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HomeMy WebLinkAbout20210120_HEUAC_Minutes_ApprovedCITY OF NEWPORT BEACH HOUSING ELEMENT UPDATE ADVISORY COMMITTEE MINUTES ZOOM MEETING, NEWPORT BEACH, CA WEDNESDAY, JANUARY 20, 2021 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, Elizabeth Kiley, Geoffrey LePlastrier, Stephen Sandland, Debbie Stevens, (Ex Officio Member) Will O’Neill MEMBERS ABSENT: Paul Fruchbom 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 None IV. CONSENT CALENDAR a. Minutes of the December 2, 2020 Meeting Recommended Action: Approve and file the minutes of December 2, 2020. Committee Member Sandland moved, seconded by Committee Member DeSantis to approve the minutes of the December 2, 2020 meeting as presented. AYE: Tucker, Bloom, DeSantis, Kiley, LePlastrier, Sandland, Selich, Stevens NO: None ABSTAIN: None ABSENT: Fruchbom V. CURRENT BUSINESS a. Subcommittee Progress Reports Recommended Action: Receive verbal updates from each subcommittee, as appropriate. In answer to Chair Tucker's inquiry, Senior Planner Ben Zdeba advised that the update of parcel numbers for the map of the remainder of town and information for the 65 decibel (dB) Community Noise Equivalent Level (CNEL) subcommittee hopefully will be ready on January 21, 2021. Chair Tucker indicated that he will finalize reports for the Airport Area, the Hoag industrial area, and the remainder of town and ask staff to attach them to an agenda. Committee Member Sandland Housing Element Update Advisory Committee Meeting January 20, 2021 Page 2 of 6 will report regarding the safety zones and the noise contour of the 65 dB CNEL area later in the meeting, and the Housing Element Update Advisory Committee (HEUAC) will review sites in the 65 dB CNEL at the next meeting. In response to Committee Member Stevens' inquiry, Committee Member Sandland stated there are approximately 200 properties in the 65 dB CNEL area. b. Housing Element Update Progress Documents Recommended Action: Discuss, receive, and file. Chair Tucker recalled that committee members did not have sufficient time to review the voluminous Community Profile and Review of Past Performance documents provided for the December 2, 2020 meeting. Consequently, he had requested this agenda item for committee members to provide comments and ask questions. c. Update on Property Owner Responses Recommended Action: Receive an update from staff on the progress being made with receiving responses from property owners of properties identified as either “potentially feasible” or “feasible.” Chair Tucker recalled the HEUAC's desire to learn of property owners' interest in redeveloping their properties prior to discussing the suitability of properties for redevelopment. Deputy Community Development Director Jim Campbell reported that the letter attached to the staff report was sent to several hundred property owners and some owners of mobile homes. Staff has received many calls and some emails from owners. Senior Planner Zdeba advised that he informs mobile homeowners who respond to the letter about the Newport Together website to be involved in the process. Staff sent the letter to about 500 people, including mobile homeowners. Of note, Tait has expressed interest in redeveloping the Coyote Canyon landfill site. Some property owners have indicated no interest in redeveloping their properties. Staff does not attempt to change the property owners' minds but ensures they understand the process and the opportunities. Staff has received mixed interest from property owners in the Airport Area, Newport Center, Corporate Plaza, and the Dover Westcliff area. Staff is compiling the responses in a spreadsheet. In reply to Chair Tucker's inquiry, Senior Planner Zdeba estimated 50-75 property owners and mobile homeowners have responded to the letter. Deputy Community Development Director Campbell indicated that he has scheduled a meeting with Tait Engineering to discuss preliminary concept plans and densities for the Coyote Canyon site. The County of Orange (County), the landfill property owner, submitted a letter expressing support for the effort. Russ Fluter, who owns the Palisades Tennis Club site and several properties in Mariners' Mile, has expressed interest in redevelopment and offered to contact the Hyatt Regency about the adjacent golf course. Owners of some of the mobile home parks on 15th Street are interested in increased density. The owners of Banning Ranch continue to discuss the possibility of public acquisition of Banning Ranch for open space. If that does not occur, the owners will probably be interested in a project. Property owners in Cannery Village have responded to the letter. While the lots in Cannery Village are small, they can accommodate at least one or two Housing Element Update Advisory Committee Meeting January 20, 2021 Page 3 of 6 residential units. The consultant will use the spreadsheet of property owners' responses in their analysis of all sites to produce a draft list for the HEUAC in February. In answer to Chair Tucker's questions, Deputy Community Development Director Campbell related that staff can send follow-up letters to property owners who have not responded and whose properties can accommodate a significant number of units. For the February 17, 2021 meeting, staff can provide a list of acreages based on parcel sizes and propose some densities for discussion purposes. Based on Tait's representations, the 32-acre site at Coyote Canyon is technically neither a landfill nor habitat area. Staff is attempting to confirm that it is not included in a Natural Community Conservation Plan (NCCP) / Habitat Conservation Plan. In reply to Committee Member Sandland's and Chair Tucker's questions, Deputy Community Development Director Campbell stated he will contact Newport-Mesa Unified School District (NMUSD) about its property adjacent to Banning Ranch. Most of the NMUSD property is located within the city limits. A letter was not sent to Hoag Hospital, but staff will contact Hoag immediately. Senior Planner Zdeba clarified that letters were sent to NMUSD and Hoag Hospital. Council Member O'Neill requested staff notify him of the date of the HEUAC's discussion of the Coyote Canyon site as he needs to ensure community members are aware of the discussion. In response to Chair Tucker's inquiry, Deputy Community Development Director Campbell explained that staff intends to submit a draft sites inventory with a progress draft of the Housing Element to the California Department of Housing and Community Development (HCD) in mid-May. David Barquist, Kimley-Horn and Associates, reported the submission needs to contain all requisite documents and analyses and should contain the majority of the City's policy direction. In reply to Committee Member DeSantis' query, Deputy Community Development Director Campbell indicated a letter was sent to the owners of the Newport Beach Golf Course, and they have expressed interest in redeveloping the golf course for housing, particularly the portion located south of Irvine Avenue. If the site is deemed suitable, its priority may be lower because of its proximity to John Wayne Airport (JWA). Dorothy Kraus requested the name of the entity that has expressed interest in developing Banning Ranch and notification of discussions with Newport Banning Ranch (NBR) regarding a possible project. Community Development Director Seimone Jurjis clarified that staff is actively discussing some level of development on the property with its owner, Newport Banning Ranch, LLC, as a backup plan if public acquisition of the property does not occur. Nancy Scarbrough noted the Banning Ranch and Coyote Canyon sites are located in the county and inquired regarding the City or the County counting any housing units developed on the sites toward the Regional Housing Needs Assessment (RHNA) numbers. Chair Tucker believed the County owns the Coyote Canyon site, but it is in the city. The Banning Ranch site is located almost entirely in the county. Deputy Community Development Director Campbell clarified that housing on the portion of the Banning Ranch site located in the city can be counted toward the City's RHNA. If the City annexes the remainder of the site, the City and the County will negotiate RHNA issues. Housing Element Update Advisory Committee Meeting January 20, 2021 Page 4 of 6 In answer to Chair Tucker's queries, Deputy Community Development Director Campbell explained that in order to count housing approved for the Banning Ranch site, the City has to show substantial evidence that the housing will be built during the planning cycle. Given the Coastal Commission's oversight of the site and annexation issues, convincing HCD that housing will be built may be difficult. If the number of sites for housing is limited, development of the Banning Ranch site may have to be considered. The City, Newport Banning Ranch, and the Coastal Commission are discussing possible development of the least environmentally constrained portion of the site. He indicated he has not received a response from the Irvine Company, but the Irvine Company may have responded to Community Development Director Jurjis or the Mayor. Council Member O'Neill advised that the Irvine Company contacted the City Manager, who requested the Irvine Company respond in writing. d. Affordable Housing Subcommittee Memorandum Recommended Action: Discuss the draft memorandum and receive comments from the Committee and the public. Chair Tucker reported affordable housing is a very complicated issue. Virtually all affordable housing projects are tied to 9% tax credits, which are allocated to each state on a per capita basis. Each state allocates the tax credits to projects. Affordable housing projects compete for a limited number of tax credits and typically seek multiple funding sources. Generally, a subsidy or incentive offsets the reduced rent charged for an affordable unit. There are currently two federal programs and one State program. Inclusionary housing ordinances are cities' efforts to encourage affordable housing projects through granting entitlements, waiving fees, and/or altering development standards. For an affordable housing project to be financially viable, the land cost has to be very low. The no net loss law requires a jurisdiction to account for affordable units that are listed on an approved sites inventory but not built as listed. The report contains policies and potential strategy alternatives for the Council's and public's consideration. HCD has determined that 68% of the accessory dwelling units (ADU) projected for the planning cycle may be credited toward the City's lower-income RHNA number. The City will have to achieve a performance metric for construction of ADUs or face repercussions. Principal Planner Jaime Murillo advised that since 2018, 78 ADU applications have been approved or are under review, which is approximately 25 ADUs per year. Over the next eight-year cycle, the projection is about 200 ADUs. The projection will have to be supported by a policy that aggressively promotes and incentivizes ADUs. Ultimately, HCD will want the City to commit to a monitoring program and provide a backup plan if it fails to meet estimates for ADUs. HCD will accept some assumed affordability rates for ADUs. Chair Tucker remarked that if the City seeks a higher number of ADUs, it will need to implement a program to promote ADUs. Some residents may be unhappy with the program if a neighbor constructs an ADU such that it obstructs the light and air on their property. Committee Member Kiley noted the projection of 25 ADUs per year does not consider the State law that eliminates most restrictions on ADU construction. Principal Planner Murillo explained that staff is debating the impact of the law on the number of ADUs with HCD. The number of ADU applications was small in 2018, increased in 2019, and was quite large in 2020. Staff has considered using the trend to exponentially increase the projection for ADUs. If the projection is aggressively large, HCD will probably require monitoring and support for the projection. Housing Element Update Advisory Committee Meeting January 20, 2021 Page 5 of 6 Committee Member Stevens appreciated the affordable housing report because it simplifies a complex issue. In response to her inquiry, Chair Tucker related that the total amount of 9% tax credits is negotiated through Congress. Federal and state governments place regulations on the use of the tax credits. Committee Member Bloom related that Amazon recently announced a $560 million investment in the preservation and protection of 2,300 units in the Seattle area. That is a subsidy of approximately $243,000 per unit and demonstrates the magnitude of subsidies required for affordable housing. Council Member O'Neill stated the City's RHNA for very-low-income units is 1,451. Using a loss of value of $494,000 per unit, constructing the RHNA requirement will require almost $717 million in subsidies. Chair Tucker clarified that the loss of value analysis in the report does not include the value enhancement of the City granting entitlements for projects. A loss of value analysis is nuanced and needs to be conducted for each project. The relevant point is that there is a limit to the number of affordable units a project can provide and remain financially viable. Hoiyin Ip remarked that some residents may not appreciate having a 100% affordable housing project in their neighborhood. The California Energy Commission is hosting a conference about sustainable affordable housing, and one of the topics is funding. Chair Tucker clarified that 100% affordable housing projects and projects with a mix of housing individually do not provide a large number of affordable units. In order to achieve the number of affordable units in the RHNA, the City will need many market-rate units to subsidize the affordable units. In answer to Committee Member DeSantis' inquiry, Principal Planner Murillo indicated a property owner related to him a cost of around $80,000 to convert a garage to an ADU. New construction could cost as much as $200,000-$300,000. Mr. Barquist advised that an estimate of $10,000 for an ADU conversion is extremely low. e. Update Schedule Moving Forward Recommended Action: Receive an overview of the schedule moving forward and discuss, as necessary. Deputy Community Development Director Campbell reported on February 17, 2021, the HEUAC will begin the policy discussion. A virtual public workshop is scheduled for February 24. Staff will present a draft Housing Element Update to the HEUAC on March 17, the public on March 22, the Planning Commission on April 7, and the Council on April 27. Once HCD provides its comments on the progress draft, staff can schedule additional meetings. In response to Chair Tucker's questions, Deputy Community Development Director Campbell advised that the February 17 sites analysis discussion will begin with entitled projects that are eligible for the Housing Element Update and a placeholder for ADUs and move to sites that can provide units to fill the gap between the RHNA requirement and the number of units provided by entitled projects and ADUs. The discussion will include property owner interest, densities, and constraints. The progress draft needs to correlate policies and the availability of sites. HCD may have difficulty understanding the breadth of housing policies if the sites inventory is not part of the progress draft. The sites inventory will be refined over the summer. Also on February 17, staff will present an initial narrative and outline of the project description for the Environmental Impact Report (EIR). Housing Element Update Advisory Committee Meeting January 20, 2021 Page 6 of 6 Chair Tucker recommended scheduling an HEUAC meeting on March 3, 2021 to continue discussion of the sites inventory and obtain additional public feedback. Committee Member Sandland suggested moving discussion of the 65 dB CNEL area, including safety zones and the contour, to February 3 to provide more time for the sites analysis discussion on February 17. In reply to Committee Member Stevens' question, Principal Planner Murillo reported the City's appeal of Santa Ana's RHNA allocation was heard and denied on Friday. The City's appeal of its RHNA allocation was heard and denied on January 19. Of the many appeals filed, the County of Riverside's appeal is the only one to be granted thus far, and it may result in a small increase in the City's allocation. The Southern California Association of Governments (SCAG) has not yet determined if it will litigate the State's regional allocations. Committee Member Kiley suggested discussions with the Irvine Company about further development of Newport Center should be a priority. Deputy Community Development Director Campbell indicated receipt of the Irvine Company's letter, depending on its content, will open discussions between the Mayor, Community Development Director Jurjis, or Deputy Community Development Director Campbell and the Irvine Company's executive management. Council Member O'Neill clarified that the Irvine Company's communication with the City Manager appears to indicate the Irvine Company does not intend to engage significantly in a discussion of the City's RHNA allocation. Consequently, the City Manager requested a written response. Committee Member DeSantis requested an update regarding housing legislation that takes effect in 2021 and requested staff update and provide the memorandum of housing legislation prepared for the General Plan Update Steering Committee. Deputy Community Development Director Campbell advised that staff will explore updating the housing legislation memorandum. An update regarding recent legislation can be scheduled for a future meeting. Chair Tucker preferred a legislative update focus on legislation that affects site selection and the sites inventory. VI. ADJOURNMENT – 7:49 p.m. Next Meeting: February 3, 2021, 6:00 p.m. via Zoom.