The URL can be used to link to this page

Home My WebLink About14 - 2014-2021 Housing Element Update� t�EW ART p O z c9C /F00.N�P TO: CITY OF NEWPORT BEACH City Council Staff Report Agenda Item No. 14 May 14, 2013 HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Community Development Department Kimberly Brandt, AICP, Director 949 - 644 -3226, kbrandt @newportbeachca.gov PREPARED BY: Jaime Murillo, Associate Planner Melinda Whelan. Assistant Planner APPROVED: TITLE: 2014 -2021 Housing Element Update (PA2012 -104) ABSTRACT 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 identifies 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. The draft 2014 -2021 Housing Element is accessible online at http:// www. newportbeachca .gov /housingelementupdate. RECOMMENDATION 1) Conduct a public hearing; 2) Discuss and provide comment related to the draft of the 2014 -2021 Housing Element Update, including but not limited to directing staff to either: (a) maintain the current Housing Element's Inclusionary Housing Ordinance; or (b) modify or remove the current Housing Element's Inclusionary Housing Ordinance; and 3) Authorize submission of the draft of the 2014 -2021 Housing Element Update to the Department of Housing and Community Development. 1 Housing Element Update May 14, 2013 Page 2 The current adopted budget includes sufficient funding to complete this amendment. Staff estimates that approximately 450 hours will be spent on this effort plus the cost of noticing and publishing materials for workshops and public hearings. 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 authorization, staff will submit the draft 2014 -2021 Housing Element Update to HCD 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 Review of Initial Draft (April 18, 2013 Completed Affordable Housing Task Force Aril 25, 2013 Completed City Council Review of Initial Draft May 14, 2013 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. 2 Housing Element Update May 14, 2013 Page 3 DISCUSSION 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 complete document, including versions illustrating strike -outs and revisions, is found online at http:// www. newportbeachca .gov /housinoelementur)date. The following is an outline of the Housing Element Sections: 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, seniors, 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. 3 Housing Element Update May 14, 2013 Page 4 • 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). 2. Housing Goals and Policies, Quantified Objectives, and Programs • General Review of 2008 -2014 Housing Element and Housing Activities —A review of the appropriateness and accomplishments of goals, policies, and programs of the 2008 -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 -125). • 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 (2014 -2021) 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 -128). Attachment No. CC 1 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 4 Housing Element Update May 14, 2013 Page 5 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 -2014) Housing Element resulted in a total housing need of 1,914 dwellings, including 770 dwelling units affordable to lower - income households. Through the Sites Analysis and Inventory discussed in more detail below, the City was able to illustrate adequate sites exist within the City that can accommodate this need. For the upcoming 2014 -2021 planning period, the City's RHNA allocation has reduced significantly. 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: 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 -46 (summary) and Appendix H3. 0 Housing Element Update May 14, 2013 Page 6 Local Housing Needs Although RHNA for this new planning period is only five units, it is important to recognize that RHNA is the City's share of projected regional growth. The data in the Housing Element also illustrates that there remains an existing need for housing affordable to lower- income households and special needs populations that must also be addressed. 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 primarily limited to the small number of rent restricted affordable housing units in the City 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) • Senior renter households had significantly higher proportions of lower- income households than any other household type. Approximately 55 percent of all senior renter households and 30 percent of senior owner households earned lower- income levels (see Table H22). The City's senior 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 10 separate affordable housing covenants on various rental and owner - occupied housing developments, for a total of 376 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). 0 Housing Element Update May 14, 2013 Page 7 Housing Programs The goals, policies and programs are the most important component of the Housing Element. The goals provide the end result sought by the City; the policies 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. Table H40 (page 5 -103) provides an overview of the accomplishments associated with each 2008 -2014 Housing Element program and whether the program remains appropriate to retain in the update. 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. 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 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 -128 through 5 -146 of the Draft. Public Outreach Public Workshops 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 rW, Housing Element Update May 14, 2013 Page 8 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. April 18, 2013 Planning Commission The Draft Housing Element was also presented to the Planning Commission on April 18, 2013. The Building Industry Association of Orange County (BIA) submitted a letter (Attachment No. CC2) and provided oral comments requesting that the City remove the inclusionary housing program (Program 2.2.1). After extensive discussion, the Planning Commission voted to keep the inclusionary housing program within the Draft Housing Element on the basis that it is one of the City's strongest tools for the production and preservation of affordable housing in the City. The ordinance that implements the program (Chapter 19.58 of the Municipal Code) only applies to new for -sale housing developments (excludes proposed rental developments) and was developed to provide various flexible options and has been determined not to be an unreasonable constraint on the development of new housing. In addition to the inclusionary housing discussion, a number of typographical errors and clarifications were presented by members of the public and the Planning Commission, including a request to change the term "elderly" to "senior" throughout the document. These revisions have been included in the most current draft distributed to the City Council. April 25, 2013 Affordable Housing Task Force An overview of the Draft Housing Element was also presented to the Affordable Housing Task Force on April 25, 2013. Staff provided a detailed summary of the update, discussed proposed revisions to the housing programs, and discussed the various issues raised at the public workshops and Planning Commission meeting. In conclusion, they indicated their general agreement with the proposed update and revisions to the Housing Element. Availability of Documents 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 facilitate the review by residents and interested parties. Copies of the Draft Housing Element were also made available for review at City Hall. N Housing Element Update May 14, 2013 Page 9 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. newportbeachca .gov /cegadocuments. 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. Submitted by: Rimberly .0. . Director ATTACHMENTS CC 1 HCD Housing Element Worksheet CC 2 BIA Letter Dated April 18, 2013 I 10 Attachment No. CC 1 HCD Housing Element Worksheet 21 12 0 `oyM1�uxiry Housing Element Update Guidance O'�GfFORMP Attachment 2: Completeness Checklist 1-71 Housing Element Update Guidance Attachment 2 — Completeness Checklist Public Participation (Section 65583(c)(8)) (See Buildina Blocks at hfD:/ /www.hcd.ca.aov /hod /housina element Description of diligent effort to include all economic segments of the community 5 -6 to 5 -8 and /or their representatives in the development and update of the housing element (e.g., types of outreach, meetings, appropriate languages, list of invitees and general comments and how they were incorporated) Review and Revise (Section 65588) or (See Building Blocks at httQ://www.hcd.ca.gov/hpd/housing element2 /GS reviewandrevise. h Page(s) Comments Progress in implementation — A description of the actual results or outcomes of the 5 -98 to 5 -123 prior element's goals (i.e., what happened), objectives, policies, and programs. Include quantification of results where possible (e.g., number of units rehabilitated) and may be qualitative where necessary (e.g., mitigation of governmental constraints) Effectiveness of the element — For each program, include an analysis comparing 5 -98 to 5 -123 significant differences between what was projected or planned in the earlier element and what was achieved. Analyze the differences to determine where the previous housing element met, exceeded, or fell short of what was anticipated Appropriateness of goals, objectives, policies and programs — A description of what 5 -103 to 5 -126 has been learned based on the analysis of progress and effectiveness of the previous element. A description of how the goals, objectives, policies, and programs in the updated element are being changed or adjusted to incorporate what has been learned from the results of the previous element California Department of Housing and Community Development i'4' Housing Element Update Guidance Attachment 2 — Completeness Checklist Housing Needs Assessment (Section 65583(a)(1 and 2)) See Building Blocks at http: / /www.hcd.ca.gov /hpd /housing element2 /HN home.php Page(s) Data Source Comments (if not identified in the housing element) Quantification and analysis * of existing and projected housing needs 5 -35 to 5- 44 Populations and employment trends, including documentation of 5 -22 to 5- projections 26, 5 -33 to 5 -35 Housing and Household characteristics, including: 5-14,5-26 • Level of payment compared with ability to pay (overpaying to 5 -33 households) • Housing stock conditions • Overcrowded households Existing and projected needs for all income levels, including: 5 -27 to 5- • Regional Housing Need Allocation (RHNA) 28,544, 5 -125 to • Existing housing need for extremely low income households 5 -126 • Projected housing need for extremely low income households based on RHNA or Census (see Section 65583(a)(1)) Analysis is defined as a description and evaluation of specific needs, characteristics and resources available to address identified needs California Department of Housing and Community Development Z� Housing Element Update Guidance Attachment 2 — Completeness Checklist Persons with Special Needs (Section 65583(a)(7)) _See Building Blocks at tgg://www.hcd.ca.gov/hRd/housing element2 /HN SHN home. ph Page(s) Data Source Comments (if not identified Identification and analysis of any special housing needs including:* in the element) • Elderly 5 -37 to 5 -38 • Persons with disabilities, including developmental disabilities 5 -36 to (See Memo at http: / /www. hcd. ca. gov /hpd /NoticeCoverLttrSB812.pdf) 5 -37 • Large households 5 -38 to 5 -39 • Farmworkers (seasonal and permanent) 5 -44 • Female headed households 5 -37 • Homeless (annual and seasonal) "' 5 -39 to 5 -44 • Other 5 -35 students Analysis is defined as a description and evaluation of specific needs, characteristics and resources available to address identified needs * See Section 65583(a)(7) for additional information regarding this requirement At -risk Units (Section 65583(a)(9) (See Building Blocks at http: / /www.hcd.ca.gov /hpd /housing_ element2 /EHN atrisk.php Page(s) Comments Inventory of at -risk units (10 years from the housing element due date) (Section 5 -18 to 5 -19 65583(a)(9)(A)) Estimate of replacement versus preservation costs (Section 65583(a)(9)(B)) 5 -19 to 5 -20 Identification of qualified entities Section 65583(a)(9)(C)) 5 -20 to 5 -22 California Department of Housing and Community Development 10 Housing Element Update Guidance Attachment 2 — Completeness Checklist Identification of potential funding Section 65583(a)(9)(D)) 5 -20 to 5 -22 Note: Section 65583(a)(9) has many detailed requirements. Agencies with at -risk units should review the specific statutory requirements to ensure a complete analysis. Potential Governmental and Non - governmental Constraints _F (Section 65583(a)(5 and 6)) (See Building Blocks at hftp://www.hcd.ca. ov /h d /housin element2 /CON home. h ) Page(s) Comments Potential Governmental Constraints Include an analysis of actual and potential governmental constraints for each of the following: Land use controls (e.g., parking, lot coverage, heights, unit sizes, open 5 -81 to 5 -89 space requirements, floor area ratios, growth controls (e.g., caps on units or population or voter approval requirements) Building codes and their enforcement (e.g., current CBC, any local 5 -92 to 5 -93 amendments and local code enforcement programs) Site improvement requirements (e.g., street widths, etc.) 5 -89 Fees and other exactions (e.g., analyze all planning and impact fees 5 -93 and impact on total development costs) Local processing and permit procedures (e.g., typical processing 5 -94 times, permit types by housing type, decision - making criteria and bodies) Housing for persons with disabilities (e.g., definition of family, 5 -95 to 5 -97 concentration requirements, reasonable accommodation procedures) California Department of Housing and Community Development 17 Housing Element Update Guidance Attachment 2 — Completeness Checklist Potential and actual constraints on the development of a variety of 5 -81 to 5 -92 housing types for all income levels, including multifamily rental housing, factory-built housing, mobiles homes, housing for agricultural employees, supportive housing, single -room occupancy units, emergency shelters and transitional housing California Department of Housing and Community Development Z. g Page(s) Comments Local efforts to remove governmental constraints that hinder the 5 -81 to 5 -97 locality from meeting its share of the regional housing need Local efforts to remove governmental constraints that hinder 5 -95 to 5 -97 meeting the need for housing for persons with disabilities, supportive housing, transitional housing and emergency shelters Transitional housing and supportive housing as a residential use 5 -87 to 5 -88 of property and subject only to those restrictions that apply to other residential dwellings of the same type in the same zone Potential Non - governmental Constraints Include an analysis of actual and potential non - governmental constraints for each of the following: Availability of financing 5 -79 Price of land 5 -79 to 5 -80 Cost of construction 5 -79 to 5 -80 California Department of Housing and Community Development Z. g Housing Element Update Guidance Attachment 2 — Completeness Checklist 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.php Page(s) Comments Listing of properties by parcel number or other unique, reference showing for each Appendix H3 parcel (Section 65583.2(b)(1) — (3): 5 -160 to • Size 5 -237 • General plan designation • Zoning category • For non - vacant sites, description of existing uses • Number of units that can be accommodated on each site Sites available for Above Moderate income households and not served by ublic sewer need not be identified on a sites ecific basis Section 65583.2(b)L6)] General description of environmental constraints to the development of housing 5 -170 (Section 65583.2(b)(4) General description of infrastructure (planned /available) including water, sewer and 5 -170 to other dry utilities, including availability and access to distribution facilities 5 -172 Section 65583.2(b)(5) In determining the number of units on each site, indicate how the number of units was 5 -160 to determined. 5 -170 • If development is required at minimum density, indicate the number of units at the minimum density. No further analysis is required. • If development is not required at minimum density, demonstrate how the number of units were determined and adjust, if necessary, for local land use controls. California Department of Housing and Community Development 19 Housing Element Update Guidance Attachment 2 — Completeness Checklist California Department of Housing and Community Development 20 Page(s) Comments For Non - vacant sites, specify the additional development potential for each site within 5 -160 to 5- the planning period and provide an explanation of the methodology to determine 170, 5 -177 to development potential considering factors, including the extent to which existing uses 5 -237 may constitute an impediment to additional residential development, development trends, market conditions and regulatory or other incentives to encourage additional residential development Section 65583.2(b)(7)) Demonstration of zoning to accommodate the housing need for lower income 5 -75 to 5 -78, households (Section 65583.2(c)(3)) and (d) — (f)) 5 -166 to 5- 170, 5 -225 to 5 -237 • Indicate those sites that can accommodate lower income households 5 -75 to 5 -78 • Indicate those sites where the density allowed is at the "deemed appropriate" [default] density (65583.2(c)(3)(B)) • For sites that can accommodate lower income households, but with allowed densities less than the "deemed appropriate" density, provide analysis demonstrating how the adopted densities accommodate the need for lower income housing. The analysis must include: • Market demand • Financial feasibility • Project experience within a zone providing housing for lower income households (65583.2(c)(3)(A)) Map of Sites included in the inventory (Section 65583.2(b)(7)) 5 -173 to 5 -237 Number of units built between the start of the projection period and the deadline for N/A adoption of the housing element (Government Code Section 65583.1(d) Number of units proposed using alternative provisions such as rehabilitation, N/A The City does not conversion, preservation or second units (Section 65583.1). See checklist at choose to use httr)://www.hcd.ca.gov/hi)d/housing element2 /exam les /655831Checklist. df alternatives California Department of Housing and Community Development 20 Housing Element Update Guidance Attachment 2 — Completeness Checklist California Department of Housing and Community Development 21 Page(s) Comments Identification of zoning for a variety of types: Multifamily rental housing 5 -85 to 5 -86 Factory-built housing 5 -85 to 5 -86 Mobilehomes 5 -85 to 5 -86 Housing foragricultural employees 5 -85 to 5 -86 Emergency shelters (See Section 65583(a)(4) and the Department's memo at http://www.hcd.ca.gov/hpd/sb2 memo050708. df 5 -87 to 5 -88 Transitional and supportive housing (See Section 65583(a)(5) and the Department's memo at htti): / /www.hcd.ca.gov /hpd /sb2 memo05O7O8.r)df) 5 -88 Carryover obligation (AB 1233: Section 65584.09 — See memo at http: / /www.hcd.ca.aov /hpd /hrc /plan /he /ab 1233 final dt.pdf) N/A California Department of Housing and Community Development 21 Housing Element Update Guidance Attachment 2 — Completeness Checklist Quantified Objectives and Housing Programs (Section 65583(b) and (c)(1 through 6)) (See Building Blocks at http://www.hcd.ca.gov/hpd/housing element2 /PRO home. h Pages) Comments Provide statement of quantified objectives (Section 65583(b)): Maximum number of units, by income group, including extremely low- 5 -125 to 5- income of: 127 • new construction; • rehabilitation; and • conservation. Include programs (Section 65583(c) and (c)(7)) with: • Schedule of specific actions; 5 -128 to 5- • Timeline for implementation with a beneficial impact in the planning 146 period; and • Identification of agencies and officials responsible for implementing each program. Program(s) providing adequate sites (Section 65583(c)(1)): Programs to rezone and any other programs needed to address a HP 3.2.2 Not a rezone but provides an shortfall of sites to accommodate the regional housing need, if 5 -137 exception to the minimum 10- applicable, and any programs included pursuant to Section 65583.2(h) acre site requirement for and (i) or carryover obligation pursuant to Section 65584.09 affordable housing projects Programs to rezone and any other programs needed to address a N/A shortfall of capacity for housing for farmworkers that could not be accommodated on sites identified in the inventory, if applicable. If applicable, programs to facilitate a variety of housing types, including HP 2.1.1, 2.1.2, multifamily rental, factory-built housing, mobilehomes, housing for 2.1.3, 2.1.4, agricultural employees, supportive housing, single room occupancy, 2.1.5, 2.1.6 emergency shelters and transitional and supportive housing 5 -130 to 5 -132 California Department of Housing and Community Development 22 Housing Element Update Guidance Attachment 2 — Completeness Checklist California Department of Housing and Community Development 10 23 Page(s) Comments Programs to assist in the development of housing for extremely low, very low, HP 2.1.1, 2.1.2, low and moderate income households (Section 65583(c)(2)) 2.1.3, 2.1.4, 2.1.5, 2.1.6, 2.2.1, 2.2.2, 2.2.3, 2.2.4, 2.2.5, 2.2.6, 2.2.7, 2.2.8, 2.2.9, 2.2.10, 2.2.11, 2.3.1 5 -130 to 5 -135 Program(s) to address governmental constraints (Section 65583(c)(3)): Programs to address governmental constraints and where appropriate HP 3.1.1, and legally possible, to remove constraints to the maintenance, 3.1.2,3.1.3,3.2.1, improvement and development of housing 3.2.2, 3.2.3, 3.2.4 5 -136 to 5 -138 Program to remove constraints on housing for persons with disabilities N/A 5 -95 to 5 -97 provides analysis and provide reasonable accommodation for housing for persons with showing existing Zoning and disabilities Codes are in place to address this requirement Program(s) to conserve and improve the condition of the existing affordable HP 1.1.1, 1.1.2, housing stock (Section 65583(c)(4)) 1.1.3, 1.1.4 5 -129 to 5 -130 HP 5.1.1, 5.1.2, Program(s) to promote housing opportunities for all persons (Section 65583(c)(5)) 5.1.3, 5.1.4, 5.1.5, 5.1.6, 5.1.7 5 -143 to 5 -145 California Department of Housing and Community Development 10 23 Housing Element Update Guidance Attachment 2 — Completeness Checklist Program(s) to preserve at -risk units (Section 65583(c)(6)) HP 4.1.1, 4.1.2, 4.1.3, 4.1.4, 4.1.5, 4.1.6, 4.1.7 5 -139 to 5 -141 California Department of Housing and Community Development 11 Housing Element Update Guidance Attachment 2 — Completeness Checklist Other Requirements (See Building Blocks at http: / /www.hcd.ca.gov /hpd /housing element2 /OR home.php) and http://www.hcd.ca.gov/hpd/housing element2 /SIA conservation. h Page(s) Comments Description of general plan consistency Section 65583(c)(7)) 5 -4 to 5 -5 Analysis of construction, demolition and conversion of housing for lower 5 -91 to 5 -92, 5- income households in the Coastal Zone Section 65588 125 Description of opportunities for energy conservation in residential 5 -78, HP 4.2.1, development (Section 65583(a)(8)) 4.2.2, 4.2.3, 4.2.4, 4.2.5, 4.2.6 5 -141 to 5 -143 Water and Sewer Priority (Section 65589.7) See the HCD Memo at HP 2.2.9 5 -134 http: / /www.hcd.ca.gov /hpd /memo sb1087.pdf. * SB 5 and AB 162 (Flood Hazard Land Management) See the HCD Memo at N/A http: / /www.hcd.ca.gov /hpd /hrc /plan /he /ab 162 stat07.pdf * SB 244 (Disadvantaged Communities) See Governor's Office of Planning N/A and Research for technical assistance at http: / /opr.ca.gov/ * * These are not required for a complete housing element and are not required to be part of the housing element and have been include as an information item to assist local governments in meeting requirements triggered by the housing element update schedule. California Department of Housing and Community Development 12 25 20 Attachment No. CC 2 BIA Letter Dated April 18, 2013 27 M 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, Orange County Chapter Building Industry Av..hoi.n of Southern California 17744 Sky Park Circle Suite 170 Irvine, California 92614 949.553.9500 fax 949.553.9507 ..biaoc.com �9 PRESIDENT On behalf of our membership, we would like to thank city staff for their invitation to the DAVE BULLOCH 2013 Housing Element meetings. After careful review of the proposed housing element STANDARD PACIFIC HOMES update, we request the removal of the inclusionary housing mandate and propose a VICE PRESIDENT voluntary program as an alternative. DONNA KELLY LENNAR TREASURER The Building Industry Association of Southern California, Orange County Chapter JOAN MARCUS - COLVIN (BIA /OC) is a non -profit trade association of nearly 1,000 companies employing over THE NEW HOME COMPANY 100,000 people affiliated with the home building industry. The Orange County Chapter SECRETARY represents the largest member base within BIA Southern California. Our mission is to BRIAN GEIS BROOKFIELD HOMES champion housing as the foundation of vibrant and sustainable Communities. IMMEDIATE PAST PRESIDENT MICHAEL McCANN We recommend the elimination of the Inclusionary housing mandate and in -lieu fee based ALLIANCE RESIDENTIAL on the following seven points: TRADE CONTRACTOR COUNCIL V.P. TOM RHODES TWR ENTERPRISES 1. The City of Newport Beach is Within its Rights to the Eliminate Inclusionary ASSOCIATE VICE PRESIDENT Zoning Mandate — Multiple letters from the Department of Housing and Urban MARK HIMMELSTEIN Development indicate that Inclusionary housing mandates are not a requirement for NEWMEYER & DIL LION, LLP the approval of a jurisdiction's housing element. State law does require MEMBER -AT -LARGE jurisdictions to provide incentives for voluntary affordable housing development. MIKE WINTER SARES -REGIS GROUP Many inclusionary zoning advocates mistakenly cite Regional Housing Needs MEMBER -AT -LARGE Allocation (RHNA) reports as a requirement for the production of inclusionary JIM YATES housing. RHNA is a tool for cities to plan effectively for population growth. The RANCHO MISSION VIEJO City has a reasonable allocation considering that the current goal is just 5 units CHIEF EXECUTIVE OFFICER necessary for future population growth. MICHAEL BALSAMO 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 �9 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. 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 Kowalski, Alex. "Homebuilder Confidence in U.S. Unexpectedly Dropped in April." Bloomberg LF. April 15, 2013. http: / /www.bloomberg.conVnms/ 2013- 04- 15/homebuilder- confidence- in -u -s- unexpectedly- dropped- in- april.html (accessed April 15, 2013). 2 CAL. GOV. CODE Section 66016 30 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 Kill, City Manager Kimberly Brandt, Community Development Director Enclosures: Department of Housing and Urban Development Letter 31 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 ". 32 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. 33 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 34 jga NOTICE IS HEREBY GIVEN that on May 14, 2013, at 7:00 p.m., a public hearing will be conducted in the City Council Chambers at 100 Civic Center Drive, Newport Beach. The City Council of the City of Newport Beach will consider the following application: 2014 -2021 Housing Element Update - An amendment to the Newport Beach General Plan incorporating the 2014 -2021 Housing Element update. The proposed Newport Beach Updated Housing Element is a comprehensive statement of the City's housing policies and serves as a guide for implementation of these policies. The Housing Element update examines current housing needs, estimates future housing needs, and establishes goals, policies, and programs pertaining to those needs. Housing programs are responsive to current and future needs and established within the context of available community, state, and federal economic and social resources, and realistic quantified housing objectives. NOTICE IS HEREBY FURTHER GIVEN that 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. newportbeachca .gov /cegadocuments. NOTICE IS HEREBY FURTHER GIVEN that on April 18, 2013, by a vote of (7 -0), the Planning Commission of the City of Newport Beach recommended that the City Council authorize submission of the draft of the 2014 -2021 Housing Element Update to the Department of Housing and Community Development. All interested parties may appear and present testimony in regard to this application. If you challenge this project in court, you may be limited to raising only those issues you raised at the public hearing or in written correspondence delivered to the City, at, or prior to, the public hearing. The application may be continued to a specific future meeting date, and if such an action occurs additional public notice of the continuance will not be provided. Prior to the public hearing the agenda, staff report, and documents may be reviewed at the City Clerk's Office, 100 Civic Center Drive, Newport Beach, California, 92660 or at the City of Newport Beach website at www.newportbeachca.gov. Individuals not able to attend the meeting may contact the Planning Division or access the City's website after the meeting to review the action on this application. For questions regarding details of the project please contact Melinda Whelan, Assistant Planner, at 949 -644- 3221 or at mwhelan(a)newportbeachca.gov. Project File No.: PA2012 -104 Activity No.: General Plan Amendment No. GP2012 -004 Zone: All Zone Districts Location: Citywide General Plan: All Land Use Categories Applicant: City of Newport Beach Leilani I. Brown, City Clerk City of Newport Beach PU:L.I(,ATIOOfJ STATE OF CALIFORMA) SS, COUNTY OF ORANGE I am a citizen of the United States and a resident of the County of Los Angeles; I am over the age of eighteen years, and not a party to or interested in the notice published. I am a principal clerk of the NEWPORT BEACH /COSTA MESA DAILY PILOT, which was adjudged a newspaper of general circulation on September 29, 1961, case A6214, and June 11, 1963, case A24831, for the City of Costa Mesa, County of Orange, and the State of California. Attached to this Affidavit is a true and complete copy as was printed and published on the following date(s): Saturday, May 4, 2013 I certify (or declare) under penalty of perjury that the foregoing is true and correct. Executed on May 7, 2013 at Los Angeles, California Signature (NOTICE OF PUBLIC HEARING F,anquespons regardin9A6tails of the.project please contact Melinda Whelan, Assistant Planer; at 949-644;3221 oval mwhelan @newoortbeactica nuv PFOjectFile No: PA2012704s ,A`ctivity`Bo: Generag,PlaYAmdiitlmerd. No GP2012 -004, Zone: All ZoneiOistricts General Plan All Lrand Use Categorles Location Citywide Applicant CIT off Newpoh Be °acfi /eilani 14[ M 11 Cdy 1—K C Styof,NeWpor(.Beaph3 _