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HomeMy WebLinkAbout20201007_HEUAC_Minutes_ApprovedCITY OF NEWPORT BEACH HOUSING ELEMENT UPDATE ADVISORY COMMITTEE MINUTES CITY COUNCIL CHAMBERS – 100 CIVIC CENTER DRIVE WEDNESDAY, OCTOBER 7, 2020 REGULAR MEETING – 6 P.M. I. CALL MEETING TO ORDER – 6 p.m. II. WELCOME AND ROLL CALL MEMBERS PRESENT: Chair Larry Tucker, Jeffrey Bloom, Susan DeSantis, Paul Fruchbom (remote), Geoffrey LePlastrier, Stephen Sandland, Ed Selich, Debbie Stevens MEMBERS ABSENT: Elizabeth Kiley (excused), (Ex Officio Member) Will O’Neill Staff Present: Community Development Director Seimone Jurjis, Deputy Community Development Director Jim Campbell, Principal Planner Jaime Murillo, Senior Planner Ben Zdeba, Administrative Support Specialist Clarivel Rodriguez III. PUBLIC COMMENTS ON NON-AGENDA ITEMS Jim Mosher noted the City Council has amended the General Plan and approved a development agreement for a developer to build housing that does not require low-income or very-low income units on property adjacent to the Airport. Allowing all developers to do this would result in the need to find locations for up to 49,000 units to achieve quotas for affordable housing. Nancy Scarbrough commented that the Circulation Element had been delegated to the Planning Commission without a Council vote or public awareness. She wanted to know when and where that decision was made and whether staff or consultants have begun work on updating the Circulation Element. IV. CONSENT CALENDAR a. Minutes of the September 2, 2020 Recommended Action: Approve and file the minutes of September 2, 2020 Chair Tucker indicated Mr. Mosher has provided a minor correction. Chair Tucker moved, seconded by Committee Member Selich, to approve the minutes of the September 2, 2020 meeting as presented. AYE: Tucker, Bloom, DeSantis, LePlastrier, Sandland, Selich, Stevens NO: None ABSTAIN: Fruchbom ABSENT: Kiley Housing Element Update Advisory Committee Meeting October 7, 2020 Page 2 of 8 V. CURRENT BUSINESS a. Subcommittee Progress Reports Recommended Action: Receive verbal progress reports from all subcommittees and discuss as necessary. Chair Tucker reported the sites subcommittees for the Airport Area and West Newport Mesa have completed their reviews, and staff has posted the subcommittees' notes to the website. The site subcommittee for the remainder of the City is awaiting information from staff. The goal is to have the subcommittee's review complete and its notes posted prior to the next HEUAC meeting and the workshop. Senior Planner Ben Zdeba advised that the information should be available for the subcommittee the following week. Chair Tucker explained that the sites subcommittees graded each site as feasible, potentially feasible, or infeasible. Feasible sites have physical characteristics that may allow housing development. Infeasible sites appear not to have the ability to accommodate housing. Potentially feasible sites may accommodate housing, but the subcommittee could not make a determination based upon current information. After public input, the HEUAC will decide if a parcel is suitable for housing. Committee Member Sandland requested staff maintain a tabulation of the number of acres and potential units the sites could generate in each category. Deputy Community Development Director Jim Campbell advised that staff will maintain a tabulation of the acreage of the sites and could provide a range of densities or unit yields at different densities. In response to Deputy Community Development Director Campbell's query, Chair Tucker explained that the HEUAC should determine sites are suitable for housing prior to staff contacting the property owners. The subcommittees have no decision-making authority. Deputy Community Development Director Campbell expressed concern because the HEUAC would receive public input prior to making a decision, and public input would occur over a number of months. Staff should contact property owners sooner rather than later to learn of their interest in building housing on their properties. In addition, staff should probably contact more property owners than the HEUAC identifies in order to gather additional information about sites. Chair Tucker expected the workshops to provide public input regarding the sites that could accommodate housing. The October 20, 2020 workshop could provide input for the HEUAC to consider in its October 21 meeting. The HEUAC will review sites in the Airport Area and West Newport Mesa on October 21 and the rest of the City on November 4. By November 4, the HEUAC should have enough input for staff to begin contacting property owners. Deputy Community Development Director Campbell did not believe the October 20 workshop would consider specific sites; therefore, the HEUAC would not have public input regarding specific sites for its October 21 meeting. Jim Mosher requested a more logical numbering system for the parcels and suggested the HEUAC webpage contain a list of subcommittees, subcommittee members, and the task of each subcommittee. Chair Tucker related that the numbering system was provided to the subcommittee, and the subcommittee did not change it. Housing Element Update Advisory Committee Meeting October 7, 2020 Page 3 of 8 Deputy Community Development Director Campbell indicated the webpage could be updated to include a list of subcommittees. Dorothy Kraus remarked that the lack of a response to Ms. Scarbrough’s comments about the Circulation Element leaves an unsettling feeling. She inquired about the rationale for deeming the Road and Track building as infeasible when the underlying zoning for the parcel is residential. Chair Tucker explained that he made a recommendation to staff and the Mayor that the Planning Commission update the Circulation Element as it has experience with traffic matters and HEUAC members do not. He was not privy to how the decision occurred. Committee Member Selich advised that the subcommittee was informed that the Road and Track building is undergoing remodeling for a private school's educational offices. With the school's investment in the building, the subcommittee felt it was infeasible for housing. In addition, a major portion of the parking lot for the building is in the public right-of-way for the extension of 15th Street. Deputy Community Development Director Campbell reported several years ago the Hearing Officer granted an extension of the nonconforming office use for Kobe's project at the Road and Track site. Pacifica Christian School is making similar investments and extending that nonconforming privilege. Changing zoning on the site from residential to commercial would require a General Plan Amendment. Also, the shape and size of the parcel makes a residential development on the site challenging. In order to include the site in the Housing Element Update, the City needs reasonable evidence that the site could change land uses during the planning period. Chair Tucker appreciated Ms. Kraus' input as the type of input the HEUAC wants to receive. b. Strategy for Public Input on Sites Recommended Action: Discuss and provide direction on how to best seek public input on the housing opportunity sites inventory. Chair Tucker wanted to receive quality input regarding the suitability of sites listed in the subcommittees' notes. Following the October 20 workshop, the HEUAC will review feasible and potentially feasible sites, hear public input provided at the workshop, and determine sites suitable for housing. HEUAC review of sites in the Airport Area and West Newport Mesa will be scheduled for October 21, and sites in the remainder of the City will be scheduled for November 4. In response to Chair Tucker's question, David Barquist, Kimley-Horn and Associates, advised that the City has the right to adopt a Housing Element as it sees fit, but the City has to abide by State law. If the City adopts a Housing Element that does not comply with statutory requirements, the State will not certify the Housing Element. There are some challenges to self-certifying a Housing Element. In his opinion, the community's desires and statutory requirements should be considered equally. Chair Tucker understood penalty provisions contained in recent legislation apply pressure on cities to achieve their RHNA allocations. Mr. Barquist could provide the HEUAC with relevant legislation. Chair Tucker did not want the public to participate in the engagement process and then feel as though the HEUAC ignored its input. He read the Code section regarding public participation. Housing Element Update Advisory Committee Meeting October 7, 2020 Page 4 of 8 c. Outreach Plan Update Recommended Action: Receive an overview of the outreach plan efforts, including information on the schedule moving forward and the upcoming October 20 virtual workshop and the November 16 virtual workshop for the Circulation Element Update. Mr. Barquist reviewed opportunities for community engagement, which include digital engagement, committee/advisory meetings, in-person or virtual workshops, online video presentations, and webinars. The first community workshop is scheduled for October 20, 2020, will be held online, and will be interactive without a presentation. Engagement opportunities will be available through the website and HEUAC meetings Senior Planner Zdeba related that 36 people have registered via Zoom for the October 20 workshop. The community was notified of the workshop through email blasts and Nextdoor posts. The community may register for the workshop on the website. A Circulation Element kickoff workshop is scheduled for November 16, 2020. In response to Committee Member DeSantis' inquiries, Mr. Barquist emphasized the interactive nature of the October 20 workshop. The workshop will include lessons learned from prior outreach efforts, the context for RHNA, a series of activities, and next steps. Scenario building or modeling with different densities will occur after the October workshop. Vehicle miles traveled (VMT) and circulation will be part of the analysis. Mitigation measures for VMT impacts and many other topics will be part of community education. In answer to Committee Member Stevens' question, Mr. Barquist stated the Lego exercise will not be repeated as staff has clearly directed the consultant team not to repeat activities. The workshop will focus on locations within areas of the City. Chair Tucker remarked that if the HEUAC cannot achieve the RHNA allocation during the update process, sites will be selected based on their ability to provide housing units, which is not a good planning method. Committee Member DeSantis referred to a letter from Olen Properties. Visioning is not reviewing individual sites but preparing a realistic model for an area based on available sites and the development community's input regarding feasibility. In reply to Committee Member Selich’s query, Mr. Barquist explained that during the workshop, participants can respond to polls and share their ideas. Jim Mosher hoped the workshop will have some form. He expressed concern about having to provide information to Zoom in order to register for the workshop. He inquired whether workshops would be recorded and posted on the website. He requested clarification of the Circulation Element workshop and the center column of the chart for outreach opportunities. Charles Klobe commented that without State and Federal subsidies, the City will not find enough sites to accommodate 49,000 housing units, which will include the required number of affordable housing units. The HEUAC should decide it will submit an incomplete Housing Element. He suggested staff reach out to coastal cities in the same position as Newport Beach and develop a regional coalition to approach the State. Housing Element Update Advisory Committee Meeting October 7, 2020 Page 5 of 8 Dorothy Kraus expressed confusion regarding the role of the outreach subcommittee in obtaining public input on sites. The HEUAC seems to be glossing over Committee Member DeSantis’ comments regarding visioning. The Outreach Plan and the websites are confusing and do not relate to each other. Chair Tucker advised that Committee Members DeSantis and Stevens form the outreach subcommittee. They coordinate the outreach program with staff and consultants in order to obtain meaningful public input. The City can fight its RHNA allocation or update the Housing Element to achieve the allocation. If individuals feel the City should fight the allocation, they should address the City Council. Deputy Community Development Director Campbell indicated the workshops will be recorded and posted on the website. A detailed script or agenda of the workshop is not ready for publication. Zoom registration requires a name and email address. Staff will update the City Council on October 13, 2020, but currently no other meetings with the Planning Commission or City Council have been scheduled. Chair Tucker requested the workshop script be provided to the outreach subcommittee for comment. The affordable housing subcommittee is awaiting information from Principal Planner Jaime Murillo. Committee Member DeSantis noted Orange County has a housing trust fund, and cities may create a local fund to subsidize housing units. Senior Planner Zdeba explained that the Circulation Element webinar is listed at the top of the chart. In response to Committee Member Sandland’s question, Deputy Community Development Director Campbell clarified that workshops and webinars will allow the community to participate through chat and polling features. Chair Tucker recommended the workshop include an announcement of the HEUAC’s schedule for reviewing sites in the Airport Area, West Newport Mesa, and the remainder of the City. d. Affordable Housing Compliance Recommended Action: Receive an overview of what “affordable housing” means in the context of Orange County, as well as the new affordable housing requirements related to the housing opportunity sites inventory. Discuss strategies for compliance. Mr. Barquist defined affordability as the ability to pay based on income and housing cost. Affordability is based on median family income (MFI), which is calculated by the Department of Housing and Urban Development (HUD) for each county. Orange County's MFI of $103,000 is high in comparison to many counties in the state. RHNA assumes a family of four individuals. The Housing Element is required to identify sites by income category. Affordability for a site is generally based upon the density allowed for the site. According to the State, 30 dwelling units per acre is the default density for affordable units. Sites can accommodate more than one income category. The Department of Housing and Community Development (HCD) recommends a 15-30 percent buffer for additional dwellings to cover no net loss. Housing Element Update Advisory Committee Meeting October 7, 2020 Page 6 of 8 In reply to Committee Member Selich’s questions, Mr. Barquist indicated the City would have to find sites to accommodate affordable housing that a developer does not build on a site designated for affordable housing. Staff will track affordable housing sites and construction of affordable housing. A subsidy could be a policy solution for construction of affordable housing. Chair Tucker advised that most sites in Newport Beach are non-vacant, which is required for housing in the lower-income range. Therefore, the substantial evidence rule will come into effect. In answer to Chair Tucker's query, Mr. Barquist explained that different strategies and methods can encourage property owners to redevelop their land. Committee Member Selich remarked that the City cannot provide enough incentives, fee reductions, or bonus programs to make up the deficit of constructing affordable housing. Committee Member Fruchbom related that coastal cities have the most difficulty providing affordable housing because their rents are higher than countywide rents, on which RHNA requirements are based. He calculated a developer's loss in constructing a hypothetical one- bedroom apartment unit at 50-60 percent AMI in Huntington Beach and in Newport Beach. According to his very rough estimation, a bond measure levying $6,000 on every man, woman, and child in Newport Beach could provide funding for affordable housing. Theoretically, it is possible for tax credits and cheap land to fill a developer's deficit, but the demand for tax credits is immense. The City could offer increased density in exchange for affordable units. In the past, he surveyed the City for sites that could accommodate a development with affordable housing and found only one site, City-owned land near the maintenance yard. Chair Tucker questioned whether the State would accept a Housing Element that utilizes strategies to achieve affordable housing allocations, regardless of the success of the strategies. Committee Member Selich expressed concern regarding the no net loss requirement. Chair Tucker suggested the no net loss requirement will have to be covered through an overlay that requires affordable housing as part of a residential development. In response to Committee Member DeSantis’ inquiry, Mr. Barquist stated the City could use in-lieu fees to construct affordable housing in other cities. Committee Member DeSantis noted UCI has a fund for silent second mortgages on affordable housing. The City of Livermore and the County of Marin are subsidizing mortgages to attract residents. Chair Tucker added that UCI is subsidizing affordable housing located on UCI's property. He questioned whether the State would accept affordable housing built in another city. Mr. Barquist clarified that the Housing Element contains courses of actions that should achieve the RHNA allocation. The specific details of those actions do not have to be included in the Housing Element. To obtain affordable housing, the City could provide incentives or streamline permitting for accessory dwelling units (ADU), increase densities, create affordable overlay zones, promote the preservation of existing affordable units, or promote the conversion of market-rate units to affordable units. In reply to Committee Member Sandland's questions, Mr. Barquist explained the City's ability to count affordable units when their affordable covenants, which are set to expire, are renewed. Deputy Community Development Director Campbell reported the current Housing Element Housing Element Update Advisory Committee Meeting October 7, 2020 Page 7 of 8 contains a list of project sites subject to affordable covenants. Staff has registered with the State to receive notice prior to the expiration of covenants. Theoretically, the City could negotiate with property owners to pay for an extension of the covenants. Staff has contacted property owners where the covenants were about to expire, and all property owners have rejected offers to extend the covenants. Senior Planner Zdeba indicated covenants on 12 properties will expire during the 2021-2029 planning cycle. In answer to Committee Member Selich's query, Mr. Barquist related that the no net loss requirement applies to the entire RHNA allocation. Chair Tucker commented that staff and consultants will provide the HEUAC with alternatives for affordable units. The HEUAC will likely consider an inclusionary fee. Mr. Barquist indicated HCD considers whether the Housing Element meets the spirit and intent of the law and substantially complies with the law. Staff can discuss potential programs and strategies with HCD prior to completing the Housing Element. Committee Member DeSantis suggested salaries for Newport Beach jobs should be prominent in the workshop discussion so that the community can relate to residents of affordable housing Jim Mosher suggested staff clarify the statement that HCD considers a density of 30 units per acre as suitable for affordable housing and the application of that density to the Newport Airport Village project. Deputy Community Development Director Campbell reported a site identified for affordable housing must have a density of 30 units per acre. He recommended the Housing Element reflect the number of affordable units proposed for the Newport Airport Village project rather than the maximum number of units that could be built on the site. His recommendation would apply to the Newport Crossings project and any remaining development in the Uptown Newport project. e. RHNA Appeal Filing-Council Item for October 13 Recommended Action: Receive and file. Chair Tucker remarked that the appeal lists retail commercial and industrial properties without describing economic constraints on converting those properties to residential uses. He has submitted language addressing that issue to staff. In determining the number of housing units needed, the State did not consider the availability of land for housing. Jim Mosher stated other cities will appeal their allocations and make arguments similar to Newport Beach's arguments. Deputy Community Development Director Campbell advised that a draft letter has been included in the meeting packet and will be presented to the City Council on Tuesday along with a request to authorize an appeal. The Southern California Association of Governments (SCAG) will convene its litigation committee, which could mean SCAG is considering litigation regarding RHNA. In answer to Committee Member DeSantis' query, Principal Planner Murillo reported the deadline to submit an appeal is October 26, 2020. A 45-day comment period will follow the deadline. Once the comment period expires, SCAG will hold hearings, which are estimated to last four to six weeks. Housing Element Update Advisory Committee Meeting October 7, 2020 Page 8 of 8 The appeal process is expected to conclude in late January or early February 2021. At that time, cities will have their final RHNA allocations. VI. COMMITTEE ANNOUNCEMENTS OR MATTERS WHICH MEMBERS WOULD LIKE PLACED ON A FUTURE AGENDA FOR DISCUSSION, ACTION OR REPORT (NON-DISCUSSION ITEM) Chair Tucker requested a presentation by the Kennedy Commission and a discussion of the appropriate time for staff to contact property owners about building housing on their properties. Committee Member DeSantis’ requested a presentation by Renaissance Housing, an affordable housing developer. Chair Tucker suggested that occur when the Affordable Housing Subcommittee has information to share. Committee Member Sandland requested Mr. Barquist provide an updated outreach schedule by October 21, 2020. VII. ADJOURNMENT – 8:23 p.m. Next Meeting: October 21, 2020, 6 p.m. in the City Council Chambers.