier to the Actual Production of Affordable Housing— While there are signs that the housing market is recovering, the recovery is in its infancy and remains fragile. The most recent report on the housing industry from Wells Fargo and the National Association of Homebuilders indicates that homebuilder confidence is poor'. Inclusionary housing requirements are the cause of a 7% to 10% increase in the cost of market -rate housing. In Newport Beach, the fee is $20,513 per unit. The in -lieu fee has increased by 10.8% since it was adopted in 2006, despite the fact that most homebuilders and new homebuyers continue to face considerable financial challenges. 4. Inclusionary Zoning Policies Lack Nexus - As a matter of public policy, mandatory inclusionary requirements do not meet the same standards that other development impact fees are subject to pursuant to the Mitigation Fee Act2. The City's mandatory inclusionary zoning requirements mandate that for every 100 market -rate homes, 15 homes will be sold below market -rates and, in some cases, at a loss. As an example, it is readily apparent how residents may proportionally impact traffic or park service levels. On the contrary, there is no direct impact relationship to show that the production of new residential housing causes a reduction in affordability. In fact, mandatory policies artificially increase the cost of market -rate housing. Currently, homebuilders and indirectly new residents are singled -out to fund affordable housing projects. Should the City have a legitimate interest in subsiding affordable housing production, we would expect an equitable and broad government response to that goal. 5. Housing Production is the Key to Affordable Housing — California is ranked #3 in the nation for the highest housing prices. This is largely due to 1) lack of adequate housing stock, 2) a jobs to housing imbalance in coastal areas, and 3) lack of available land coupled with excessive regulation on the housing industry. Policies that support the production of housing allow for fundamental economic principles of supply and demand to occur. 6. The City of Newport Beach Maintains Local Control — Elimination of the mandatory inclusionary requirement in Newport Beach does not prevent the City from negotiating alternative housing solutions with the business community on a case -by -case basis. 7. BIA Remains Open to Alternative Solutions to Affordable Housing — BIA has prepared a policy memo to aid jurisdictions implement voluntary affordable housing programs. BIA /OC remains a resource to you and your staff should the City invite the business community to explore reasonable alternatives to mandatory inclusionary housing. BIA /OC's members include non - profit affordable housing developers, policy experts, land -use attorneys, and staff. The inclusionary zoning requirement is one the most significant issues for our membership because of its negative impact on housing production. We offer our support in forming policies that would benefit the residents of Newport Beach. For these reasons, we request the consideration of I Kowalski, Alex. "Homebuilder Confidence in U.S. Unexpectedly Dropped in April." Bloomberg L.P. April 15, 2013. http: / /www.bloomberg.conVnews/ 2013- 04- 15/bomebuil der - confidence- in -u -s- unexpectedly - dropped- in- aprilhtml (accessed April 15, 2013). 2 CAL. GOV. CODE Section 66016 removal of the inclusionary zoning mandate and in -lieu fee from the 2013 Housing Element update. Thank you for your time and thoughtful consideration. Sincerely, Michael Balsamo Chief Executive Officer cc: Planning Commission Mayor Keith Curry David Kiff, City Manager Kimberly Brandt, Community Development Director Enclosures: Department of Housing and Urban Development Letter DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT OFFICE OF THE DIRECTOR 1600 Third Street, Room, 450 Sacramento, CA 95611 0 (916)445 -4775 Fu (916) 3245107 m hcd.ca.cov December 13, 2007 Ms. Kristine E. Thalman Chief Executive Officer Building Industry Association of Orange County 17744 Sky Park Circle, Suite 170 Irvine, CA 92614 Dear Ms. Thalman: Thank you for your recent inquiry regarding inclusionary zoning ordinances. The Department is pleased to provide information on the requirements of State law and Department policy. In particular, you requested clarification on whether State housing element or other law requires the adoption of local inclusionary ordinances. In short, neither State law nor Department policy requires the adoption of any local inclusionary ordinance in order to secure approval of a jurisdiction's housing element. State law does require incentives for voluntary inclusionary development (State density bonus law), pronounces housing element law neutral relative to enactment of mandatory local inclusionary provisions, and circumscribes the responsibilities of local governments which do enact inclusionary policies. The relevant sections of the Government Code are described below. Government Code Section 65915 -17, State density bonus law, requires local governments to make incentives available to residential developers that voluntarily propose to reserve specified portions of a proposed development for occupancy by low - or moderate - income households, and indicates that local governments are not to undermine implementation of this provision. Every local government is required to adopt an ordinance establishing how it will implement State density bonus law, including setting forth the incentives the local government will provide. State housing element law requires jurisdictions to plan for their existing and projected housing needs, identify adequate sites to accommodate their share of the regional housing need, and, among other things, analyze local policies, regulations or requirements that have the potential to constrain the development, maintenance or improvement of housing for all income level. The law also requires programs to "assist in the development of adequate housing to meet the needs of low- and moderate - income households ". Ms. Kristine E. Thalman Page 2 Many local governments adopt mandatory inclusionary programs as one component of a comprehensive affordable housing strategy and have demonstrated success in increasing the supply of housing affordable to low- and moderate - income households. However, some inclusionary programs may have the potential to negatively impact the overall development of housing. As a result, local governments must analyze mandatory inclusionary policies as potential governmental constraints on housing production when adopting or updating their housing elements, in the same way that other land -use regulations must be evaluated as potential constraints. For example, local governments must analyze whether inclusionary programs result in cost shifting where the cost of subsidizing the affordable units is underwritten by the purchasers of market -rate units in the form of higher prices. Such increases can be a barrier to some potential homebuyers who already struggle to qualify for a mortgage, and earn too much to qualify for government assistance. Local governments must also analyze their inclusionary policies to evaluate whether sufficient regulatory and financial incentives are offered to facilitate compliance with the requirements. In addition, it is important to note that the adoption of mandatory inclusionary zoning programs do not address housing element adequate sites requirements to accommodate the regional housing need for lower- income households. Inclusionary programs are not a substitute for designating sufficient sites with appropriate zoning, densities and development standards as required by Government Code Section 65583(c)(1). Finally, Government Code Section 65589.8 specifies that nothing in housing element law shall be construed to expand or contract the authority of a local government to adopt an ordinance, charter amendment, or policy requiring that any housing development contain a fixed percentage of affordable housing units. It further states that a local government which adopts such a requirement shall permit a developer to satisfy all or a portion of that requirement by constructing rental housing at affordable monthly rents, as determined by the local government. California has been for many years in the midst of a severe housing crisis; there are simply not enough homes for the number of residents who need them. Continued undersupply of housing threatens the State's economic recovery, its environment, and the quality of life for all residents. Effectively addressing this crisis demands the involvement and cooperation of all levels of government and the private sector. Both the public and private sector must reexamine existing policies, programs and develop new strategies to ensure they operate most effectively and provide an adequate housing supply for all Californians. The Department is committed to working with its public and private sector partners in this effort for the benefit of California's growing population. Ms. Kristine E. Thalman Page 3 I hope this responds to your inquiry (916) 445 -4775 or Cathy Creswell, Development, at (916) 323 -3177. Sincerely, Lynn L. Jacobs Director . If you need additional information, please call me at Deputy Director, Division of Housing Policy Correspondence Item No. 5b Housing Element Update PA2012 -104 Comments on Housing Element Update (PC Agenda Item 5) These comments on Item 5 on the April 18, 2013 Newport Beach Planning Commission agenda are submitted by: Jim Mosher ( jimmosher(a)vahoo.com ), 2210 Private Road, Newport Beach 92660 (949- 548 -6229) General Comment Some of the City Council members seem to feel that items such as the Housing Element are little more than irritating meddling with local affairs by Sacramento. I believe it is well established that although charter cities are required to maintain a general plan, the zoning code in a charter city does not have to be consistent with it; and although the present Newport Beach zoning code includes a voluntary declaration of intent to be consistent with the general plan (NBMC section 20.10.030.B), it apparently does not have to do so. Should the City choose to adopt zoning inconsistent with the state - mandated general plan, what kinds of city actions, if any, would still be constrained by the general plan, and in particular, by the Housing Element? Specific Comments The following comments refer to the pages I have read of the 241 page document "Housing_Element Update Draft Changes.pdf' found linked to from the webpage referenced in the staff report, and titled "City of Newport Beach General Plan Housing Element - Draft 1 March 2013." Page 5 -2: • The statement that "The comprehensive Zoning Code Update, completed in October, 2010, implements many of the land use changes included in the 2006 General Plan update" implies some parts of the Zoning Code are inconsistent with the General Plan. What parts are those? • Regarding the statement that "The land use opportunities areas developed as part of the 2006 General Plan update have remained the same," why haven't they been updated? Haven't new opportunity areas developed since then? Such as the old City Hall site? And aren't some former "opportunity" sites, such as Uptown Newport, no longer opportunities? Page 5 -3: • In addition to the five units required by the 2004 - 2021 Regional Housing Needs Allocation, doesn't Newport Beach have a large commitment of unfulfilled housing commitments from earlier years? Page 5- 5: • ( "Data Sources "): Since not all of Newport Beach is in the Newport-Mesa District, school enrollment data would seem to need to include Santa Ana Unified and the Laguna Beach school districts. Page 5 -7: • In addition to the meetings listed, isn't the City Council's Affordable Housing Task Force meeting to review the plan? Page 5 -8: • How large was the correction necessitated by the 2010 census? Comments on Housing Element Update (4/18/2013) - Jim Mosher Page 2 of 4 Page 5 -9: • In Table H3, how is "Net Acre" defined? Does it include the sidewalks, parkways and other public portions of a residential lot? Page 5 -14: • The explanation of the discrepancy between the census and City vacancy rate estimates is not entirely convincing. Page 5 -15: • "Both the Marina Park Mobile Home Park and the Seacliff Mobile Home Park were approved for ..." Page 5 -16: • In Table H11, Seacliffe Mobile Home Park should have a footnote explaining its status, as detailed in the following paragraph (see the notes attached to Table H25 on page 5 -31). • In the paragraph following the table, Seacliffe is spelled without the final "e." Which is correct? Page 5 -17: • In Table H12, the references to "Section 8" and "Section 202" are unexplained. Page 5 -18: • In the paragraph describing "Villa Siena Condominiums ": "... may be sold at a price of no more than three times the permitted vP4 annual income of the person buying the unit ..." ( ?) Page 5 -19: • In the second full paragraph from the end: "... was subtracted decremented by the maximum monthly rent that a low- income household ..." [I am not familiar with the expression "subtracted by." I would suggest "decremented by" or "reduced by" or rearranging the sentence to make "subtraction" grammatical.] The HUD /HCD income estimates may be statistically accurate, but I have difficulty reconciling them with my sense of what the household descriptions would normally mean to me. I would think a two - person household consisting of two working (or retired) adults would have about twice the income of a single - person household, and that a four - person household consisting of two adults and two dependent children would have about the same income as a two - person one (and actually less available to spend on housing). Page 5 -20: • In footnote (a) to Table H13: "... one - person, twe one - bedroom units occupied by a two - person household, ..." • In first line under "Resources for Preservation ": "The types of resources needed available for preserving units at -risk fall into three categories:" • The following list includes "Section 202" (without explaining what it is). Should it also include "Section 8 "? Page 5 -21: • "Jamboree Housing is an active nonprofit housing developmen * developer that has constructed..." Comments on Housing Element Update (4/18/2013) - Jim Mosher Page 3 of 4 • "Olson Company —a local, for - profit developmen t developer, that has constructed over 7,000 new affordable senior, family, and special needs housing units throughout California." ( ?) • "The Irvine Company —one of the largest land developers on in Orange County, ..." Page 5 -22: "...This approval authorizes 524 new multi -unit [ ?] residential dwellings to be constructed within the North Newport Center Planned Community, which are expected to be constructed within the early first half of this planning period." [isn't this intended to mean a total of 524 units, not 524 "dwellings" each with multiple units ?] • What is the status of Banning Ranch for purposes of the Housing Element Update? At the second workshop, I believe Principal Planner Campbell said that the uncertainty of the Coastal Commission action made it impossible to include the in the affordable housing projections, yet it seems to be included. Page 5 -23: • In Table H14, how is "Group Quarters" defined, and how does it differ from a multi - family situation? Page 5 -25: • "... the City's senior population remains a significant proportion of the City's population and continues to grow, comprising of almost 19 percent in 2010." • In Table H19, the total enrollment evidently includes children from outside Newport Beach (presumably Costa Mesa), since it substantially exceeds the number of school age children reported in the previous table. • As previously mentioned, it would seem useful to report the number of Newport Beach children enrolled in the Santa Ana and Laguna Beach districts. Page 5 -26: • There seems to be some ambiguity as to the definition of "Very Low - Income." Here it says "31 to 50 percent" of AMI, but in the preceding section it says "0 to 50 percent." • "Median household income in Newport Beach traditionally historically has been greater than that of Orange County." Page 5 -27: • How is "elderly" defined, and how does it differ from "senior "? Page 5 -29: • For comparison with other cities, it would seem useful to provide the median sale price for Newport Beach as a whole. That cannot be determined from the data for individual zip codes. • For "Rental Costs," why are studio apartments in the table, but not used to define the low end of the range? Page 5 -32: • `... the affordable housing units in the community listed en in Table H12, ... Comments on Housing Element Update (4/18/2013) - Jim Mosher Page 4 of 4 Page 5 -33: • The statement that "The substantial reduction in the average household size in the City of Newport Beach in the last third of the twentieth century indicates the majority of City households are not overcrowded in terms of persons per dwelling unit' seems neither logically conclusive nor supported by evidence included in the document. • In the following paragraph, why is it "more than 1.01 persons per room" and not "more than 1 persons per room "? • "Them are 11 (less than 1 percent) owner- occupied units and 155 ( 1.1 percent) renter - occupied units were severely overcrowded with more than 1.5 persons per room." • Under "Employment Trends," aren't the jobs available in Newport Beach as important as, and distinct from, the jobs held by Newport Beach residents? Page 5 -193: • Why is the old City Hall site not shown as a housing opportunity? Page 5 -231: • Why is Uptown Newport still shown as a housing "opportunity "? Isn't it approved and "committed "? Employment and Income Special Needs Groups • Top employment industries for Elderly (overpayment is > 30% of Newport Beach population income): (44,109 Total Employed): 18.9% of City Population • Professional services: • 62.5% owner overpayment 8,985 (20.4 %) • 33.2% renter overpayment • Finance, insurance and Large Households (overpayment is >30% real estate: 8,075 (18.3 %) of income): • Educational and • 5% of all City households healthcare: 7,223(16.4 %) • 8% renter overpayment • 2010 Median Household Income: • 40% owner overpayment $105,655 (County $76,412) ' Female- Headed Households: • Average Person /Unit: 2.2 • 6% of City households • 27% of total household • 45.2 % renter - occupied Population .. • 12.7% below poverty level population is lower- income: (5.8% County increase) a Growing population: senior • Persons with Disabilities: • 8.6% Extremely Low (0 -30 tiWPp n�I�.�` .1111 16% of City Households %Area Median Income) . 3.6% of children and • 7.4 % Very -Low adolescents (31 -50 %AM I) • 4.1% of adults • 11% Low (51 -80% AMI) • 23.3% of seniors • Elderly renters had highest Developmental proportion of lower- income: Disabilities: 157 persons • 55% of elderly renters • Homeless: • 30.3% of elderly Additional Materials 133 based on information homeowners Item No. 5c from service providers, Housing Element Updatepolice, and school district PA2012 -104 Changes in Ethnicity 2000 2010 Non - Hispanic 88.3% 82.3% White Hispanic 4.6% 7.2% Asian 4.7% 7% African 0.5% 0.7% American Other 1.9% 2.8% Household Composition 2010 • Total Housing Units: 44,193 • Total Occupied Housing Units: 38,751 • Average Person /Unit: 2.2 • Tenure: • 54.8 % owner-occupied • 45.2 % renter - occupied Population .. Population: a Total population growth since 2000 (5.8% County increase) a Growing population: senior 000 9 County 11.6 %in 2010 tiWPp n�I�.�` .1111 2012 Income Limits and Affordable Housing Costs (4- person Household) • Extremely Low: $28,900 • Rent: $722.50 Home Price: $86,700 • Very Low: $48,150 Rent: $1,203.75 Home Price: $144,450 • Low: $77,050 Rent: $1,926.25 • Home Price: $231,150 • Moderate: $102,350 Rent: $2,558.75 Home Price: $307,050 Housing Costs • Median Home Prices (2011) • Newport Coast: $1,611,000 • Corona del Mar: $1,387,500 • Remainder of City: $1,000,000 • Average Rental Costs (Nov. 2012) • One Bedroom: $1,941 • Two Bedroom: $2,312 • Three Bedroom: $2,857 Existing Affordable Housing 11 sites with 401 affordable units (5 owner - occupied /396 rental) 127 County Housing Choice Vouchers (Section 8) served in City Expiring Affordable Housing Units (At -Risk) 7 affordability covenants set to expire between 2016 and 2023 153 rental units Local Housing Resources • Current balance of 2.2 million in Affordable Housing Fund • Community Development Block Grants • Inclusionary Housing Ordinance (requires an average of 15% of new for -sale units to be affordable) • Density Bonus Ordinance (authorizes 5 -35% housing unit increase depending on number of affordable units provided by a project)