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HomeMy WebLinkAbout5b_1_Attachment 3 - Housing Opportunity Sites Inventory Methodology and Progress Draftkimley-horn.com 1100 Town & Country Road, Suite 700 | Orange, CA 92868 714.939.1030 MEMORANDUM To: Chair Tucker and the Housing Element Update Advisory Committee From: David Barquist, AICP Kimley Horn and Associates, Inc Date: February 12, 2021 Subject: Newport Beach Regional Housing Needs Assessment (RHNA) Sites Inventory This Memorandum provides a summary of potential scenarios to accommodate the City’s RHNA growth need. The Housing Element Update Advisory Committee’s initial identification of sites is utilized as a basis for the analysis contained herein. It should be noted that this analysis is for discussion purposes only and the methodology, unit data and other planning assumptions are subject to change. The intent of this Memorandum is to provide a summary of the RHNA Sites Inventory process and proposed strategies to meet the RHNA Allocation. RHNA ALLOCATION & SITES CRITERIA The City of Newport Beach 2021-2029 RHNA Allocation was determined by the Southern California Association of Governments (SCAG) and assigns an allocation of housing units, categorized by income category, that the City of Newport Beach (the City) must plan to accommodate during the 2021-2029 planning period. City of Newport Beach 2021-2029 RHNA Growth Need Allocations Income Category Affordability (1) Dwelling Units Very Low 0 – 50% County MFI 1,453 units Low 51 – 80% County MFI 928 units Moderate 81% - 120% County MFI 1,048 units Above Moderate >120% County MFI 1,405 units TOTAL 4,834 units Notes: (1) Based on percentage of Orange County Median Family Income (MFI), updated annually. The 2020 MFI for a four-person household is $103,000. HCD Criteria & Considerations for Sites Designated for Low and Very-Low Income Units Within the Sites Inventory Guidebook, HCD specifies additional criteria needed to support the identification of sites allocated to the lower income categories (very low and low): Housing Element Update Advisory Committee - February 17, 2021 Item No. V(b) - Attachment 3 Housing Opportunity Sites inventory Methodology and Progress Draft Page 2 kimley-horn.com 1100 Town & Country Road, Suite 700 | Orange, CA 92868 714.939.1030 • Zoning Appropriate to Accommodate Low and Very Low Income RHNA Allocation o City must demonstrate that the zoning of a parcel allows for development at the default density (differs based on a jurisdiction’s size and characteristics). ▪ The default density for the City of Newport Beach is 30 dwelling units per acre (du/ac). o The City can attempt justify the inclusion of parcels below the default density with additional justification, such as experience developing affordable housing projects at lower densities. • Size of Sites o Based on statewide affordable housing development history, HCD has established sizing criteria for sites allocated to accommodate the lower income categories. o The size of these parcels should be larger than 0.5 acres and less than 10 acres ▪ If parcels fall outside this range, additional justification must be provided, such as successful development history on sites outside the size criteria. • Affirmatively Furthering Fair Housing Requirements o Pursuant to Gov. Code 65583(c)(10)(A), The City must evaluate future housing sites in consideration of fair and equitable distribution of housing affordability throughout the community. • No-Net-Loss Law (SB166) o Requires that at all times throughout the planning period, the sites inventory must maintain adequate sites to meet the remaining unmet housing needs for each income category. o A jurisdiction is required to identify additional sites if it approves a project at different income levels or densities than shown in the inventory. o A buffer of housing capacity helps avoid no net loss implications. SITES ANALYSIS BASELINE The first step in the sites analysis process is to understand the portion of the RHNA Allocation that can be accommodated by Accessory Dwelling Units (ADUs), by projects that are already in the planning process (pipeline projects), and by sites that have existing capacity and propensity to redevelop within the densities set by existing zoning code. These three categories establish the Sites Analysis Baseline (the sites the City can list in the inventory without additional programs, policies, or rezones). By netting out the Baseline from the RHNA Allocation, the City can understand the remaining units they must plan to accommodate with redevelopment strategies. Accessory Dwelling Units The following is a summary of ADU features as they relate to the RHNA Allocation and Sites inventory: • ADUs can be used to accommodate RHNA Growth need • ADUs can be considered a supplementary method to accommodate future growth in combination with other land use strategies • New State Law allows ADU development as a matter of right in residential zones • HCD has acceptable safe harbor methodologies to determine total ADU potential • HCD has prepared a Guidebook, describing acceptable methodologies and approaches for using ADUs to accommodate RHNA need Housing Element Update Advisory Committee - February 17, 2021 Item No. V(b) - Attachment 3 Housing Opportunity Sites inventory Methodology and Progress Draft Page 3 kimley-horn.com 1100 Town & Country Road, Suite 700 | Orange, CA 92868 714.939.1030 Safe Harbor Assumption: The City of Newport Beach can utilize HCD’s pre-certified methodology, which permits the City to utilize past ADU production to calculate future ADU production. This Safe Harbor assumption allows the City to utilize 2018-2020 past yearly production averages to accommodate future housing needs. Utilizing the Safe Harbor assumptions and the City’s 2018-2020 average annual production of 21.3 ADUs, ADU estimates by Income Category are show in the table below. Safe Harbor Assumption of ADU Production Income Category Percent Share of Estimated ADU Production Total ADUs Very Low 25% of total units 42 ADUs Low 43% of total units 73 ADUs Moderate 30% of total units 51 ADUs Above Moderate 7% of total units 3 ADUs TOTAL 170 ADUs The City can the net out these ADU units from the total RHNA need for the 2021-2029 Planning Period as shown in the table below. ADU Production Assumption Very Low Low Moderate Above Moderate ADU Projections 42 73 51 3 Projects “in the Pipeline” The City has housing projects in various stages of the entitlement process, including projects under construction but not occupied, entitled projects and project in the pre-application of application process. Collectively, these projects can be counted as credit to accommodate the 6th Cycle RHNA growth need, provided they received a Certificate of Occupancy after June 30, 2021. The table below summarizes these pipeline projects. Summary of Projects in the Pipeline by Income Category Very Low Low Moderate Above Moderate Pipeline Projects 43 78 0 2,183 Based upon current projects in the pipeline, the City of Newport Beach has already met the 2021-2029 RHNA need for Above Moderate Income. 5th Cycle Sites - Capacity within Existing Zoning Housing Element Update Advisory Committee - February 17, 2021 Item No. V(b) - Attachment 3 Housing Opportunity Sites inventory Methodology and Progress Draft Page 4 kimley-horn.com 1100 Town & Country Road, Suite 700 | Orange, CA 92868 714.939.1030 The final step in establishing the Baseline is to understand the City’s capacity within existing zoning. The HEUAC recommended all sites included in the 5th Cycle Housing Element Update that have not yet redeveloped be included in the 6th Cycle element as well (this does not include sites being considered for rezones). These sites have already been determined to have propensity for redevelopment because of the City’s comprehensive analysis effort as part of the 5th Cycle. The capacity within the 5th Cycle Sites is outlined in the table below: 5th Cycle Housing Element Sites Used for the 6th Cycle Very Low Low Moderate Above Moderate 5th Cycle Sites 0 0 348 40 Net Remaining Need for the 2021-2029 Planning Period Combining the above considerations, the net remaining RHNA need can be calculated. As shown in the table below, the net remaining need is 2,794 units for the 2021-2029 planning period. This net total represents housing growth need that must be accommodated through the identification of adequate sites. Net Remaining 2021-2029 RHNA Need Very Low Low Moderate Above Moderate RHNA Allocation 1,453 928 1,048 1,405 ADU Projections 42 73 51 3 Pipeline Projects 43 78 0 2,183 5th Cycle Sites 0 0 348 40 Remaining Need 1,368 777 649 -- Housing Element Update Advisory Committee - February 17, 2021 Item No. V(b) - Attachment 3 Housing Opportunity Sites inventory Methodology and Progress Draft Page 5 kimley-horn.com 1100 Town & Country Road, Suite 700 | Orange, CA 92868 714.939.1030 FOCUS AREAS General areas in the City to accommodate the net remaining RHNA are described below. Each of these areas will contribute in some measure to the accommodation of future housing need. Airport Area The Airport Area has been a focus for development for the City for several years. The development of higher-density residential units within this focus area will be critical to accommodating lower income units. Increasing density within the Airport Area was also a key strategy as part of the City’s 4th and 5th Cycle Housing Element Update. West Newport Mesa Area West Newport Mesa has been identified by the City as a major reinvestment and redevelopment opportunity, where older industrial, smaller scale development can transition to support future residential development. The adjacent Hoag hospital and supportive medical-related activities supports the opportunity to provide housing opportunities for local workers of various income levels. Dover-Westcliff Area Dover-Westcliff has been identified as an area with opportunity to support increased density that is compatible with adjacent higher density residential uses and other uses that will support residential development. Newport Center Area Newport Center has recently had construction of several new residential developments. The City expects the continuation of these development opportunities that creates housing adjacent to major employment opportunities and support retail. Coyote Canyon Area Coyote Canyon is a closed landfill area with limited opportunities for active uses. A portion of the area is not subject to these restrictions and is considered an ideal opportunity for future residential development. Banning Ranch Area Banning Ranch has been utilized in prior planning periods to accommodate future housing need. Banning Ranch was approved by the City but denied by the Coastal Commission in the past. The City understands that future opportunities may still exist in the Banning Ranch area and would like to keep the site under consideration for the 2021-2029 planning period. Housing Element Update Advisory Committee - February 17, 2021 Item No. V(b) - Attachment 3 Housing Opportunity Sites inventory Methodology and Progress Draft Page 6 kimley-horn.com 1100 Town & Country Road, Suite 700 | Orange, CA 92868 714.939.1030 RHNA ACCOMODATION SCENARIOS To determine the location and strategies to accommodate future housing growth need, a series of planning assumptions have been developed to determine the total net development capacity within each of the focus areas previously evaluated by the Housing Element Advisory Committee. These planning assumptions include: Redevelopment Percentage • What percentage, within the planning period (October 15th, 2021 – October 15th, 2029), of the acreage is assumed to redevelop with residential units? Affordability • What is the assumed percentage of sites available to accommodate lower income housing development? Projected Average Density • What is the assumed residential density of future housing development in each focus area? Based on the variable assumptions above, the following two scenarios are presented for consideration: Housing Element Update Advisory Committee - February 17, 2021 Item No. V(b) - Attachment 3 Housing Opportunity Sites inventory Methodology and Progress Draft Page 7 kimley-horn.com 1100 Town & Country Road, Suite 700 | Orange, CA 92868 714.939.1030 Scenario #1 Minimum RHNA Accommodation This scenario calculates the minimum inventory of parcels needed to meet the unaccommodated 2021- 2029 RHNA growth need. This scenario poses risks to the City resulting from no-net-loss provisions requiring rezoning and other Housing Element compliance issues that may occur if sites are not developed with the assumed affordability. The tables below provide a summary of this scenario: Scenario 1 – Minimum RHNA Accommodation Area Acreage % Projected to Redevelop Affordability Proposed Density Net Units by Income Category Low/Very Low Moderate Low Moderate Above Moderate Airport 158 ac 30% 80% 20% 50 du/ac 1,891 472 0 West Newport Mesa 37 ac 15% 80% 20% 45 du/ac 198 49 0 Dover-Westcliff 14 ac 10% 0% 20% 30 du/ac 0 8 33 Newport Center 152 ac 25% 5% 5% 45 du/ac 85 85 1,535 Coyote Canyon 22 ac 100% 10% 10% 40 du/ac 88 88 704 Banning Ranch 46 ac 0% 15% 15% 30 du/ac 0 0 0 Total 427 2,262 702 2,272 Scenario 1 – Totals Low/Very Low Moderate Above Moderate RHNA Allocation 2,381 1,048 1,405 ADU Projections (Safe Harbor Approach) 115 51 3 Pipeline Projects 121 0 2,183 5th Cycle Sites 0 348 40 Rezones – Projected Units 2,262 702 2,272 Percentage Over Need 0% 0% 220% Housing Element Update Advisory Committee - February 17, 2021 Item No. V(b) - Attachment 3 Housing Opportunity Sites inventory Methodology and Progress Draft Page 8 kimley-horn.com 1100 Town & Country Road, Suite 700 | Orange, CA 92868 714.939.1030 Scenario #2 – Minimum RHNA Accommodation with Buffer This scenario allows the City to accommodate the RHNA growth with a reasonable buffer to avoid no- net-loss rezoning requirements and accommodates the reality that some sites will redevelop outside the assumed affordability. A buffer between 15-30% is generally recommended by HCD. The scenario summarized in the tables below includes the following considerations: • A more aggressive approach to ADU production; and • the addition of Banning Ranch as an opportunity area. Scenario 2 – Minimum RHNA Accommodation with Buffer Area Acreage % Projected to Redevelop Affordability Proposed Density Net Units by Income Category Low/Very Low Moderate Low Moderate Above Moderate Airport 158 35% 80% 20% 50 2206 551 0 West Newport Mesa 37 15% 80% 20% 45 198 49 0 Dover-Westcliff 14 10% 0% 20% 30 0 8 33 Newport Center 152 25% 5% 5% 45 85 85 1,535 Coyote Canyon 22 100% 10% 10% 40 88 88 704 Banning Ranch 46 100% 15% 15% 30 206 207 962 Total 427 2,783 988 3,234 Scenario 2 – Totals Low/Very Low Moderate Above Moderate RHNA Allocation 2,381 1,048 1,405 ADU Projections (Aggressive Approach) 228 100 6 Pipeline Projects 121 0 2,183 5th Cycle Sites 0 348 40 Rezones – Projected Units 2,783 988 3,234 Percentage Over Need 22% 27% 288% Housing Element Update Advisory Committee - February 17, 2021 Item No. V(b) - Attachment 3 Housing Opportunity Sites inventory Methodology and Progress Draft