Loading...
HomeMy WebLinkAbout20210217_HEUAC_Minutes_ApprovedCITY OF NEWPORT BEACH HOUSING ELEMENT UPDATE ADVISORY COMMITTEE MINUTES ZOOM MEETING, NEWPORT BEACH, CA WEDNESDAY, FEBRUARY 17, 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 February 3, 2021 Meeting Recommended Action: Approve and file the minutes of February 3, 2021. Committee Member Sandland requested the minutes reflect that the Basic Compatibility Qualities can be found in the California Airport Land Use Commission (ALUC) Planning Handbook. Chair Tucker moved, seconded by Committee Member Sandland, to approve the minutes of the February 3, 2021 meeting as amended. AYE: Tucker, Bloom, DeSantis, Kiley, LePlastrier, Sandland, Stevens NO: None ABSTAIN: None ABSENT: Fruchbom V. CURRENT BUSINESS a. Subcommittee Progress Reports Recommended Action: Receive verbal updates from each subcommittee, as appropriate. Receive and file final memorandums prepared by several of the subcommittees. Housing Element Update Advisory Committee Meeting February 17, 2021 Page 2 of 8 Chair Tucker noted subcommittee reports for sites in the Airport Area, both east and west of MacArthur, and affordable housing are complete. He is awaiting information to complete subcommittee reports for sites in the Remainder of Town and West Newport Mesa. b. Housing Opportunity Sites Inventory Methodology and Progress Draft Recommended Action: Receive a presentation on the current progress of the housing opportunity sites inventory and an overview of different scenarios that meet the Regional Housing Needs Assessment (RHNA) allocation and California Department of Housing and Community Development (HCD) guidelines. Provide feedback to staff regarding format and preferred scenario(s). Deputy Community Development Director Jim Campbell advised that the City continues to send letters to property owners to determine their interest in redeveloping their properties. David Barquist, Kimley-Horn and Associates, reported the City's Regional Housing Needs Assessment (RHNA) allocation has increased by 11 units to 4,845 units. The projections, assumptions, methodology, and variables presented for this discussion can change based on the direction of the Housing Element Update Advisory Committee (HEUAC). The California Department of Housing and Community Development (HCD) has a number of criteria for the identification of sites. Additional criteria for sites identified for low- and very-low-income units are a density of 30 dwelling units per acre, size ranging from 0.5 acre to 10 acres, and distribution throughout the community. In response to Committee Member Sandland's questions, Mr. Barquist indicated HCD does not require retail services in the area of lower-income housing, but retail services are considered in the analysis. Deputy Community Development Director Campbell explained that Affirmatively Furthering Fair Housing ensures that the City has a comprehensive strategy to eliminate or combat any form of discrimination in the housing market. Mr. Barquist advised that the sites analysis baseline is the number of housing units provided by Accessory Dwelling Units (ADU), projects in the pipeline, and fifth cycle sites. HCD's pre-certified methodology, the Safe Harbor Assumption, allows the City to calculate future ADU production in each income category. Using the Safe Harbor Assumption and the City's average ADU production in 2018-2020, the City can count 42 very-low-income, 73 low-income, 51 moderate-income, and 3 above-moderate-income ADUs toward its RHNA. In reply to Committee Member Stevens' query, Chair Tucker indicated the ADU numbers are based on HCD's formula. If the City chooses to use aggressive projections for ADU production, the numbers will be higher. In response to Committee Member DeSantis' inquiry, Mr. Barquist related that using ADU production in 2018-2020 is the current standard. The City may use higher numbers if it has support for them. Principal Planner Jaime Murillo added that the City did not allow ADUs prior to 2018. ADU production was 3 in 2018, 6 in 2019, and 55 in 2020. ADU production in 2020 was an anomaly because the Coronado apartment complex [now called “Eight 80 Newport Beach”] submitted an application to add 30 units through the ADU program. In answer to Committee Member Sandland's question, Principal Planner Murillo stated large multiunit developments are allowed to convert non-living space to ADUs. Housing Element Update Advisory Committee Meeting February 17, 2021 Page 3 of 8 Mr. Barquist continued his presentation with projects in the pipeline. A project in the pipeline is a project at any stage in the entitlements process, but it must be first occupied after June 30, 2021 to be counted toward the sixth cycle RHNA. Staff has identified projects in the pipeline that provide 43 very-low, 78 low-, 0 moderate-, and 2,183 above-moderate-income units toward the RHNA. Fifth cycle sites are sites contained in the fifth cycle Housing Element that have not been redeveloped and are not considered a rezone opportunity. Currently, there are 348 moderate-income and 40 above-moderate-income units in the fifth cycle that can be counted toward the sixth cycle. Deducting ADUs, projects in the pipeline, and fifth cycle sites from the RHNA allocation provides the net remaining need of 1,368 very-low-income, 777 low-income, 649 moderate-income, and 0 above-moderate-income units or 2,794 total units. The HEUAC and staff have identified focus areas of Banning Ranch, West Newport Mesa, Dover-Westcliff, Newport Center, Coyote Canyon, and Airport Area to accommodate the net remaining need. The HEUAC will need to make assumptions about redevelopment percentage, affordability, projected density, and acreage in order to plan for the net remaining need. Redevelopment percentage is the assumed percentage of land that is developed today and that will be redeveloped for residential uses in the sixth cycle. Possible scenarios are meeting the minimum RHNA and meeting the minimum RHNA with a buffer. A buffer will cover the no-net-loss requirement. In answer to Committee Member Sandland's query, Mr. Barquist explained that policy discussions will address the financial feasibility of affordable housing projects. Mr. Barquist shared the Scenario 1 assumptions for each focus area. In reply to Chair Tucker's inquiries, Mr. Barquist advised that substantial evidence in support of affordability allocations could include past performance of projects, propensity to change, and policies and programs for affordable housing. The City could implement an in-lieu fee that is designated for affordable housing as a program that supports affordable housing. Programs will be monitored to determine their success. The buffer is a protectionary measure for the no-net-loss requirement. State law, with the exception of inclusionary ordinances, does not require developers to include affordable housing in projects. In response to Committee Member DeSantis' questions, Mr. Barquist indicated the Governor's proposed budget includes $500 million to subsidize affordable housing. The Legislature is taking a carrot-and-stick approach to affordable housing. There is a proposal to establish a Housing Accountability Office that would ensure cities comply with statutory obligations. Policies and programs can be based on existing or potential funding sources for affordable housing. Chair Tucker remarked that $500 million for affordable housing was a tiny portion of the amount needed to fulfill affordable housing allocations across the state. In answer to Committee Member Stevens' query, Mr. Barquist explained that the percentages for redevelopment in Scenario 1 were developed internally as a general estimate of redevelopment. Mr. Barquist reviewed Scenario 1 housing production for each focus area, the total of which will exceed the net remaining need. There is a trend for higher-density development in the Airport Area, and the Airport Area was a key strategy to accommodate growth in the fourth and fifth cycles. The percentage of redevelopment for the Airport Area considers existing development and propensity to change. The West Newport Mesa Area has significant potential for reinvestment and redevelopment and partnership opportunities. Staff and the consultants assumed a 30 percent residential redevelop of City-owned parcels in the West Newport Mesa Area. The Dover-Westcliff Housing Element Update Advisory Committee Meeting February 17, 2021 Page 4 of 8 Area has been identified as an area that could support increased density compatible with surrounding uses. In answer to Chair Tucker's query, Deputy Community Development Director Campbell indicated that one of the pipeline projects in the Dover-Westcliff Area reduces the number of housing units on the site and does not include any affordable housing. However, the units will count toward the sixth cycle. Chair Tucker commented that the City is not penalized for this project reducing the number of housing units and is rewarded for this project providing housing even though the number of units is less. Mr. Barquist noted the construction of high-end developments in the Newport Center Area in recent years and the expectation for that type of development to continue. In reply to Committee Member Sandland's inquiry, Chair Tucker related that the discussion of the Newport Center Area covered outer parcels and parcels within the shopping center. The entire area has the potential to redevelop. Committee Member Stevens added that Irvine Company does not own all parcels in the Newport Center Area. In response to Chair Tucker's question, Mr. Barquist reiterated that development feasibility is based on individual projects. The City has many options to encourage development, and those options can be different for each focus area. In answer to Committee Member DeSantis' inquiry, Mr. Barquist explained that the assumptions are 25 percent of the Newport Center Area will redevelop to residential and 5 percent of units on the redeveloped land would be low income and 5 percent would be moderate. An inclusionary program is not necessarily the prescription to attain affordable units. Mr. Barquist recalled the HEUAC's discussions about Coyote Canyon. A portion of the Coyote Canyon Area is not subject to the restrictions for developing housing on a closed landfill. Chair Tucker added that the HEUAC originally thought the area was 32 acres. After review, staff believed the area where development could occur was 22 acres. Mr. Barquist advised that the potential for redevelopment of the site is high. Tait has expressed interest in and spoken with the County of Orange (County) about developing the site. Staff talked with the County regarding acreage and percentage of affordability. Chair Tucker believed the percentage for low-income and very-low-income housing on the site could be higher. Committee Member Sandland questioned whether the full 22 acres could be developed given its shape. He suggested reducing the total number of units and increasing the number of low-income and moderate-income units. Chair Tucker noted that Tait, an engineering firm, proposed developing 22 acres. Deputy Community Development Director Campbell added that he has spoken with the County and Tait, and the 22-acre number is fairly solid at the current time. The County seems eager to partner with the City and has left planning to the City. The projections need to include above-moderate-income housing to make a development work. Mr. Barquist reviewed the history of the Banning Ranch Area. While the potential for redevelopment is zero, the Banning Ranch Area should remain under consideration for future Housing Element Update Advisory Committee Meeting February 17, 2021 Page 5 of 8 growth potential. Scenario 1 fulfills the allocations for very-low-, low-, and moderate-income units and provides the number of acres that need to be rezoned to accommodate housing units. In reply to Chair Tucker's query, Deputy Community Development Director Campbell related that Scenario 1 provides a total of 7,928 units, which includes projects in the pipeline. The total units that need rezoning is 5,236, which is the focus. Above-moderate units are needed to help finance the lower-income units. In answer to Committee Member Kiley's inquiry, Mr. Barquist explained that staff and the consultants factored the sites subcommittees' findings into the percentage projected to redevelop and ensured the assumptions for acreage were relatively consistent with the subcommittees' potential for redevelopment. Mr. Barquist reiterated that Scenario 2 includes a buffer for the no-net-loss requirement. HCD recommends a buffer of 20-30 percent. Scenario 2 assumes aggressive ADU projections, 100 percent projected redevelopment in the Banning Ranch Area, and 35 percent projected redevelopment in the Airport Area. Scenario 2 provides 9,697 total units. The excess of above-moderate units results from pipeline projects and Banning Ranch development and can be used to subsidize lower-income units. The recommended approach is Scenario 2 with an inclusive policy to explore a variety of accommodation policies and programs in the Housing Element. Staff and the consultants recommend they conduct the requisite analysis of individual parcels within focus areas to justify the use of parcels. In answer to Committee Member DeSantis' inquiry, Mr. Barquist advised that the numbers can be revised in multiple ways to provide multiple scenarios. In reply to Chair Tucker's question, Mr. Barquist indicated the California Environmental Quality Act (CEQA) analysis will be programmatic. In many cases, changes can be accommodated under CEQA's common sense exemption. Deputy Community Development Director Campbell added that the plan is to keep as many sites in the analysis as possible. Using a broader list of sites will over-predict impacts, but it is necessary to begin the environmental analysis and keep the Housing Element Update on schedule. Committee Member Sandland supported continuing discussions with Scenario 2. The owner of the Newport Beach Golf Course is interested in redevelopment; therefore, the area needs to be included in the map. A number of apartment complexes could accommodate ADUs, and the owners should be made aware of the criteria for increasing the density of their units. Deputy Community Development Director Campbell clarified that the Coronado apartment complex utilized an existing building to create ADUs. Staff can promote and explore the addition of ADUs to apartment complexes. Committee Member Kiley believed the potential for ADUs was worth sending letters to large complexes, particularly the older ones that have laundry rooms, storage rooms, and open space. In response to Committee Member Stevens' query, Chair Tucker agreed that Scenario 2 could be difficult to sell but is appropriate for discussions. Ultimately, the HEUAC will develop a series of plans with pros and cons for each, and the Council will choose one. Nancy Scarbrough inquired about the possibility of staff notifying owners of granny units of the requirements for upgrading the units to ADUs so that the units could be counted as ADUs and the Housing Element Update Advisory Committee Meeting February 17, 2021 Page 6 of 8 owners would have conforming properties. She inquired about the effects of a developer not providing the number of affordable units for which the property is zoned. Chair Tucker indicated the City will need to create policies and programs to encourage developments with affordable housing. The buffer is designed to mitigate a project not providing the number of affordable units envisioned for the site. Community Development Director Jurjis reported approximately 20 granny units are permitted. To obtain a permit, the owners will have to upgrade the units to Code requirements, which can be costly. The City can impose more restrictive Code requirements, but it cannot waive requirements. Jim Mosher clarified that the Coronado apartments are currently known as Eight 80 Newport Beach. Charles Klobe remarked that a number of permitted granny units in Newport Heights could be upgraded to ADUs with minor changes. He asked if the traffic implications of housing on Banning Ranch would be attributed to Newport Beach and affect the potential widening of West Coast Highway, which the public seems to support. Deputy Community Development Director Campbell advised that the General Plan and Land Use and Housing Elements include 1,375 housing units in Banning Ranch. That housing would be included in the analysis for an amendment. The scenarios do not propose a change for Banning Ranch. Debra Allen commented that the scenarios are shocking and requested the HEUAC maintain the height limits in the Sight Plane Ordinance. Chair Tucker indicated the HEUAC's role does not include changes to development requirements and standards. David Tanner did not believe citizens would support Scenario 2. One of the alternatives should provide the minimum number of units that the voters would support. The City should submit that alternative with supporting documents to HCD so that HCD would work with the City for years to fulfill the allocation. Chair Tucker reiterated that the HEUAC's charge is to develop a plan to comply with the allocation and that Mr. Tanner should present his comments to the Council. c. Policy Framework Approach for Meeting RHNA Recommended Action: Receive an overview of the possible policy strategies to help encourage housing production in alignment with the draft housing opportunity sites inventory. Provide feedback to staff on policy approaches. Mr. Barquist reviewed a list of policy considerations such as an overlay zone, an inclusionary housing program, an affordable housing trust fund, and ADU incentive and monitoring programs. He cautioned the HEUAC not to omit an opportunity that could be useful in accommodating future growth. Chair Tucker related that few property owners have expressed interest in redeveloping their properties. An overlay zone provides an option for the property owner. The City regulates it by putting conditions on exercising the overlay rights. Housing Element Update Advisory Committee Meeting February 17, 2021 Page 7 of 8 In response to Chair Tucker's query, Deputy Community Development Director Campbell indicated an overlay zone can be applied to individual parcels, but staff envisioned an overlay zone applying to a neighborhood. Deputy Community Development Director Campbell reported the Council eliminated the inclusionary program in 2012 or 2013 because it did not feel the program was needed to fulfill the RHNA allocation of 5 units. Chair Tucker believed an overlay needs to apply to individual properties to obtain the maximum amount of affordable housing and keep projects viable. The policies will implement the State mandates. Deputy Community Development Director Campbell remarked that Housing Element policies will implement various tools, and the tools need to provide flexibility. A host of tools can be included in an overlay or inclusionary ordinance. That discussion will come later. Staff seeks input as to the tools to include in the Housing Element. Chair Tucker suggested the Housing Element contain as many policy considerations as are feasible and do not adversely impact housing. The State wants the City to change the balance of its land plan to be more housing-centric. In answer to Committee Member DeSantis' inquiry, Chair Tucker related that the number of above-moderate units are needed to finance the imposition of affordable requirements on property owners. The HEUAC should ask property owners how many affordable units they can provide and maintain the viability of the project. That number would determine the correct number of above-moderate-income units. Deputy Community Development Director Campbell advised that, among the infinite number of scenarios, there is a scenario that reduces the total number of above-moderate units through a combination of policy considerations. Jim Mosher commented that the Council asked the HEUAC to advise staff and consultants regarding the Housing Element and the Land Use Element. Many of the programs discussed propose zoning that is inconsistent with the current Land Use Element. He inquired whether the plan is to submit revised Housing and Land Use Elements by October or only a revised Housing Element. He asked if a Housing Element that promises to add housing to the General Plan is a General Plan amendment. Deputy Community Development Director Campbell indicated the plan is to obtain certification of the Housing Element and then begin the General Plan rezone to implement Housing Element policies. Amending the Housing Element is a General Plan amendment, but it does not trigger a Greenlight vote. When the Land Use Element is updated to reflect the Housing Element policies, staff anticipates the update triggering a Greenlight vote. David Tanner supported the use of an overlay policy and the City seeking state and federal funding for affordable housing rather than burdening projects. Perhaps, an overlay zone could be included in development agreements. He recommended not placing an overlay zone on property that the City does not control and keeping planning documents confidential. In answer to Chair Tucker's query, Mr. Barquist explained that the strategy to reuse/convert open space is used when a jurisdiction does not have sufficient sites. It is a strategy for discussion. Housing Element Update Advisory Committee Meeting February 17, 2021 Page 8 of 8 d. Upcoming Schedule and Community Engagement Opportunities Recommended Action: No action. Staff to provide a brief overview of upcoming schedule for meetings and workshops. Deputy Community Development Director Campbell reported a public workshop is scheduled for February 24, 2021, to discuss the scenarios and policies. Staff anticipates providing an initial draft Housing Element Update at the HEUAC's March 17 meeting. A public workshop on the draft will be held on March 22. Staff will present the draft to the Planning Commission on April 8 and to the Council on April 27. Staff plans to submit a progress draft to HCD in mid-May. Senior Planner Ben Zdeba added that the progress draft will be posted for public review when it is submitted to HCD. In answer to Chair Tucker's query, Deputy Community Development Director Campbell related that the HEUAC will receive the initial draft Housing Element Update on Friday before the March 17 meeting. The HEUAC has reviewed two chapters in draft form. Comments may be submitted for HEUAC meetings and the Planning Commission and Council meetings. In reply to committee Member Steven's inquiry, Mr. Barquist advised that the May timeframe is not a requirement, but submitting the progress draft in mid-May allows the City to obtain review, revise the draft, and complete the environmental review in time to submit the final Housing Element in October. Nancy Scarbrough suggested staff publish the scenarios to generate public interest and attendance in the workshops. David Tanner suggested staff allow the public to participate in meetings by phone as well as by Zoom. e. Establishment of an Overlay Subcommittee Recommended Action: Form a new subcommittee tasked with studying the application of zoning overlays. Chair Tucker appointed Committee Members Stevens’ and Bloom and himself to the Overlay Subcommittee. VI. ADJOURNMENT – 9:03 p.m. Senior Planner Zdeba advised that the next meeting will include subcommittee final documents and memoranda and possibly a follow-up discussion of scenarios and policies. Chair Tucker added to the agenda a briefing on the public workshop. Next Meeting: March 3, 2021, 6 p.m. via Zoom.