HomeMy WebLinkAboutSS2 - General Plan Housing Element Update0(9
CITY OF NEWPORT BEACH
COMMUNITY AND ECONOMIC DEVELOPMENT
PLANNING DEPARTMENT
3300 NEWPORT BOULEVARD
NEWPORT BEACH, CA 92658
(714) 644 -3200; FAX (714) 644 -3250
Date:
Agenda Item No.:
Staff Person:
REPORT TO THE MAYOR AND CITY COUNCIL
SUBJECT: Update of General Plan Housing Element
SUGGESTED
ACTION: Discussion and Direction to Staff
BACKGROUND:
April 26, 1999
SS2
Christy Teague
(949) 644 -3207
Council member Debay requested a discussion of the Housing Element update at the City Council
meeting of March 22, 1999. Cities have not been required to update housing elements since 1992
because the State has not funded the Regional Housing Needs Assessment (RHNA) process since that
time. The funding was reinstated recently and the RHNA work is nearly finished. Cities are required
• to submit updated housing elements to the State by June 30, 2000.
HOUSING ELEMENT REQUIREMENTS
Housing Element Update
State planning law requires cities to adopt housing elements that address regional needs for housing
affordable to all income levels. The time period to be covered in the next Housing Element update
is from January 1, 1998 to June 30, 2005. It must be submitted to the State Department of Housing
and Community Development by June 30, 2000.
Cities are required to include the housing need numbers produced by the RHNA process in their
housing elements as goals. Although cities are not required to spend their funds to develop
affordable housing, the Housing Element must include policies and programs that facilitate and
make possible production of the needed housing units. The required components include: an
assessment of housing needs; an analysis of household characteristics; an analysis of existing
assisted housing developments that are eligible to change from low- income housing uses during the
next 10 years due to expiration or termination of agreements; a statement of the community's goals,
quantified objectives, and policies relative to the maintenance, preservation, improvement, and
development of housing; a program which sets forth a five -year schedule of actions to achieve the
goals and objectives of the housing element; identification of adequate sites for housing; assistance
• in the development of adequate housing to meet the needs of low and moderate - income households;
removal of governmental constraints to the maintenance, improvement, and development of
housing; programs to conserve and improve the condition of the existing affordable housing stock;
-1-
Housing Element update must include a report on progress in achieving the goals of the previous
Housing Element. As preparation for meeting these requirements, staff suggests the City Council
begin discussing affordable housing needs, the affordable housing requirements of the CIOSA and •
One Ford Road development agreements, and potential programs to meet the City's housing needs.
Regional Housing Needs Assessment (RHNA)
The RHNA is a state - mandated estimate of housing needs that cities are required to use in housing
elements. In the past, SCAG has handled this process for the Southern California region. For the
current update cycle, the Orange County COG has chosen to take the lead with the County, using
SCAG housing projections for the County. These overall county projection numbers are distributed
among jurisdictions based on household growth, vacancy need, and replacement need. This process
results in an assignment of the number of housing units to be produced in each jurisdiction during
the planning period of January 1, 1998 to June 30, 2005.
Because City staff previously worked with the OCCOG to develop population projections, housing
needs in Newport Beach are based on a projection in which the City has confidence. The City of
Newport Beach has been assigned a need of 498 dwelling units within the planning period of
January 1, 1998 to June 30, 2005, as shown on the attached RHNA summary of construction need
for Orange County. The next step in the RHNA process is for the total number of housing units
needed to be broken down by income category, providing a "fair share" number of affordable
housing needs within each jurisdiction. In the last housing element cycle, Newport Beach's
affordable housing need was 20% of the total housing units recommended. This would result in a
need for approximately 100 units for low- income households in the current cycle. •
CIOSA
The Circulation Improvement and Open Space Agreement ( CIOSA) was approved by the City
Council in 1992. CIOSA granted entitlements for several properties held by The Irvine Company,
including entitlements for 861 market rate housing units. Because CIOSA is silent on a specific
affordable housing requirement, staff believes the 20% requirement of the Housing Element should be
used, resulting in an obligation to provide 172 affordable housing units. The City and The Irvine
Company have discussed the development of senior housing facilities at Newport Village in Newport
Center and also at Bayview Landing. Agreement could not be reached on the Newport Village site,
and The Irvine Company has not pursued the Bayview Landing site. All of the market rate units
entitled by CIOSA have been built. Staff believes the Housing Element update will be stronger if the
City has a plan from The Irvine Company to meet its affordable housing obligation, which will
demonstrate progress in implementing the existing Housing Element.
Ford Agreement
The Ford development agreement approved in 1995 specified that Ford's affordable housing
requirement is 15% of the 404 units, or 61 units. In lieu of constructing affordable housing units, the
developer paid the City $5,000 for every market rate unit developed, for a total of $2,020,000, to
facilitate affordable housing in Newport Beach. These funds were received in May of 1997, and
have been held in an account while the City has explored the best use of these funds for affordable
Page 2
housing goals. Since negotiations with The Irvine Company on use of these funds for a project at
• Newport Village have terminated, staff believes the City should consider other uses of these funds
so that a plan can be included in the Housing Element update.
POTENTIAL HOUSING PROGRAMS
Private Sector Development of New Affordable Housing Units with City Assistance
The construction of new housing units may be the most feasible way to meet the numerical RHNA
fair share goals. This could be an option for the Ford money available for affordable housing, but
may be difficult for the City to accomplish due to the lack of available land in Newport Beach. The
Irvine Company may be in the best position to construct new units because they have available land
and are experienced in housing development.
Negotiate Extensions of Expired and Soon -to -Expire Affordable Housing Agreements
The Irvine Company owns most of the projects with affordable housing agreements in Newport Beach.
In the last five years, the agreements have expired on 294 of these units. There are an additional 17
units due for termination. If extensions are negotiated, these units would not be eligible to apply
toward the "fair share" goals of the RHNA, but they would meet the requirement of "conserving and
improving the condition of the existing affordable housing stock" set forth in the state law. Saving
affordable units soon to be converted to market rate units is a possibility for The Irvine Company
obligation and for use of the Ford money.
• Rehabilitation of Existing Units and Conversion to Affordable Housing Units
•
There are a few projects potentially in need of rehabilitation assistance in Newport Beach.
Rehabilitated units do not count towards the RHNA goal unless units are "unfit for human
habitation prior to their rehabilitation" and "at imminent risk of loss to the housing stock," among
other criteria. However, this strategy does meet the requirement of "conserving and improving the
condition of the existing affordable housing stock" set forth in the state law, as well as improve the
neighborhood in which the units are located. This is a possibility for use of the Ford money
designated for affordable housing.
Community Development Block Grant Funds
In the mid- 1990s, during the last housing element period, CDBG funds were successfully used to
assist development of affordable housing. The City has focused Community Development Block
Grant funds on Peninsula revitalization in recent years, and the City Council has given that direction
for the upcoming fiscal year. The focus of future CDBG funds could be on affordable housing if the
final RHNA numbers and Housing Element analysis show the need cannot be met with other
resources.
Page 3
CONCLUSION
The issue of affordable housing must be addressed by the City. The State requirement including "fair
share" affordable housing units must be incorporated into a comprehensive Housing Element of the
General Plan over the next year. There are outstanding obligations to provide affordable housing units
by The Irvine Company through the CIOSA Agreement and also by the City for use of the Ford funds
accepted upon receipt of their housing entitlements. Staff is seeking City Council discussion and
direction regarding the alternatives for meeting affordable housing goals in Newport Beach.
Submitted by:
SHARON Z. WOOD
Assistant City Manager
Prepared by:
CHRISTY D. TEAGUE, AICP
Senior Planner
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Attachments: Regional Housing Needs Assessment Summary
Letter on Affordable Housing from Julie Mirrow Dated March 13,1999
Page 4
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