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HomeMy WebLinkAbout20201202_HEUAC_Minutes_ApprovedCITY OF NEWPORT BEACH HOUSING ELEMENT UPDATE ADVISORY COMMITTEE MINUTES ZOOM WEDNESDAY, DECEMBER 2, 2020 REGULAR MEETING – 6 P.M. I. CALL MEETING TO ORDER – 6 p.m. II. WELCOME AND ROLL CALL MEMBERS PRESENT (remote): Chair Larry Tucker, Jeffrey Bloom, Susan DeSantis, Paul Fruchbom, Elizabeth Kiley, Geoffrey LePlastrier, Stephen Sandland, Ed Selich, Debbie Stevens MEMBERS ABSENT: (Ex Officio Member) Will O’Neill (excused) Staff Present (remote): Community Development Director Seimone Jurjis, Principal Planner Jaime Murillo, Senior Planner Ben Zdeba, Administrative Support Technician Amanda Lee III. PUBLIC COMMENTS ON NON-AGENDA ITEMS David Tanner indicated the public has been told that they will get answers to their questions at this meeting, but there is not an agenda item for this topic. He inquired as to when the public will have an opportunity to ask questions and receive answers. Hoiyin Ip remarked that virtual meetings are missing the energy of in-person meetings and suggested more interaction with the public during workshops and activities before and after workshops to get participants thinking about housing topics. IV. CONSENT CALENDAR a. Minutes of the November 4, 2020 Meeting Recommended Action: Approve and file the minutes of November 4, 2020 Committee Member Sandland corrected the third paragraph of page 4 to read "Chair Tucker reported Parcels 46-54, the Avon parking lot, and the Mariners Square parking lot will be added to the list as potentially feasible, and he will inquire regarding construction of residential units on a closed landfill." Chair Tucker moved, seconded by Committee Member Sandland, to approve the minutes of the November 4, 2020 meeting as amended. AYE: Tucker, Bloom, DeSantis, Fruchbom, Kiley, LePlastrier, Sandland, Selich, Stevens NO: None ABSTAIN: None ABSENT: None Housing Element Update Advisory Committee Meeting December 2, 2020 Page 2 of 7 V. CURRENT BUSINESS a. Subcommittee Progress Reports Recommended Action: Receive verbal updates from each subcommittee, as appropriate. Chair Tucker reported the sites subcommittees have completed their work temporarily. The notes for sites in the remainder of town have been revised. The affordable housing subcommittee met on October 27, 2020 to discuss the Regional Housing Needs Assessment (RHNA) numbers and preparation of a full report to the Housing Element Update Advisory Committee (HEUAC). The purpose of the report is to educate the HEUAC regarding the various methods for financing and developing affordable housing projects. Understanding the affordable housing business will help the HEUAC reach a recommendation for the Council. Chair Tucker indicated he has prepared a first draft of the report and sent it to staff for review. He will modify the report after staff's review, if necessary, and circulate it to subcommittee members for revision. The report should be complete in December. In response to Chair Tucker's question, Senior Planner Ben Zdeba advised that staff is preparing maps containing all sites and a list of properties from the fifth cycle that have not been developed. Staff hopes to provide both at the next meeting as a “receive and file” agenda item. Committee Member Fruchbom related that he read information indicating Shopoff sold an acre in Uptown Newport for 66 luxury condominiums at an average price of almost $400,000 per unit or more than $24 million for the real property. If the information is true and the City can create land through increased densities, the land value of the units will be extraordinarily high and should allow the City to extract some reasonable fees for added density. Charles Klobe added that the Uptown Newport project is entitled for 66 luxury condominiums with no requirement for anything less than above moderate, which should increase the price of land. The entitlements that Picerne is seeking for the 4400 Von Karman project only allows 5% of the total units to be low-income units while the apartments will be market rate. Chair Tucker recalled Shopoff building a fair number of affordable units in the first phase of the project and Picerne seeking a density bonus of 20 percent in exchange for either 10 percent low-income units or 5 percent very-low-income units. Picerne chose 5 percent very-low-income units. David Tanner asked about the validity of statements that staff is considering placing housing within the 65 decibel (dB) CNEL contour and, if true, the rationale for doing that. It would seem to open the City to litigation. b. Virtual Workshops Recap Recommended Action: Discuss the virtual workshops so far and takeaways from them. Receive an overview of the outreach plan timeline moving forward and provide feedback to staff and the consultant. Senior Planner Zdeba reported the November 16 and 17, 2020, site suitability workshops obtained community input regarding potential density, scale, and attributes that could be applied to sites and the suitability of housing on the sites. Forty to 50 people attended each night, and dialog with the public was greater during the second workshop. The November 23 Circulation Element workshop included a good discussion with the community and solicited good feedback. Housing Element Update Advisory Committee Meeting December 2, 2020 Page 3 of 7 Jenna Tourje, Kearns & West, advised that the public provided good information through the chat feature, and she shared that information with all participants during the workshop. Chair Tucker noted participants could offer multiple comments and were not limited to one 3-minute time period. Staff and the consultants have addressed the shortcomings of the first workshop. In reply to Committee Member Sandland's inquiries, Ms. Tourje indicated recordings of workshops are available on newporttogether.com. The team is preparing an after-action report that will include key comments from the workshops and printouts of comments from the chat feature. The report should be ready in the next week. The team can capture comments regarding specific sites. In answer to Committee Member DeSantis' queries, Ms. Tourje related that the team has been promoting the Newport Together website through ads, emails, and campaigns. Seventeen people have provided input on the map. Many people have visited the website without providing feedback on parcels. One thousand thirty-six unique IP addresses have visited the website over the past month. Currently, there is nothing tangible to which the public can respond. Senior Planner Zdeba added that the next utility bill will include a postcard regarding the January Circulation Element workshop. Hopefully, the postcard will drive a little more traffic to Newport Together and generate input. Staff is exploring contacting homeowners' associations (HOA) in the vicinity of the affected areas to generate interest. Deborah Allen, Harbor View Hills Community Association President, commented that staff has attempted to make the process as transparent as possible and that she has heard good feedback from participants in the second workshop. Contacting HOAs with a list of sites should generate interest and input. Nancy Scarbrough believed the format of the two workshops was much more interactive than previous workshops. Twelve to 13 of the participants were staff and committee members, and another ten were people who regularly attend public meetings. Some participants told her they left the workshops early because they did not feel their opinions would affect the outcome. Chair Tucker advised that he sent an email about the workshops to 75 people who were likely to attend, and one email recipient attended the first night. Adriana Fourcher encouraged the HEUAC to engage business owners in discussions of Airport Area sites. Committee Member DeSantis suggested presenting information about specific sites to HOAs interested in those sites. Chair Tucker indicated the HEUAC needs to narrow the list of sites before talking to HOAs. c. Housing Element Update Progress Documents Recommended Action: Discuss, receive, and file. David Barquist, Kimley-Horn and Associates, reviewed the five basic components of the Housing Element Update. Drafts of the Community Profile and Review of Past Performance components have been prepared. Chair Tucker advised that this item will come back at the next meeting for additional thoughts and comments because of the substantial amount information contained in the documents. Housing Element Update Advisory Committee Meeting December 2, 2020 Page 4 of 7 Mr. Barquist indicated there will be a number of opportunities to comment on the draft documents as the process progresses. For the Community Profile, the Government Code requires an assessment of housing needs and an inventory of resources and constraints, specifically an analysis of the population, employment trends, and household characteristics. The analysis tells stories about the community and assists with the development of policies and programs that address needs. The Review of Past Performance document evaluates the 2014-2021 Housing Element goals, objectives, policies, and programs to determine whether they contributed to attaining the State's housing goals and were effective in attaining the community's goals and objectives, and to determine the progress of the City in implementing the Housing Element. Past performance is a good basis for including policies from the fifth cycle in the sixth cycle. Many policy changes will relate to new and emerging needs. In response to Committee Member Stevens' question, Mr. Barquist related that census data will not be available for this analysis. Much of the information is based on projections. In reply to Committee Member DeSantis' inquiries, Mr. Barquist stated the HEUAC can discuss specific policies and explore options at any time. The subcommittees and staff have already begun the discussions. Chair Tucker added that the HEUAC and the public need to understand affordable housing in order to stimulate ideas about meeting the RHNA allocation. The HEUAC may not need to meet with affordable housing developers because one is a committee member. Talking with a developer may not be appropriate as developers will compete for any sites the update process generates. Committee Member DeSantis anticipated the HEUAC needing to explore the parameters of an inclusionary zoning policy. Chair Tucker indicated committee members and the public can ask questions about inclusionary zoning when the affordable housing subcommittee presents its report. Adriana Fourcher noted the population growth forecast for the City of Newport Beach is 8.4 percent over the next 20 years. Meeting the RHNA numbers may result in more housing units than are actually needed. Building housing in the Airport Area may displace jobs. Chair Tucker noted the HEUAC is tasked with complying with the RHNA allocation. Jim Mosher commented that if the HEUAC oversees the writing of the Housing Element with public guidance, having an outline of the new Housing Element would be valuable. Misstatements of facts in the two documents detract from the credibility of the documents. Hoiyin Ip appreciated the interesting presentation. d. RHNA Sites Identification Strategy Recommended Action: Receive an overview of a strategy to comply with the RHNA allocation through the sites inventory and alternative housing opportunities. Mr. Barquist advised that Table B in the November 24, 2020 memo contains incorrect information. In the very low column, projects in the pipeline should be 135, the total should be 146, and the net remaining need should be 1,307. The text below the table will be revised accordingly. The City of Newport Beach has been allocated 4,834 housing units and has to identify sites that can accommodate that allocation through the planning period. After subtracting existing capacity, projects in the pipeline, and accessory dwelling units (ADU), the City's net remaining RHNA allocation is 1,307 very-low-income units, 831 low-income units, 1,022 moderate-income units, and Housing Element Update Advisory Committee Meeting December 2, 2020 Page 5 of 7 0 above-moderate-income units. The next step is to determine candidate sites that will subsequently undergo evaluation of their suitability for housing. The HEUAC has identified a number of candidate sites, and letters have been sent to the property owners to determine their interest in redeveloping their properties. A number of property owners have responded to the letters. Next, the net remaining need will be refined based on each property owner's interest in redevelopment, site conditions and constraints, statutory limitations and constraints, and prioritization of sites. Finally, the HEUAC, staff, and the community will begin to create policy and programmatic solutions to meet the unaccommodated need. In reply to Chair Tucker's questions, Mr. Barquist reported the number of housing units generated by projects in the pipeline is correct, but the numbers are fluid due to assumptions. The law states that cities must identify RHNA obligations by income category, but it does not require a developer to identify affordability categories when developing a project. The City is obligated to ensure there is no net loss when projects are developed. If there is a net loss, the City has 120 days to provide rezoning that accommodates the net loss. Essentially, the City needs to accommodate more units than its RHNA obligation to avoid the net loss scenario. The California Department of Housing and Community Development's (HCD) general recommendation is to plan for 10 to 30 percent more units than allocated. If the HEUAC determines sites will not accommodate the full amount of growth, the Housing Element may contain a program of actions to address the deficiency. At the time of adoption, the Housing Element may identify all sites to accommodate the RHNA allocation or include a policy mechanism to identify all sites within three years. Committee Member Stevens noted the City will need to create policies that encourage developers to include more units in the very-low and low-income categories in their projects. In answer to Committee Member Sandland's queries, Mr. Barquist related that sites will be divided into the four categories. The sites inventory will list the seven descriptors for each site, and the required HCD form will provide the information. Committee Member Sandland stated some sites will have to be identified for 100 percent affordable housing in order to meet the RHNA allocation. Committee Member Kiley understood the HEUAC would identify sites, and the Council would develop policies, including a policy to fund 100 percent affordable housing. The City previously had a program that required developers to pay a fee for luxury residential developments, and the City used the funds for affordable housing. The City of Irvine has a similar program. Chair Tucker noted affordable housing projects typically provide 50 or so units rather than 400 units. Financing for 100 percent affordable housing projects is more complicated than financing for any other type of affordable housing project. In-lieu fees are not sufficient to construct the number of affordable units for which the fees are paid. Committee Member Fruchbom advised that more than $0.5 billion would be needed to fund the required number of affordable housing units. The shortfall for each affordable housing unit is about $250,000. The problem is exacerbated by higher costs and rents in Newport Beach. Chair Tucker highlighted the difficulties of meeting the allocation for affordable units. Committee Member Selich viewed the excess number of above-moderate units as increasing the total number of units needed. As developers build mainly above-moderate units and few very low, Housing Element Update Advisory Committee Meeting December 2, 2020 Page 6 of 7 low and moderate units, the City will be in a never-ending cycle of zoning for the no net loss scenario. Committee Member Sandland remarked that the City will have to look to property owners with other economic interests. Perhaps employers and churches will be willing to give up a portion of their properties for housing in exchange for a concession. In response to Committee Member DeSantis' inquiry, Mr. Barquist reported the total number of ADUs was based on the number of ADUs constructed in the City. HCD provides criteria for affordability of ADUs located in the Southern California Association of Governments (SCAG) region. The intent is to expand the opportunities for construction of ADUs through policies and programmatic enhancements. Committee Member DeSantis noted Vancouver has imposed a tax on vacant units to fund affordable housing and has increased the tax three times in the past 12 months. In answer to Committee Member Bloom's query, Mr. Barquist advised that the sites inventory does not have to include the feasibility of developing a site. Whether or not a site is developed as planned comes into play with the no net loss scenario. Adriana Fourcher believed a tax or fee imposed to fund affordable housing would be passed to consumers. Imposing a tax on vacant homes conflicts with the City's concerns about VRBO and Airbnb. Property owners pay property taxes and should not have to pay a fee or rent their home if they choose to take an extended vacation. David Tanner suggested the HEUAC develop estimates of in-lieu fees for units in the different affordability levels. He inquired about the penalty for the Housing Element not attaining its goals. Chair Tucker indicated the answer to Mr. Tanner's question is probably unknown at this point. Nancy Scarbrough asked if Mayor O'Neill has contacted the City of Irvine about sharing information with the City. Chair Tucker indicated he has not received any information about it. Jim Mosher remarked that Table B seems to reinforce the historical anomaly that Newport Beach has great difficulty producing moderate housing units. He inquired whether the production of moderate-income housing in Newport Beach is a real problem, whether the barriers are known, and whether it can be corrected. Chair Tucker suggested increasing density to 50 to 60 units per acre may generate moderate housing. e. Formation of an Additional Sites Subcommittee Recommended Action: Form an additional sites subcommittee to review the potential for housing sites within the 65 dB CNEL contour in the Airport Area. Chair Tucker reported a property owner has expressed interest in developing housing on his property located within the 65 dB CNEL area. Building housing within the 65 dB CNEL is not unlawful, but the interior noise level must be mitigated to below the noise threshold. The Mayor has suggested a subcommittee explore the feasibility of developing properties within the 65 dB CNEL contour. Chair Tucker appointed Committee Members Sandland and DeSantis to the Additional Sites Subcommittee. Housing Element Update Advisory Committee Meeting December 2, 2020 Page 7 of 7 David Tanner advised that the noise standard for the exterior living environment is 65 dB and for the interior living environment is 45 dB. He suggested the Additional Sites Subcommittee consult with a noise consultant or the City's CEQA consultant to learn the law on this topic. This will result in nothing more than litigation for the City. Committee Member Sandland was aware of apartment buildings being constructed within the 65 dB CNEL and adjacent to freeways in other cities. Fred Fourcher indicated his office is located beneath the flight path of the left runway at John Wayne Airport and outside the 65 dB CNEL area. He cannot have his windows open and conduct phone calls because aircraft noise is too loud. The area is not hospitable for people attempting to enjoy the outdoors. VI. ADJOURNMENT – 8:25 p.m. Next Meeting: January 6, 2021, 6 p.m. in the City Council Chambers.