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Home My WebLink About04 - Repeal of Inclusionary Housing_PA2013-221= CITY OF i NEWPORT BEACH. C9GIFOANF City 'Council Staff Report Agenda Item No. 4 November 26, 2013 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FRONT: Community Development Department Kimberly Brandt, AICP, Director 949 - 644 -3226, kbrandt @newportbeachca.gov PREPARED BY: Melinda Whelan, Assistant Planner APPROVED:2v�( p V\ TITLE: Repeal of the Inclusionary Housing Provisions Contained in the Newport Beach Municipal Code (PA2013 -221) ABSTRACT An amendment to the Municipal Code repealing Chapter 19.54 (Inclusionary Housing) in conformance with the current 2014 -2021 Housing Element of the General Plan, which no longer includes an Inclusionary Housing Program. RECOMMENDATION Introduce Ordinance No. 2013?$ (Attachment CC 1) Finding that all significant environmental concerns for the proposed project have been addressed in the previously adopted Negative Declaration SCH No. 2011091088; and 2. Approving Code Amendment No. CA2013 -008 to repeal Chapter 19.54 of the Municipal Code and pass to second reading on December 10, 2013. FUNDING REQUIREMENTS The repeal of Chapter 19.54 would result in the City no longer collecting in -lieu affordable housing fees from new residential subdivision projects. The current Affordable Housing Fund balance is approximately $2.3 million. Staff will work with the Affordable Housing Task Force in the first quarter of 2014 to develop a Request for Proposals (RFP) for expenditure of the funds. I Repeal of Inclusionary Housing Ordinance November 26, 2013 Page 2 Background On September 24, 2013, the City Council adopted the 2014 -2021 Housing Element, which included the elimination of the Inclusionary Housing Program (formerly Housing Program 2.2.1) on the basis that the Regional Housing Needs Assessment (RHNA) assigned to the City had been significantly reduced to a total projected housing need of five units. The City has also pursued other programs to help facilitate the development of the City's existing and projected housing needs, such as the adoption of Residential Development Overlay standards in the Newport Place Planned Community District of the Airport Area, promotion of density bonuses, and promotion of senior accessory dwelling units. Lastly, the City is projected to have an Affordable Housing Fund balance of approximately $4.34 million by fiscal year 2014, from previously approved projects. This fund will assist with the production, rehabilitation, or preservation of affordable housing during the upcoming planning period. Chapter 19.54 of the Municipal Code implemented the City's Inclusionary Housing Program, and on September 24, 2013, the Council directed staff to repeal Chapter 19.54 (Inclusionary Housing) from the Municipal Code. The attached draft ordinance repeals Chapter 19.54 and clarifies that any residential development project approved after the date of adoption of the 2014 -2021 Housing Element would not be subject to inclusionary housing requirements. Status of Previously Approved Projects Prior to September 24, 2013, the City approved a number of residential development projects on the condition that the project provide an affordable housing component, either through the production of units or the payment of in -lieu housing fees. Some of these projects have yet to be constructed. The attached ordinance clarifies that these projects will be required to fulfill their affordable housing obligations. 2 Repeal of Inclusionary Housing Ordinance November 26, 2013 Page 3 ENVIRONMENTAL REVIEW: All significant environmental concerns for the proposed project have been addressed in a previously adopted Negative Declaration (ND) SCH No. 2011091088 for the 2008 -2014 Housing Element Update and used for the 2014 -2021 Housing Element Update. 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, and related goals, policies, and programs, 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. The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). Notice has also been emailed to all parties on the City's Housing Interest List. Submitted by: 7 Y z1 .O. Director ATTACHMENTS CC 1 Draft Ordinance repealing Chapter 19.54 3 4 Attachment No. CC 1 Draft Ordinance 5 0 ORDINANCE NO. 2013- AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH REPEALING CHAPTER 19.54 (INCLUSIONARY HOUSING) OF TITLE 19 OF THE NEWPORT BEACH MUNICIPAL CODE WHEREAS, the City of Newport Beach ( "City ") is a charter city, governed by a charter adopted by the citizens of the City; and WHEREAS, it is a public purpose of the City and a policy of the State to achieve a diverse and balanced community with housing available for households of all income levels; and WHEREAS, the Regional Housing Needs Assessment (RHNA) assigned to the City is a total projected housing need of five units for the 2014 -2021 Planning Period; and WHEREAS, the City has pursued other programs to help facilitate the development of the City's existing and projected housing needs, such as the adoption of Residential Development Overlay standards in the Newport Place Planned Community District of the Airport Area, promotion of density bonuses, and senior accessory dwelling ,units; and WHEREAS, the City is projected to have an in -lieu fund balance of $4.34 million by fiscal year 2014, from previously approved projects subject to the inclusionary housing requirements of Chapter 19.54, and this fund will assist with the production, rehabilitation, or preservation of affordable housing during the upcoming planning period; and WHEREAS, on September 24, 2013, the City Council adopted the 2014 -2021 Housing Element Update, which included the removal of the Inclusionary Housing Program (formally HP2.2.1); and WHEREAS, the City Council finds it necessary at this time to repeal Chapter 19.54 Inclusionary Housing from the Municipal Code so that projects approved after September 24, 2013, would not be subject to an inclusionary housing requirement; and WHEREAS, notice of this hearing was made by posting the Council Agenda on the City's official notice bulletin board and posting the agenda and report on the City's Website. Notice of the time and place of the hearing, including the address where the information could be reviewed, and was also posted on the City's official notice bulletin board not less than 14 days prior to the hearing. In addition, an e-mail notification of this meeting was sent to all interested parties on the City's Housing Interest List. 7 NOW THEREFORE, the City Council of the City of Newport Beach, California, hereby ordains as follows: SECTION 1: Chapter 19.54 of the Newport Beach Municipal Code is hereby repealed. All other provisions of Title 19 of the Newport Beach Municipal Code shall remain unchanged. SECTION 2: Residential development projects with an Affordable Housing Implementation Plan approved or amended prior to September 24, 2013, shall be required to fulfill their affordable housing obligations pursuant to the provisions of the former Inclusionary Housing Program HP2.2.1 of the 2006 -2014 Housing Element of the General Plan and /or Chapter 19.54 of the Municipal Code that were in effect prior to the adoption of the 2014 -2021 Housing Element. SECTION 3: Residential subdivision projects for new residential subdivisions that were approved prior to September 24, 2013, shall be required to fulfill their affordable housing obligations pursuant to the provisions of the former Inclusionary Housing Program HP2.2.1 of the 2006 -2014 Housing Element of the General Plan and /or Chapter 19.54 of the Municipal Code that were in effect prior to the adoption of the 2014 -2021 Housing Element. SECTION 4: For projects listed in Section 2 and Section 3 above that are permitted to fulfill their affordable housing obligations through the payment of in -lieu housing fees, the amount of said fee shall take into account the automatic annual adjustments based on the percent change in new home prices in Orange County as published in the Real Estate Research Council report. As of the date of this ordinance the current in -lieu housing fee is $22,359 per market rate unit. SECTION 5: If any section, subsection, sentence, clause or phrase of this ordinance is, for any reason, held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this ordinance. The City Council hereby declares that it would have passed this ordinance, and each section, subsection, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses and phrases be declared unconstitutional. SECTION 6: All significant environmental concerns for the proposed project have been addressed in a previously adopted Negative Declaration (ND) SCH No. 2011091088 for the 2008 -2014 Housing Element Update and used for the 2014 -2021 Housing Element Update. 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, and related goals, policies, and programs, 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; and I SECTION 7: The Mayor shall sign and the City Clerk shall attest to the passage of this Ordinance. This Ordinance shall be published once in the official newspaper of the City, and the same shall become effective thirty (30) days after the date of its adoption. SECTION 8: This Ordinance was introduced at a regular meeting of the City Council of the City of Newport Beach held on the 26th day of November, 2013, and adopted on the 10th day of December, 2013, by the following vote, to wit: AYES, COUNCIL MEMBERS NOES, COUNCIL MEMB ABSENT, COUNCIL MEMBERS tld MG Keith Curry ATTEST: Leilani Brown, City Clerk APPROVED AS TO FORM, OF -FIC - OF CITY ATTORNEY: Aaron Harp, City Attorney I