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HomeMy WebLinkAbout20210303_HEUAC_Minutes_ApprovedPage 1 of 9 CITY OF NEWPORT BEACH HOUSING ELEMENT UPDATE ADVISORY COMMITTEE MEETING ZOOM MEETING, NEWPORT BEACH, CA WEDNESDAY, MARCH 3, 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, Elizabeth Kiley, Geoffrey LePlastrier, Stephen Sandland, Debbie Stevens, Paul Fruchbom, (Ex Officio Member) Will O’Neill, Susan DeSantis (joined at 6:03 p.m.) MEMBERS ABSENT: None Staff Present: Community Development Director Seimone Jurjis, Deputy Community Development Director Jim Campbell, Senior Planner Ben Zdeba, Administrative Support Specialist Clarivel Rodriguez III. PUBLIC COMMENTS ON NON-AGENDA ITEMS Jim Mosher reminded the Committee that on March 4, 2021, the Planning Commission will review the City’s Annual Progress Report on the status of the current General Plan. Debra Allen advised the Committee that they would receive communications from her neighbors about the height limits in the overlay zoning for Corporate Plaza and Corporate Plaza West. The neighborhood is concerned and requests adding or including height limits in the overlay zoning. Chair Tucker stated that height was related to the Zoning Code so the Committee would not change heights or make recommendations regarding height. If any changes were made it would be the purview of the City Council. IV. CONSENT CALENDAR a. Minutes of February 17, 2021 Recommended Action: Approve and file the minutes of February 3, 2021. Chair Tucker indicated Jim Mosher submitted changes to the minutes. Committee Member Sandland made a Motion to accept Mr. Mosher’s changes related to his comments. Chair Tucker indicated they would use all of Mr. Mosher’s changes unless there was an objection. Housing Element Update Advisory Committee Meeting March 3, 2021 Page 2 of 9 Debra Allen stated she thought height was a Zoning issue. Chair Tucker said that overlay is zoning, but what it denotes is leaving the current zone in place and allowing an additional overlay use according to conditions. Committee Member Sandland moved, seconded by Chair Tucker, to approve the minutes of the February 17, 2021 meeting as amended by Mr. Mosher. AYE: Tucker, Bloom, DeSantis, Kiley, LePlastrier, Sandland, Stevens, Fruchbom NO: None ABSTAIN: None ABSENT: None 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. Chair Tucker asked Committee Member Stevens to work with staff on correcting the map number and parcel numbers that she was concerned about. He further noted that the Committee is concerned with the feasibility of sites but have not gotten to suitability yet. In response to Committee Member Steven’s inquiry, Chair Tucker said the sites inventory would be on the next agenda. Chair Tucker said the Overlay Subcommittee would meet with staff to discuss next steps. If they are short on sites, then the overlay would become Plan B. Committee Member Sandland pointed out that a portion of Parcel 17 in the “Sites within the 65dB CNEL Contour” report was determined to be feasible and requested that staff update the exhibits accordingly. Senior Planner Ben Zdeba stated he would make the changes. Chair Tucker said the maps need to be done for the remainder of town and asked Senior Planner Zdeba to make sure they are coherent. The goal is to formalize what the Committee did and establish for the State that they examined all parcels in town for potential housing. Deputy Community Development Director Jim Campbell said the initial draft of the Housing Element including the Housing Opportunity List would be available to the Committee the week of March 8th and would be on the next agenda. There are some parcels that are carried over from the fifth cycle and are included. b. Recap of the February 24, 2021 Virtual Public Workshop Recommended Action: Receive a presentation recap of the virtual public workshop, discuss the outcome and takeaways, and provide guidance to staff on topics, such as the sites inventory analyses, policy framework, and future public virtual workshop opportunities. Housing Element Update Advisory Committee Meeting March 3, 2021 Page 3 of 9 Deputy Community Development Director Jim Campbell introduced Jenna Tourje of Kearns & West to lead the discussion. Ms. Tourje utilized a presentation to recap the February 24, 2021 Virtual Public Workshop. There were 71 community participants and over 150 comments and questions. With respect to digital engagement in February, there were 588 unique IP addresses that visited the website and there are 433 registered users receiving updates on the project. There were two polls of participants regarding Accessory Dwelling Units (ADU). The first was about participant willingness to develop an ADU on their own property and the second about how participants felt regarding a neighbor developing an ADU. Participants held a range of opinions on developing their own ADUs and most participants were accepting of a neighbor developing an ADU. Ms. Tourje noted that there were 150 comments in the chat and that those comments are available on the Newport Together website. Some key questions brought up in the chat and answered by staff and the project team were regarding the specifics of the Regional Housing Needs Assessment (RHNA), Measure S, the small lot ordinance, workforce housing, need for recreational opportunities and the impact on schools. Other themes addressed were the type of housing stock needed to accommodate units per acre in the City, the relationship between ADUs and Homeowners Associations (HOA), conserving existing residential communities, the development of mixed-use housing opportunities, and involving businesses in the Airport Area. Committee Member Stevens stated she was pleased with the community involvement. In response to Committee Member Sandland’s question Deputy Community Development Director Campbell said the Santa Ana Unified School District oversees the Airport Area schools. The area south of the 73 Freeway is in Newport-Mesa Unified School District, but he was unable to identify specific schools that would be impacted. It would be addressed by the payment of school fees to the school district directly for the construction of housing or other construction. Committee Member Sandland requested staff prepare a list of schools that students in that area would attend. Committee Member Kiley confirmed that any new students in the new housing in the Airport Area would go to Santa Ana schools. Ms. Tourje said that a member of the Newport-Mesa Unified School District participated in the workshop. Chair Tucker stated there is not a lot of discretion with schools, the fees must be paid, and the school district must provide the facilities for the children in the area. There is well established law covering these issues. Deputy Community Development Director Campbell said that when the Environmental Impact Report (EIR) is done for the Housing Element the school impacts would be discussed in the Public Safety Section. He will provide the Committee with the school information requested by Committee Member Sandland. Committee Member Kiley commented that addressing the public’s questions and assuring them that any housing built in the Airport Area would not impact Newport Beach’s schools at all is important. Chair Tucker said that he did not know what was happening in Newport-Mesa, but many schools have declining enrollment and would welcome more students. Housing Element Update Advisory Committee Meeting March 3, 2021 Page 4 of 9 In response to Committee Member DeSantis’ question, Ms. Tourje indicated she would check the response on the video. She believed two people commented on two specific sites after the workshop. The video should be available on the City’s website and Newport Beach TV and she will have staff confirm that. Chair Tucker called for public comment, but there was none. c. Understanding “No-Net-Loss” Recommended Action: Receive an overview of the State’s “no-net-loss” requirement and discuss why it is important to consider and the implications or ramifications if it is not considered during the earlier stages of the Housing Element update process. Chair Tucker said that the “No-Net-Loss” law has a significant impact on the Housing Element. There is a consequence to listing the affordability factor of a parcel and then having that parcel developed inconsistent with the affordability factor. Senior Planner Zdeba utilized a presentation on “No-Net-Loss” with a goal of making the concept understandable. If the City plans in the inventory for a certain number of units on a site and the private market forces underdevelop the site, then the City must demonstrate to the State that it has alternative sites to make up for the loss on the specific underperforming site. If there is a demonstrated loss without a buffer then the City must identify additional sites and complete the land use changes within 180 days, which is difficult. That could even include amending the General Plan. Senior Planner Zdeba explained that having a demonstrated loss has Charter Section 423 implications and that having a vote of the electorate to increase density in 180 days is nearly impossible without holding a special election. Special elections are expensive and time and labor intensive. State Housing Element law states that cities cannot deny projects based on the need to identify additional sites for affordable units. So just because it would trigger a loss does not mean the city can deny housing projects. Therefore, “No-Net-Loss” should be considered during the initial site identification process. Violating “No-Net-Loss” is violating Housing Element law in the sense that there would not be adequate sites to accommodate the various income levels stipulated by the RHNA allocation. If the city violates Housing Element law it is also subject to decertification from California Department of Housing and Community Development (HCD) for the Housing Element and the city can be referred to the State Attorney General’s Office who can then fine the city as much as $10,000/day, withhold state funding, and/or have court ordered prevention of building permits. The Attorney General could also mandate that the City roll over the unmet need into the 7th Cycle RHNA. The City is already having difficulty planning for the 4,845 units and does not want a rollover. The City is also liable for lawsuits from private developers because they have a shortfall under RHNA. In response to Chair Tucker’s question Deputy Community Development Director Jim Campbell said that if a parcel is set up for 100 percent affordable housing and the regulations and policies require the project to be constructed in that fashion then the project would be difficult if not impossible to finance. Developers usually come in with a density bonus project with a lower inclusion and so the City must have other sites adequate to meet the RHNA. Anything more than 30 percent affordable would be an impediment to getting any project built and would make the Housing Element suspect and not likely to be certified. The City must create a buffer that can accommodate housing production Housing Element Update Advisory Committee Meeting March 3, 2021 Page 5 of 9 over the next eight years. Chair Tucker pointed out that because of how projects are developed the City will always be behind its RHNA and trying to come up with more sites for housing units. This problem is not unique to Newport Beach, but they need to either build in a cushion or go without one and hope that the State realizes this program does not work for anyone. The recommended cushion is up to 30 percent, which is approximately 1,500 units. Deputy Community Development Director Campbell said staff and the consultants are recommending a buffer so that the City does not have to attempt to rezone sites within a 180-day period. In response to Committee Member Fruchbom’s question Deputy Community Development Director Campbell said they could create a large buffer, but the total unit number would be large. Committee Member Fruchbom said he did not see a problem with a large buffer as knowledgeable people understand it is a charade. He thought it was logical to create a large buffer to avoid the 180-day problem. Deputy Community Development Director Campbell stated the danger was when they change the Land Use Element to create the housing opportunities. The policies require the City to change the General Plan and the zoning, and the electorate might not be excited about 10,000 to 15,000 units. In response to Committee Member Fruchbom’s question Deputy Community Development Director Campbell explained that staff’s strategy would be to create the housing opportunity sites to meet the RHNA and the Housing Element will include a program that requires the City to change the General Plan and provide the zoning for the sites. If it goes to a vote, then the extremely large numbers might be a disincentive for the electorate. Chair Tucker explained that the zoning would be changed up front after the Housing Element is adopted. Committee Member Fruchbom confirmed that the zoning changes had to go before the electorate and stated that he understood a large number of units might be a disincentive, but that was less of a problem than the consequences of not having a suitable buffer. Therefore, it is logical to have enough of a buffer to avoid the 180-day problem and involvement of the Attorney General. Chair Tucker stated that was logical if one believed the State would continue with the current rules. If the State does not, then the City might end up with more housing built by developers with less incentive to adhere to affordability. Committee Member Fruchbom commented that the sites identified by the Committee for the affordable component will not be developed and therefore many will enter the net loss column. Ex-Officio Member Will O’Neill stated it would be difficult to convince the electorate to do the bare minimum with respect to the Housing Element. It is very politically unpopular, so any buffer must be factored in against the political reality of a greenlight vote. Secondly, if they add a substantial number of units they could be developed disproportionately across the City. Based on this he was weary of adding too much of a buffer. Housing Element Update Advisory Committee Meeting March 3, 2021 Page 6 of 9 Committee Member DeSantis agreed with Ex Officio Member O’Neill and suggested looking at policy options to influence what gets built. If through policy options the City is looking at potentially 15 percent minimum inclusionary requirement for all projects built then it can back into some of the other assumptions to get the numbers. Chair Tucker stated Newport Beach does not have vacant land which complicates the problem as some sites are more suitable for affordable housing than others. Committee Member Fruchbom said the way the tax credit program is constituted even if the City were widely successful it would only be a drop in the bucket toward its affordable requirements. The tax credit dollars are limited, difficult to get, and allocated geographically. Chair Tucker agreed and said the Affordable Housing memo prepared by the Subcommittee illustrates that fact. Committee Member Stevens agreed with a small buffer but stated that anything more would be a hard sell to the electorate. Under Scenarios 1 and 2 there were 7,000 to 9,000 units, which is close to double RHNA. She wants to keep the character of Newport Beach’s community and argued that if they zone for 9,000 units they would not be able to ever back out of that number. Chair Tucker said that Committee Member Fruchbom was right, but that the Committee had to decide if it was worse to be threatened by the State or to zone 7,000 to 9,000 units in order to get 2,400 affordable units built. Committee Member Stevens said that every city in the State had to deal with this and that someone at the State level would have to come to their senses and Chair Tucker agreed. Committee Member Fruchbom confirmed that the City did not have the right to turn down the State Mandate. He agreed that 4,500 units is a tough sell and said that it would be a little tougher at 7,000 to 9,000 units. Ex Officio Member O’Neill said there would be a discussion about whether greenlight would or would not get triggered. Greenlight is not preempted straight out. They would have to submit the Housing Element for a vote. If the electorate votes it down then what happened in Encinitas could happen. The Building Industry Association filed a lawsuit against Encinitas and the Court struck down the voter initiative. It would take time, but Newport Beach could end up in that situation. Many people in the City, including probably the City Council, do not want to go to the voters and lose. Committee Member Bloom stated that if they do not have a significant buffer then they know what the City will come up against. Chair Tucker said that the City would run into supply and demand economics. Committee Member Bloom reiterated that tax credits are done geographically and allocated on projects that are generally small, 16 to 20 units. Committee Member Fruchbom said that was true for nine percent credits. Bond deals could be larger, but bond deals in Newport Beach fall short without huge equities or subsidies from somewhere. Housing Element Update Advisory Committee Meeting March 3, 2021 Page 7 of 9 Committee Member Sandland agreed with Ex Officio Member O’Neill and Committee Member Stevens. He did not want to be in a situation where they recommended too large a number of units and suggested starting with a smaller number of units. Jim Mosher asked if there is a form of possible zoning that mirrored the Housing Element. Could the City zone a parcel for 200 units of affordable housing or 20 percent affordable so that the zoning would match exactly what was promised in the Housing Element? He acknowledged that it would not get developed but stated it would avoid the immediate problem. Chair Tucker said that was the same question he had asked; could they obligate a developer to develop a parcel in that fashion. He did not believe that had ever happened and asked staff for further clarification. In response to Mr. Mosher’s question Deputy Community Development Director Campbell indicated it was technically possible. The City could have a minimum of 20 percent inclusionary across the board but would have to have enough sites to collectively add up to the RHNA numbers. In that case the above moderate income housing number would be large, possibly 10,000 units or more. That would lead to a shortage of sites. Mr. Mosher’s suggestion is technically possible but would make for a very rigid plan with its own set of complications. In response to Chair Tucker’s question Deputy Community Development Director Campbell explained that HCD would look at the overall program to make sure the City has policies that might generate the housing anticipated. Consultant Dave Barquist of Kimley-Horn went through a review with Encinitas and added that step one was abiding by the regulatory framework. When the City looks at the sites there is an iterative process that happens in the 6th Cycle because there is a lot of subjectivity and challenges as it relates to identifying the sites criteria. There is a more rigorous review of the coastal cities by HCD. There is no clear-cut answer, they must just give the best evidence they can of the current situation. Chair Tucker said that everything is brand new, even for the State. He expressed optimism that people would realize the mechanical details are challenging. Debra Allen asked if the Encinitas case was precedent and for the citation. Additionally, she asked what would happen if no development occurred on some of the sites designated for housing. Staff explained the “No-Net-Loss” rules, but what if at the end of the 8-year cycle no development occurred? Chair Tucker said he expected the State to look at it and try to ascertain whether what was proposed makes any sense at all. In response to Ms. Allen’s second point Deputy Community Development Director Campbell explained that at the end of the planning cycle if they underproduced they would have to evaluate what to do in the context of what State law looks like for the upcoming cycle. State law could change in the next 8 years. HCD will look at the production every year as they turn in the Housing Element Progress Report and if there isn’t any, they may take a closer look. Mr. Barquist said there are accountability enforcement provisions in the law that attempts to monitor and remedy the nonperformance of stated RHNA goals. SB35 is a streamlining provision based on Housing Element Update Advisory Committee Meeting March 3, 2021 Page 8 of 9 the City’s continued advancement of its goals. If the City is running behind it enacts streamlining provisions for affordable housing. The City cannot make sites develop, but it can provide the sites available. In response to Committee Member Sandland’s inquiry about economic feasibility Mr. Barquist said that the State cannot force a transaction. The State can lessen the burden of requirements and/or incentives and SB35 streamlines that process. Financial feasibility is the biggest challenge in coastal communities. In response to Deputy Community Development Director Campbell’s question Mr. Barquist explained that if a project is not progressing and SB35 is enacted then certain concessions kick in for developers which lessen the ability of a city to say no. At this point there are no penalties or things, but the State could make that decision and the trend is tightening requirements. Chair Tucker said some sites are not as economically feasible for housing as they are for their current use. 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 stated the draft of the Housing Element and Housing Opportunities list would be available to the public in a week’s time. It will be posted online and discussed at the March 17, 2021 meeting. Staff plans to hold a virtual workshop on March 22, 2021 to discuss the draft Housing Element. The Planning Commission will hold a study session on April 7, 2021. The public can provide feedback at every meeting. The City Council will hear the draft Housing Element on April 27, 2021. Staff hopes to send the draft Housing Element to HCD for the 60-day review process and its comments. Staff will take all the feedback and adjust the Housing Opportunities List and policies over the summer and up to the final adoption with the City Council in October. The environmental review process will happen in September and October 2021 and involves the Planning Commission and City Council. The Committee will have to meet over the summer to discuss feedback from HCD and the community, but there’s no schedule beyond May 15, 2021. Chair Tucker announced the March 17th meeting and then confirmed the next meetings would be between May and August. Deputy Community Development Director Campbell said the Committee could meet in April or May as necessary. Chair Tucker suggested a meeting on March 31st for additional comment by the Committee on the Housing Element and then a recess until the City hears back from HCD. Deputy Community Development Director Campbell said that could work and indicated that staff could report to the Committee about the public workshop on March 22nd. Chair Tucker stressed that the public needs to have opportunity to comment on the Housing Sites Inventory. Prioritizing the sites only comes into play if the City identifies more sites than it needs. Housing Element Update Advisory Committee Meeting March 3, 2021 Page 9 of 9 Deputy Community Development Director Campbell indicated the March 17th meeting is intended to allow staff and the consultants to familiarize the Committee with the document. Chair Tucker voiced support for the March 17th meeting and the March 31st meeting. He felt it particularly important for the Committee and the public to be able to comment. He also requested that Deputy Community Development Director Campbell schedule an Overlay Subcommittee meeting for the week of March 8th. Deputy Community Development Director Campbell stated he would schedule the Overlay Subcommittee meeting. Jim Mosher said that Chair Tucker had expressed a concern that the State be made aware that the Committee had evaluated all the potential sites in the City. The draft Housing Element Site Inventory only identifies opportunity sites. He asked if the draft Housing Element explained which sites were rejected and why and how the Committee’s work would be communicated to HCD. Chair Tucker said that the State had enough to look at without the items that were not approved. His concern is to ensure that if Newport Beach is ever challenged, they can say that they looked at everything and provide the State with proof of due diligence. He felt that so long as the City can prove it acted in good faith it will be in good standing with the State. VI. ADJOURNMENT - 7:41 p.m. Next Meeting: March 17, 2021, 6 p.m. via Zoom